Is a wealth management group really necessary?

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XM16E1
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Joined: Tue Oct 22, 2019 9:34 pm

Is a wealth management group really necessary?

Post by XM16E1 » Tue Jan 14, 2020 2:58 am

I'm wondering if a wealth management group is really worth looking into or if I should just keep on doing what I'm doing...

Background:

Early 30s, self employed, net about 1M a year, current net worth is 3M (not valuing the business). Built business from nothing and for the first several years I put everything right back into it for growth. I want to retire in six years and live off income from my investments. Currently holding 550k in cash outside of business operating funds with another 310k in my fidelity investment account. Last year I mainly stacked cash (CD's @ 2.75) and grew my fidelity account from 30k to 300. I have plenty of cash savings but hesitant to put a large chunk of it in the market since it's my safety net.

For 2020 my plan was to invest $14,250 per week into the market. My largest holdings are FXAIX, FZROX, FSPTX, FSMEX, FFFGX, FCNTX plus a couple others with smaller amounts. But those are my main ones and have performed well.

With a retirement goal of six years, is there really anything else I should be doing? My "stop working" mark is 4.5M in cash/investments. I figure this will conservatively generate 150k annually. I will then sell or close the business and use those proceeds as a bonus slush fund. I'd retire tomorrow if I could find a buyer for the business but its a real niche market and I would not want to publicly advertise it. My retirement dream is to go back to work for my company as a part time employee. No stress or worries but still have all the fun.

My bank is always trying to set me up with their brokers and wealth management group. But I suppose my line of thought is why should I pay you X% of my portfolio to buy mutual funds when I can do the same for free?

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RickBoglehead
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Re: Is a wealth management group really necessary?

Post by RickBoglehead » Tue Jan 14, 2020 4:51 am

Have you read the Wiki? Or The Boglehead's Guide to the Three fund Portfolio?
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

Royal Blue
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Re: Is a wealth management group really necessary?

Post by Royal Blue » Tue Jan 14, 2020 5:12 am

I’d would spend time tax planning with my CPA more than hiring a wealth management group. If you’re uncertain about your asset allocation and strategy you can always hire a fee only planner by the hour to review. I wouldn’t hire a firm that charged an ongoing AUM fee.

Dottie57
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Re: Is a wealth management group really necessary?

Post by Dottie57 » Tue Jan 14, 2020 6:13 am

Wealth managers want your money to become theirs. Keep doing what you are doing. Buy index fund shares with low expenseratios. Keep your money for yourself.


Tell the bank to knock off the suggestions to meet with wealth mgrs. you a DIYer.

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happyisland
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Re: Is a wealth management group really necessary?

Post by happyisland » Tue Jan 14, 2020 6:38 am

RickBoglehead wrote:
Tue Jan 14, 2020 4:51 am
Have you read the Wiki? Or The Boglehead's Guide to the Three fund Portfolio?
Essential reading. OP, both will answer your questions, comprehensively.

Jack FFR1846
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Re: Is a wealth management group really necessary?

Post by Jack FFR1846 » Tue Jan 14, 2020 7:32 am

Wealth managers convert your wealth and their experience into their wealth and your experience.
Bogle: Smart Beta is stupid

financeperchance
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Re: Is a wealth management group really necessary?

Post by financeperchance » Tue Jan 14, 2020 7:46 am

Jack FFR1846 wrote:
Tue Jan 14, 2020 7:32 am
Wealth managers convert your wealth and their experience into their wealth and your experience.
lol well stated!

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Stinky
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Re: Is a wealth management group really necessary?

Post by Stinky » Tue Jan 14, 2020 10:53 am

XM16E1 wrote:
Tue Jan 14, 2020 2:58 am
My bank is always trying to set me up with their brokers and wealth management group. But I suppose my line of thought is why should I pay you X% of my portfolio to buy mutual funds when I can do the same for free?
Not only are you a good businessman, you're pretty smart about investing.

Banks and brokerage houses want to sell you their "expertise", and charge you 1%++ per year for their services. Why pay them when you are already doing it yourself.
It's a GREAT day to be alive - Travis Tritt

Jack FFR1846
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Re: Is a wealth management group really necessary?

Post by Jack FFR1846 » Tue Jan 14, 2020 10:57 am

financeperchance wrote:
Tue Jan 14, 2020 7:46 am
Jack FFR1846 wrote:
Tue Jan 14, 2020 7:32 am
Wealth managers convert your wealth and their experience into their wealth and your experience.
lol well stated!
I work in a 3 building complex. One building is full of Wealth Management companies. One particular employee drove in his Porsche 911 turbo yesterday. Why? Because it was raining and he didn't want to drive his McLaren 720. The lot is full of Maseratis, RS Audis, Teslas, BMWs. They don't buy these cars because they are making their clients money. They buy them because they're skimming as much of their clients' money in fees as they can.
Bogle: Smart Beta is stupid

retired@50
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Re: Is a wealth management group really necessary?

Post by retired@50 » Tue Jan 14, 2020 11:05 am

Jack FFR1846 wrote:
Tue Jan 14, 2020 10:57 am
financeperchance wrote:
Tue Jan 14, 2020 7:46 am
Jack FFR1846 wrote:
Tue Jan 14, 2020 7:32 am
Wealth managers convert your wealth and their experience into their wealth and your experience.
lol well stated!
I work in a 3 building complex. One building is full of Wealth Management companies. One particular employee drove in his Porsche 911 turbo yesterday. Why? Because it was raining and he didn't want to drive his McLaren 720. The lot is full of Maseratis, RS Audis, Teslas, BMWs. They don't buy these cars because they are making their clients money. They buy them because they're skimming as much of their clients' money in fees as they can.
OP,
If after reading the Boglehead's guide and the wiki and you need a laugh, read Fred Schwed's classic Wall Street book "Where Are the Customer's Yachts?" Find a copy at your local library or at the link below.

Regards,
https://www.amazon.com/Where-Are-Custom ... 0471770892
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

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