Scrambling to find solid ground

[CoastalStorm]

53yo widowed this summer. Grief is tough to think thru... Not sure of next steps but want to be smart. Not yet set up but I think I can ‘retire’ in ‘19 if I get my savings into the stock market/learn of other options? I started learning about the stock market but it’s a bit of an overwhelm. Opened a TD Amertrade acct w just 500$ to learn but it’s feeling way above my head.Read 15 books on finance and investing, getting my head around some ideas.but very slowly and I’m cautious.
I have 650 to invest, no debt, no expensive hobbies, own home. Decided by what I spend I’ll do fine w 24k/yr. My children are grown,it’s just me, my dog and 3 cats.
I lost my work when my husband died.We were business partners. I’m not ready to not work. I’m productive and want to contribute. I will probably only work for myself tho. After being self employed so long I relish the freedom so dearly. It’s a good time to change gears, guess truly change is the only thing that’s for sure.
I’ve always wanted to write my thesis into a book...so it feels time to devote to this dream has come. If I can live on interest, dividends and preserve my principle, if! Then I can devote my energy/time to write.
I’m considering this site a great find...
First biggest question I’d like to ask is,
Do I hire a financial professional?.Or can a reasonably smart gal do this herself?

 

[davebarnes]

Don’t trade. Buy and hold.
Index funds are your friends.
Decide on an asset mix strategy and stick with it.

Do not hire anyone.
Never give trading authority to anyone.

Watch this

 

[target2019]

53yo widowed this summer. Grief is tough to think thru... Not sure of next steps but want to be smart. Not yet set up but I think I can ‘retire’ in ‘19 if I get my savings into the stock market/learn of other options? I started learning about the stock market but it’s a bit of an overwhelm. Opened a TD Amertrade acct w just 500$ to learn but it’s feeling way above my head.Read 15 books on finance and investing, getting my head around some ideas.but very slowly and I’m cautious.
I have 650 to invest, no debt, no expensive hobbies, own home. Decided by what I spend I’ll do fine w 24k/yr. My children are grown,it’s just me, my dog and 3 cats.
I lost my work when my husband died.We were business partners. I’m not ready to not work. I’m productive and want to contribute. I will probably only work for myself tho. After being self employed so long I relish the freedom so dearly. It’s a good time to change gears, guess truly change is the only thing that’s for sure.
I’ve always wanted to write my thesis into a book...so it feels time to devote to this dream has come. If I can live on interest, dividends and preserve my principle, if! Then I can devote my energy/time to write.
I’m considering this site a great find...
First biggest question I’d like to ask is,
Do I hire a financial professional?.Or can a reasonably smart gal do this herself?

Sorry for your loss. No one can say enough about that.

1) Which of the 15 books covered investing and finance in a way that was easily understood?
2) Can you access all current investments and list the mutual fund, etf or company symbols? Whether you hire a planner, or do it yourself, this is basic information needed to understand the entire portfolio.
3) From recent statements, can you find month end totals and enter them for all in step 2? You can use this to calculate the percentage of each holding in your portfolio. Do not share any information that makes you uncomfortable.
4) Do you have a good idea of what you spend, and the categories? That also helps someone comment on your portfolio, and whether the 650K by itself can generate 24K (plus taxes, if any).
5) Are you still working in the business? Not entirely clear on that.

There is another recent thread about hiring a financial planner. However, I believe you can do this yourself, and understand that you just may need a gentle prod to get better understanding. You've done a lot of reading, and may be almost there.

 

[joeea]

53yo widowed this summer.

Sorry for your loss.

Do I hire a financial professional?.Or can a reasonably smart gal do this herself?

Some can do it themselves. Others can't. Still others decide that they have better things to do with their time.

You might consider hiring a financial adviser for now, to help you sort things through. Then once you have educated yourself sufficiently, if you choose, you can drop the adviser and go it on your own.

If you choose to retire next year, you have a very long retirement ahead of you. If you were my relative, I'd want you to get some professional help coming up with a plan to tackle all those years.

 

[Choices]

I think what I read is you have $500 in the stock market and $650k in cash. Is that right? Any other source of income?

 

[Jerry1]

You might consider hiring a financial adviser for now, to help you sort things through. Then once you have educated yourself sufficiently, if you choose, you can drop the adviser and go it on your own.

