If you had 100K in savings what would you do with it

[Ms B]

Not to hijack, but do you (or anyone else) have tips on how to find this kind of adviser? I don't know anyone who knows anyone, and I desperately need to get this kind of coordinated financial advice...

American_mama's suggestion is a good one. We found our first broker (who really was more of a true broker) by making calls, asking friends, and then interviewing three or four to see who we felt we could work with. I am involved in the investment decisions in my house (I am a big Warren Buffet fan; my first stock purchase was a Berkshire Hathaway B share) and wanted someone who would listen to me and not be patronizing. We liked that broker and he had some good strategies (diversification, stock options, etc.), but after about ten years we found we needed someone who could deal with the investment, tax, and insurance issues at the same time.

At that point, we started asking the people we knew that we considered well off (family money, etc.) who they used. We found that a couple of them used the same company here in town and from there we started researching the different advisors that work there (the internet is a great thing). It turned out that a friend used a particular advisor there and he was willing to make an exception to his usual requirements (in terms of initial dollars to invest) to work with us because we are relatively young for his clientele and have future potential.

You might want someone that has certain credentials. Our guy is a certified financial planner (CFP - www.cfp.net), a certified healthcare planning professional (ChFC - www.hfma.org), and a chartered life underwriter (CLU), as well as a broker. It gives us everything we need in one place. The links should send you to home pages that you can click through for lists of professionals in your area.

[Ms B]

Yes, but it is complicated. You can call the mainstream providers (fidelity, vanguard) etc and they have people that can advise specifically on that though I am not sure of the quality of the advice. My accountant claims that he has a away of doing it that lessens the tax implications (you often end up paying taxes with this and may have to convert some/all of your existing rollover and sep and non-roth IRAs). I am still slogging though the beginning stages. If you have an accountant or financial planner I would talk to them. It doesn't make sense for everyone. While the big providers like fidelity will do this for you but my sense is they don't have a big motivation to figure out the best individual plan for each investor, they want to accomplish the conversion mechanics and get you invested in their funds.

This. We did not know it even was an option until we started working with our current guy (who is NOT with one of the big providers). It took a fair amount of time and coordination to set up, but our guys does them all the time and handled all of the paperwork (and it was easier for DH and I than for some because we both had existing Roths that we opened when we were young). Now that it is set up, we do it annually.

Our guy did tell us that it did not make sense to do it if you have not maxed out your 401K contributions (including any catchup) and any conventional Roth eligibility that you have, so YMMV.

[Giantbear]

I can't even begin to answer this without a lot more information. I would recommend seeking professional advise which will take into account risk tolerance, life choices, personal preference, life goals as well as present and future income prospects, tax situation, your age, children's age, liquidity needs and so forth. If you have a trusted cpa, i would start there, then move on to finding a good financial adviser who will sit with you to tailor a personalized investment plan for you. I would not simply go to a broker who may give you good stock tips, but not a plan.

[AnnieW625]

Honestly jump for joy and be very happy with myself! I would probably start ear marking more money for college tuition.

[sdoyle]

I think as we have "extra" money, we are going to look into a plan like this one:

http://jlcollinsnh.com/2011/06/14/wh...why-we-own-it/

I've started to read some investing blogs and find them really interesting.

It's funny that sste mentions government I-bonds for emergency fund. We have been thinking about doing the same thing with ours a little bit at a time. It just seems so crazy to have a big hunk of money in a savings account. I haven't figured out how you buy them though. Any insight? Do you have to go through a broker?

[sste]

sdoyle, you set up an online account with treasury direct to buy the ibonds -- can be done very easily, all on-line.

For funds, I love vanguard and own vanguard, including total stock market, but I think (?) that standing alone the total stock market can leave you under-represented in international relative to alot of planner's recommendations and also of course in bonds. I have been shifting some but not all of my assets to the age-adjusted vanguard and tiaa funds that automatically shift your asset allocation in terms of stocks/bonds based on your projected retirement. And I have been adding international funds after I realized I was underweighted there. The expense ratio is a little higher for age-adjusting funds but the shifting is an advantage. Also my work subsidizes this one so the expense ratio is lower than normal when I use it for my 401k, pretty close to the straight index fund. You may want to check with your employer.

[sdoyle]

Thanks! I'm going to set it up today. It's been on my to-do list for a while.

You are right- international funds are not represented well in the funds in that blog and should really be included. A lot happening there as well

[KrisM]

Thanks! I'm going to set it up today. It's been on my to-do list for a while.

You are right- international funds are not represented well in the funds in that blog and should really be included. A lot happening there as well

The part of the interest on I Bonds that is tied to the inflation rate is most likely going to go up on May 1. They change the rate on May 1 and Nov. 1. No idea what the fixed part will do though. It's at a whopping .2% right now . But, I've read you'll get .5% more due to the inflation part starting on May 1. Not sure I'd wait or buy now.

[sste]

Yes, I think Kris is right about that! We are new to the ibond world but we are going to make our second investment this summer.

Here is an explanation page, my understanding is that even buying now your total rate is around 1.4 which was higher than anything else I found out there except the pennfed cds (but those are less liquid). But I am waiting too.

http://www.treasurydirect.gov/indiv/...esandterms.htm

[KrisM]

Yes, I think Kris is right about that! We are new to the ibond world but we are going to make our second investment this summer.

Here is an explanation page, my understanding is that even buying now your total rate is around 1.4 which was higher than anything else I found out there except the pennfed cds (but those are less liquid). But I am waiting too.

http://www.treasurydirect.gov/indiv/...esandterms.htm

I've read a couple places that the inflation part will be 1.82% on May 1. So, even if you lose the .2% you're ahead. But, you've forever lost the .2%, so if the inflation then goes to 2.5% in November and you buy today, you'd be at 2.7% and if you bought in May, you'd only be at 2.5% (assuming it goes back to 0% fixed).. Not sure how to decide!

We have a bunch of EE bonds that were inherited, so are making decent interest now. Good enough to call it part of our emergency fund.