There's not one clear answer here, but I'm curious of this sub's perspective - are there net worth points at which one should transition between different investment styles?
I'm thinking of this as having 5 "levels" (even though realistically at any one point you could probably use a blend, especially of the first 4 options):
(1) Ultra-Low Risk Accounts: Self-directed, investing pretty much solely in ultra-low/zero risk accounts such as FDIC-insured high-yield savings accounts, CDs, I/Muni Bonds, etc.
(2) Self-Directed/Index-Fund Based: Generally focused around investing in the S&P, ETFs and/or mutual funds to diversify and access higher returns that are not necessarily risk free, but are still lower-risk
(3) Robo-Advisor: Putting money into Wealthfront, Betterment, etc. and paying an initial management fee - usually around 0.25%
(4) Financial Advisor: Still going self-directed and using a combination of strategies, but checking in with a financial advisor for some sort of flat fee to receive professional guidance - this would usually be focused on retirement planning, but not necessarily managing your investments for you.
(5) Wealth Management: Full-service professional management with fees ranging from 0.30%-1.00%; generally hands-off by the individual investor. Usually includes some sort of tax-planning service and various specialty services such as executive/equity compensation planning.
For example,
<$10,000 investable assets - just do #1
$10,000-50,000 - do #1 and #2
$50,001-250,000 - do #1, #2, and #3
$250,001-750,000 - do #1, #2, #3, and #4
$750,001+ - do #5
I know there's no hard and fast rule here, it depends on individual capabilities and desires, but any thoughts on some general thresholds (especially as it pertains to the switch to #5)?
Submitted December 21, 2023 at 11:42PM by user1846728 https://ift.tt/nvoJ0T3