I would get a meeting with a professional and then consider my options. Try to find a recommendation from someone you trust. There are certified financial planners (CFP’s), lawyers (estate planning) and CPA’s. My main advice is not to do anything until you’re comfortable. Have some meetings with professionals, think this through and then decide. Come back with questions. This is a good group and a pretty diverse group in financial terms. It took me two years to get comfortable with where I was financially with respect to retiring.

Two main things you need to understand are healthcare and social security. At 53, you need health insurance for 12 years. You’re also 9 or more years from collecting SS.

Just don’t ever feel like you need to make a quick decision with your finances.

 

[Maenad]

First, I too sympathize for your loss. Please consider us as some of the people you can turn to for comfort - we are real people behind the pixels!

I recommend waiting while you learn. The old adage that you shouldn't do anything for a year after a huge change (and widowhood definitely qualifies) is there for a reason. Your money can sit in cash for 6 months or a year while you regroup.

If you've read 15 books, I would imagine there's a lot of conflicting info in your brain. If you let us know which ones they were, we may be able to give you some perspective on how the authors are viewed, what their biases are, that may help you sort them into buckets - "this author made a lot of money on rental real estate, so they think that's the best way", "this author works for a hedge fund that invests in a particular way, so they're going to tell you to do the same", etc. Of course, we all have our own biases, so that can get pretty meta.

 

[pb4uski]

I'm sorry for your loss. Does your $24k/yr include health insurance? deductibles and copays? income taxes? periodic car replacements or major repairs if you own a home?

How much will your SS benefit be?... both survivor and retirement... those are an important source of income. With $650k to invest, whether you can spend $24k/yr and avoid using principal will depend on your income from working. In fact, you would be best off to dissuade yourself of the notion that principal can't be used... in the bad years (such as 2018 is looking to be) you may need to dip into principal, but in good years you will build principal. Read about total return investing.

As far as investing, keep it simple. Forget individual stocks and invest in index stock and bond mutual funds or exchange traded funds (similar to a mutual fund)... or even easier.... a balanced fund. Vanguard's Life-Strategy Moderate Growth fund is a good all-weather 60/40 balanced fund... or Vanguard Wellington would be another good choice.

A reasonably smart gal can do this herself and I believe that you will be better off. There are some good financial professionals out there, but the bad ones far exceed the good ones and it is more difficult to find a good one than to just learn to do it yourself. We are here to help.

Vanguard is a good firm with low costs and reasonable service.

 

[UnrealizedPotential]

Sorry for your loss. My feeling is to not feel you have to make any big decisions right now. You will certainly have to make some decisions, but not right away. I have no experience working with a FA {financial advisor}. Some are good, some are not. Choosing a bad FA is worse than doing nothing right now. Making decisions on your own if you don't know what you are doing could be devastating to your financial health as well as your physical well being.



Since you still want to work, I would use that time to think about how much your tolerance for risk is. It's probably small, and that's okay. How long do you want to work? Try to come up with a timeline for making a decision on what to do. To be honest, I would try to find a good financial advisor who will sit down with you and listen to your goals and needs.


It sounds easy to find a good FA, but it's not. I would take my sweet time in finding a good one. Your life depends on finding a good one. I would look online for FA's in your area where you live. How long have they been in business? Do they have previous clients that recommend them? Are they legit? Research this FA big time. Take your time. Do not rush it.


Then when you feel comfortable with this FA, arrange a meeting one on one. I do not recommend you investing this money by yourself. You need expert help, and there is absolutely nothing wrong with that. There are some things I am not good at in life. If I need help with it, I get it. It's no different for you. Get the help you need. You can do it, but take your time.

 

[Which Roger]

You might consider hiring a financial adviser for now, to help you sort things through. Then once you have educated yourself sufficiently, if you choose, you can drop the adviser and go it on your own.

I would suggest educating yourself a bit before turning to an advisor. Start by reading the Bogleheads Guide to Investing or a similar book. Then you will go into the first meeting with the advisor well-informed enough to distinguish good advice from a bad sales pitch.

 

[VanWinkle]

Sorry for your loss, and you are brave to be taking these first steps to secure your future.

Wait for 6 more months, contact Vanguard Personal Adviser Services(PAS)
and let them get you set up with an index portfolio of stocks and bonds. After a year or two of you watching how this works, you may well drop PAS and do it yourself. The good new is PAS only charges .30% of assets while Edward Jones/Merrill Lynch charges 1.2 to 1.8% of assets. Vanguard will not try to up sell you into expensive funds that you don't need.

