Who is great at investing money?

[Eastern]

Our advisor takes 1% of our account each year. The more money he makes us, the bigger his commission is. If too many clients lose money, he looses money. Good incentive for him to perform.

ouch. And he's still taking 1% if you're losing money.

 

[_19disnA]

I would talk to a financial advisor from Fidelity, Vangard, etc. before seeking advice from someone who works at Chase, Citibank, Wells-Fargo, etc.

Actually, I would suggest the opposite. Company where I worked used Fidelity to manage our 401k and each time you called, you got a different person who gave me a completely different impression on how to manage the funds. Got the idea they are staffed by people who know virtually NOTHING about investing, basically like calling a help desk and whoever answered the phone was now your 'advisor'. Large/established banks have real financial advisors who can meet with you in person and you get a far better sense of what they recommend.

Also avoid a 'friend' from church or a neighbor who knows someone.

 

[MillauFr]

ouch. And he's still taking 1% if you're losing money.

Agreed. 1% is outrageous but I think that is typical fee than many planners charge. So instead of getting 6 - 7% returns you are only getting 5 - 6%. Let that sink in. They are getting a huge portion of your profits.

 

[MillauFr]

Large/established banks have real financial advisors who can meet with you in person and you get a far better sense of what they recommend.

A good financial advisor can increase your returns but the problem is most of them charge far more than their value justifies.

 

[_19disnA]

You can certainly discuss fees as part of deciding which financial advisor to choose.

 

[MKCP5]

You mentioned a pension for your Husband.....how safe is this pension throughout your entire retirement period? There are many pensions, even good ones, that will be in poor shape down the road due to over promising benefits and under estimating contributions. Even those not in the private sector are not immune just looking at places like IL and CA. IMO, I would not feel 100% confident in any pension promises and there are many good stories documenting this.

For your situation, the Vanguard Star fund is an easy, one stop fund. I have a 16 year old son who is contributing to this fund. Vanguard in general is going to be a good place to go. It is easy to do and they have good help available. If you are going to hire someone, make sure they are a fiduciary on your behalf all the time and are a registered investment advisor (RIA). As others have said, max out a ROTH IRA with this money each year.

Good luck

I feel pretty confident about his pension, although as you said, sometimes things happen and we have all witnessed that in the news. It is a teachers pension. I'll look at Vanguard. Thank you.

 

[MKCP5]

You should always know what you are investing in! Nobody takes care of your money like you do!

I'm not looking to hand it all over to someone, rather to explore options of how I can invest it wisely.

 

[MKCP5]

Pay off the house and car.

Then invest your house and car payment monthly amounts in an index fund at Vanguard.

How would you feel if you put the inheritance into an index fund and the value dropped 30% in 2019? My guess is you’d panic and not want to lose more and pull it all out.

Take the guaranteed return by paying off all your debt. Then invest your house payment. If that investment drops you’ll feel much better because you’ll be debt-free with no money worries.

I can't pay off my house. Operative word *small inheritance. We live in Boston. Homes are verrrrrrrrrrrry expensive here. lol

 

[kandb]

Be careful, I put $150K into an annuity Jan, 2018 for 3 years at 2.5% and now the interest rate is going up so I am sorry I have my money tied up for 3 years. I can take out 10% every year (will take out $15K and invest it somewhere else this January). I am sorry I didn't invest it in something for a 12-18 months instead. It is with Fidelity

 

[BridgetBordeaux]

Be careful, I put $150K into an annuity Jan, 2018 for 3 years at 2.5% and now the interest rate is going up so I am sorry I have my money tied up for 3 years. I can take out 10% every year (will take out $15K and invest it somewhere else this January). I am sorry I didn't invest it in something for a 12-18 months instead. It is with Fidelity

You are not the first person that is less than thrilled about their annuity. I am sorry so much cash was involved, but at least you are only tied up for only 3 years.

 

[MKCP5]

Be careful, I put $150K into an annuity Jan, 2018 for 3 years at 2.5% and now the interest rate is going up so I am sorry I have my money tied up for 3 years. I can take out 10% every year (will take out $15K and invest it somewhere else this January). I am sorry I didn't invest it in something for a 12-18 months instead. It is with Fidelity

Sorry that isn't working out for you. Thank you for the heads up

 

[_19disnA]

Anything offering a guaranteed return (such as an annuity) will obviously provide lower returns, since the company investing your money plans to make a profit and will invest those funds into things with higher returns so they can pay the guaranteed amount. You can now buy CD's paying around 3% (depending on the length) and since interest rates have been at historic lows, it isn't surprising they will start to rise back to a more normal level. I think annuities work out best for those who sell them, but not a particularly good investment option.