If you also have a curiosity about investing consider these three suggestions before making a move.
1. Index your way to retirement.
If you have less than 100K to invest most financial advisers generally won't take you on as a client. Why? To be blunt, they're not getting paid enough off your 50k to care. As fee margins come down every year due to advancement in financial management technology, advisers are being forced to go two routes with keeping their revenues up.
1. Take on higher minimum clients and fire the clients with the lowest account balances
2. Charge more to smaller accounts where on 50K you're looking at a minimum paying 1.75% annually in fees.
So, if you have 50K or less to invest I strongly suggest you index your way into retirement. Vanguard and low-cost ETF's which can range from 0.15% to say 0.75% annually in fees have always been a strong go to for those looking to manage their own retirement and pay the least amount possible in fees.
But say you like this option but you know very little about investing, how to allocate between different sectors and industries...yada...yada..yada. There is an answer to that
2. Harness AI
Since 2009 there has been a movement in the financial advisory world where "robot advisors" have been growing exponentially. And they offer the best of both worlds when it comes to having a low-cost alternative to a traditional advisor, and allocating your money for you based on your thoughts about life and risk.
The process is pretty straightforward.
1. You're asked several life questions regarding when you want to retire, how you feel about risk where they feed you several examples, do you expect to make a large purchase in several years and other financial questions tied to your emotional state.
2. After a dozen or so questions the robot will come back and say these are the ETFs that make the most sense, this is the allocation that fits your tolerance, and this is how often we will automatically rebalance the portfolio for you to ensure you're in line with your retirement goals.
3. And they do tax loss harvesting also which is pretty sweet!
The major players in this space are Betterment and Wealthfront. I would check them out if you want to index the market, pay low fees, and have a low-cost alternative for someone else managing your investments for you automatically.
But what if you want to beat the market or earn income from them?
3. The DIY method
This is where individuals will match their 401K, maybe max out their retirement plan contributions but then wants to trade part of their nest egg through a brokerage account or IRA. This can be done but of course, most traders lose money due to lack of education. I would suggest if you go this route to do the following
1. Match your company 401K first because some will match whatever you contribute up to 5% or more. So that is free money basically that you're getting without having to place one trade or buy one mutual fund.
2. Educate yourself on trading and if its something you really have the capacity to do. We wrote a series on trading for a living that helps answer these questions on what it takes SEE HERE.
3. Stay away from most YT videos promising quick riches as most of those "traders" never worked in a control function in their life at a hedge fund or investment firm. They're professional dream sellers, not traders that can educate.
4. Read great content from traders you see online that actually seem legitimate and know what they're doing.
5. Attend educational webinars on how to get started in DIY trading as well. For example, we're hosting a webinar this Friday where one of our students who has a professional career trades options on a part-time basis and does really well at it.
See the Webinar Link Here: How I made 20K in February trading part-time
6. Paper trade first with fake money until you get a feel for basics such as putting orders in, how to read charts, and a host of other intro things you need to know about investing.
Even though I trade and we teach others to trade I would never encourage anyone to trade their retirement nest egg if they have impulsive disorders or gambling habits. So before you consider hiring a financial advisor or DIY investing read the above once more and check out the resources I provided to get started with investing.
Feel free to ask me anything in the comments. Even though I don't have my financial advisory hat on anymore, (and cant recommend specific things for you to do) I am always happy to share the ins and outs of that industry and provide basic 101 information.