We can help with any questions in the future- but learn to rely on yourself as much as possible. You care more about your finances than any adviser.

Best to you,

VW

 

[CoastalStorm]

Don’t trade. Buy and hold.
Index funds are your friends.
Decide on an asset mix strategy and stick with it.

Do not hire anyone.
Never give trading authority to anyone.

YouTube,LOL. I was inclined to do this myself...now certain I will.

 

[flintnational]

CoastalStorm, I am so sorry for your loss. Posts #8 and #11 by pb4uski and VanWinkle capture my thoughts and advice. Either of the strategies they outline will serve you well.

 

[ERD50]

My condolences as well.

... If you've read 15 books, I would imagine there's a lot of conflicting info in your brain. ... - "this author made a lot of money on rental real estate, so they think that's the best way", "this author works for a hedge fund that invests in a particular way, so they're going to tell you to do the same", etc. ...

I agree with this - 15 books might be providing a lot of conflicting advice and sensory overload.

.... As far as investing, keep it simple. Forget individual stocks and invest in index stock and bond mutual funds or exchange traded funds (similar to a mutual fund)... or even easier.... a balanced fund. ...
Vanguard is a good firm with low costs and reasonable service.

+1 Here's the paradox of personal investing - simple is better, and simple is easy. It's easy to find proof of this w/o reading any books. Just google "passive versus active investing" and you will soon learn that over a 5 year term, about 85% of the 'experts' cannot beat the simple investor who just buys and holds a simple broad-based index fund or two. And few of the 15% succeed in the next 5 year time period.

You can achieve whatever Asset Allocation (balance of equities and fixed income) you decide on with one total stock fund, and one total bond fund (VTI and BND are examples). That's it. You really don't need any thing more than that (you could add some International and REIT, but I doubt it makes much difference in the long run).

As we often say - the hardest thing about personal finance is getting to the point where you understand how easy it is.

Vanguard is good, many also use Fidelity and/or Schwab.

I would get a meeting with a professional and then consider my options. Try to find a recommendation from someone you trust. ...

As I said in that other thread, I just cannot agree with this.

First, it is unlikely that a 'professional' will provide any value over a simple 2 fund portfolio that you can easily set up yourself. And after the fees the pro needs to collect, you will very likely be under-performing. How does that help you?

Second, recommendations from friends are unlikely to be helpful to you. Does your friend have any objective way to measure what the FA is doing for them? Like I've said, the studies say there is no magic sauce to be had. Mostly, an FA recommendation will be based on your friend saying they "like" the FA. But why, and what specifically are they doing that you can't do for yourself with a very, very simple portfolio?

Another thing we often say - by the time you've learned enough to evaluate an FA, you know enough to DIY.

You've gotten some good questions from others. Please follow up on expense and clarification of those investments and your business plan.

-ERD50

 

[DatumPoint5]

Sorry for your loss, and you are brave to be taking these first steps to secure your future.



Wait for 6 more months, contact Vanguard Personal Adviser Services(PAS)

and let them get you set up with an index portfolio of stocks and bonds. After a year or two of you watching how this works, you may well drop PAS and do it yourself. The good new is PAS only charges .30% of assets while Edward Jones/Merrill Lynch charges 1.2 to 1.8% of assets. Vanguard will not try to up sell you into expensive funds that you don't need.



We can help with any questions in the future- but learn to rely on yourself as much as possible. You care more about your finances than any adviser.



Best to you,



VW

This +100!!!!

 

[CoastalStorm]

Thank you all so much! I already feel more confidence I can figure this out with adequate time and study.
Not sure how to do individual reply yet and so I'll try this...
I want to step slowly so the reading quotient is helpful, yes Bogle heads guide, yes I will read that today! did find whomever the author they all have their slant, some were a waste but made me see the sharks are many so be cautious. I read Suze Orman,lol, she would grindstone off my face, dislikes the fire mvmnt! Unshakable, I like Tony Robbins, helped me learn I want to minimize fees, definitely get into indexed finds, vanguard seems excellent. I read some garbage some not. I do know-
My risk tolerance is low. I want to keep pace with inflation and maybe see some growth.
I have a good additional repair/emergency fund for house/car/ unknown.
I have good individual health insurance and an HSA to cover deductible.
My SS benefit alone will hopefully be enough to live on, but I'm considering it bonus at 67. I'm not touching principal.
I was working in medicine, as a psychologist but to be honest I feel burnt out and am happy to retire to being a full time writer. I was also a teacher for years but not wanting to go back to full time work there. I've written a good portion of my book on developing resilience in children, a parent handbook of sorts. I'm really attached to the idea. In 10yrs of addiction medicine I learned the problem will only be cured by the creation of no new addicts, thus, stronger children are the answer . So not yet comfortable saying it but now I'm working on being a writer.
I can access and know all my totals. Have lived in a tight savings budget for decades so I know my real expenses.
Ever been in a plane that can't land yet circling, how I feel! I'll continue to read here and then talk to a Vanguard PAS. Thank you so much, ya know condolences really do help the grieving. Tell the ones you love everyday of your love...life is brutally short.
My motto now,
Self-care is healthcare and health is our greatest wealth.

 

[Chuckanut]

I am sorry for your loss. I have also lost close loved ones and feel it most sharply at this time of year. Yet, life goes on and time heals us in ways we can't imagine.

May I suggest Humbledollar.com as a site for a short weekly boost of financial smarts.

It is written by Johnathan Clements who, IMHO, is one of the best personal finance reporters of our time. Unlike the 'scare the Heck out of em' folks on the business sites, and the click-bait articles, he really has a grip on the realities of investing. You can do it yourself. It's not that hard.

https://humbledollar.com/

 

[TwoByFour]

First biggest question I’d like to ask is,
Do I hire a financial professional?.Or can a reasonably smart gal do this herself?

You absolutely can do it yourself.

Not sure on the 15 books you read, but I highly recommend The Boglehead Guide to Investing. Bogleheads follow the ideas of Jack Bogle, who founded Vanguard. They advocate a very simple, passive way of investing. It is truly that - simple. But very effective. The book can be read in one day and costs about $15. It is well worth it.

Just one more comment - the longer you work, the better off you will be in retiring. For one thing, you will be closer to Medicare; healthcare is one of the biggest expenses you will have. You will also be closer to SS. And you will have a bigger nest egg.

Good luck!

 

[Texas Proud]

I'm sorry for your loss. Does your $24k/yr include health insurance? deductibles and copays? income taxes? periodic car replacements or major repairs if you own a home?

How much will your SS benefit be?... both survivor and retirement... those are an important source of income. With $650k to invest, whether you can spend $24k/yr and avoid using principal will depend on your income from working. In fact, you would be best off to dissuade yourself of the notion that principal can't be used... in the bad years (such as 2018 is looking to be) you may need to dip into principal, but in good years you will build principal. Read about total return investing.

As far as investing, keep it simple. Forget individual stocks and invest in index stock and bond mutual funds or exchange traded funds (similar to a mutual fund)... or even easier.... a balanced fund. Vanguard's Life-Strategy Moderate Growth fund is a good all-weather 60/40 balanced fund... or Vanguard Wellington would be another good choice.

A reasonably smart gal can do this herself and I believe that you will be better off. There are some good financial professionals out there, but the bad ones far exceed the good ones and it is more difficult to find a good one than to just learn to do it yourself. We are here to help.

Vanguard is a good firm with low costs and reasonable service.

I almost always like PB4s answers for investing... I was going to say something similar... invest all in a target dated fund or balanced fund (since you plan to retire now) and let it ride until you get over your grief... from the little info I know that can be 2 or more years...


Then, when you are more stable and able to think more clearly you can adjust your AA if you want... however, a 60/40 is a pretty good allocation...

 

[VanWinkle]

Try this link for a short 16 page read on how to invest for your future.

https://www.etf.com/docs/IfYouCan.pdf

VW

 

[deserat]

First - condolences on the death of your husband. I was just listening to a podcast with Kris Carlson who lost her husband at age 43 - she has two books that may be of help regarding processing the grief - one is her personal journey -https://www.amazon.com/Kristine-Carlson/).

I echo the DIY advocates here, but also the "wait a bit". If the $650K is cash, put it in VG MM for now while you decide what you will do allocation-wise. A *really* simple approach is 70% VTWSX and 30% VBMFX (I think that is Clements advice for simplicity) if you wish to go that route.

Get a handle on your lifestyle expenses (track your spending) and then figure out how much of that can be managed by income from your portfolio and then personal work earnings. Since you say you wish to keep working, then the pressure on the portfolio to provide all of your income is lowered and allows it to keep appreciating while in the market. I am doing something similar. Although I could quit, I still work part-time because I find it interesting and it takes the burden off my portfolio for now.

In any case, give yourself time to process your grief, educate yourself and then to make decisions. This can't be hurried - and that is OK.

 

[lhamo]

So sorry for your loss. My mom was widowed at 55 -- she did fine with the investment advice she got, but had she been more diversified she probably would have done better.



I highly recommend JL Collins' Stock Series, available for free on his blog here:

https://jlcollinsnh.com/stock-series/

The content is available in book form in his book The Simple Path to Wealth.

 

[broadway]

53yo widowed this summer. Grief is tough to think thru... Not sure of next steps but want to be smart. Not yet set up but I think I can ‘retire’ in ‘19 if I get my savings into the stock market/learn of other options? I started learning about the stock market but it’s a bit of an overwhelm. Opened a TD Amertrade acct w just 500$ to learn but it’s feeling way above my head.Read 15 books on finance and investing, getting my head around some ideas.but very slowly and I’m cautious.
I have 650 to invest, no debt, no expensive hobbies, own home. Decided by what I spend I’ll do fine w 24k/yr. My children are grown,it’s just me, my dog and 3 cats.
I lost my work when my husband died.We were business partners. I’m not ready to not work. I’m productive and want to contribute. I will probably only work for myself tho. After being self employed so long I relish the freedom so dearly. It’s a good time to change gears, guess truly change is the only thing that’s for sure.
I’ve always wanted to write my thesis into a book...so it feels time to devote to this dream has come. If I can live on interest, dividends and preserve my principle, if! Then I can devote my energy/time to write.
I’m considering this site a great find...
First biggest question I’d like to ask is,
Do I hire a financial professional?.Or can a reasonably smart gal do this herself?

Condolences on your loss.

I helped my mother when father died in 2009.

I think it may be helpful to use a simple spreadsheet to inventory what your assets are to get a big picture.
You don't have to do anything now except to possibly change the name on some accounts to your name, but you may have done that already.

I am a big believer in the simple buy-and-hold index funds method.
I would suggest that for the future.

I absolutely would avoid financial advisors of any sort.

.

 

[brucethebroker]

Sorry for your loss, and you are brave to be taking these first steps to secure your future.

Wait for 6 more months, contact Vanguard Personal Adviser Services(PAS)
and let them get you set up with an index portfolio of stocks and bonds. After a year or two of you watching how this works, you may well drop PAS and do it yourself. The good new is PAS only charges .30% of assets while Edward Jones/Merrill Lynch charges 1.2 to 1.8% of assets. Vanguard will not try to up sell you into expensive funds that you don't need.
/QUOTE]
Solid advice.
I will add to consider splitting your investment $$ into two groups: stock market and CD's-maybe 50/50. Today's CD's are hitting the low 3% range and FDIC insured. No risk (yeah, inflation risk, I know....). They may be near 4% in the next 6-9 months.

$300k at 3.something% will bring in $10k a year in interest. Not too shabby. And the CD's will help you sleep while planning another move.

 

[Jerry1]

Regarding the use of a professional:

As I said in that other thread, I just cannot agree with this.

First, it is unlikely that a 'professional' will provide any value over a simple 2 fund portfolio that you can easily set up yourself. And after the fees the pro needs to collect, you will very likely be under-performing. How does that help you?

Second, recommendations from friends are unlikely to be helpful to you. Does your friend have any objective way to measure what the FA is doing for them? Like I've said, the studies say there is no magic sauce to be had. Mostly, an FA recommendation will be based on your friend saying they "like" the FA. But why, and what specifically are they doing that you can't do for yourself with a very, very simple portfolio?

-ERD50

To be clear, I was not advocating for hiring a financial advisor to do the investigating. My concern with regards to the OP is that she may not have a handle on everything she has or needs to deal with. A couple hours with a trusted professional, IMO, would be money and time well spent. Whether or not a financial advisor is worth it for the investing is a question for a much later date as I feel strongly (for what that’s worth ) that no major financial decisions should be made at this time. The thing to do now is gather information and make sure she has a good understanding of all the facets of her finances as she sits today. Then, tomorrow can be planned.