question: I live in northern Minnesota and will soon have nearly $1 million in cash. I’m not 100% sure of the best way to invest in this. I’ve talked to some financial advisors in the area and they’re worried this is a headache. I need help finding my way to my future.
answer: It’s right to continue your search because it’s important to feel comfortable with someone who can help you grow and achieve your financial goals in the long term. (Are you also looking for a financial advisor? This free tool allows us to match you with fiduciary advisors who may meet your needs.)
The good news is that you don’t need a local advisor these days, says Bruce Primeau, a certified financial planner with Summit Wealth Advocates. Instead, they can meet virtually, he added. You will want to find a trusted and competent advisor who has experience with situations similar to yours. “My recommendation is to work with an advisor who is your fiduciary and can put together a comprehensive financial plan before you invest your money,” Primeau says.
Having a problem with your financial advisor or looking for a new one? Email picks@marketwatch.com.
“My first thought is to be careful,” says financial therapist Nate Astle of Relational Money. “Unfortunately, many people will turn on you once they hear that amount.”
That’s why experts recommend finding a fee-only financial planner. This is because they receive compensation directly from their customers and do not receive commissions for recommending financial products. Additionally, we recommend looking for a certified financial planner who charges a fee. They are highly experienced, have thousands of hours of work experience, and act as fiduciaries. That is, they will put your best interests ahead of their own. .
Meet with at least three advisors before making your selection. In most cases, a free session and some advice will be provided for free. MarketWatch Picks has compiled a list of questions you can ask your advisor during the interview process. Also note that you may need “someone with tax knowledge, because taxes seem to be involved in everything,” Primeau says.
To start your search, talk to the National Association of Personal Financial Advisors (NAPFA), Fee Only Network, CFP Board, or use: This free tool can match you with fiduciary advisors who may meet your needs.
What should an advisor do for you?
First, your financial advisor will need to determine your current situation, including your income, assets, and debts. “You also need to plan for your finances. Is it for retirement, to fund your education, to buy a new home, or for the freedom to quit your job? You also need to plan for your investment risk tolerance. You should also be aware of: Are you usually aggressive or conservative? Based on all these questions, your advisor will come up with a personal plan to diversify your $1 million ” says Brad Wright, a certified financial planner with Launch Financial Planning.
You said you were going to get $1 million soon, but you didn’t say whether it was an inheritance or a payment from a company or something. “Are there taxes? Before we can discuss or recommend investing your money, you need a financial plan,” says John Eaton, a certified financial planner with Avior Wealth Management.
How you should invest your money depends on whether you need the money to live or whether you plan to buy a house or send your children to college. Additionally, your comprehensive plan should be sure to discuss not only the purpose of the funds, but also whether you want to establish an emergency fund and how much cash you want to keep in that account. “This is the first step we recommend all new customers consider,” Primeau says.
It’s also important to consider other assets you own besides the $1 million in cash, such as a 401(k) or Roth IRA. “This plan should be an important starting point, as you need to consider all factors before investing your cash. Plus, given that taxes seem to be involved in everything, CFP We recommend working with an advisor who is not only knowledgeable about taxes, but also knowledgeable about taxes,” says Primeau.
The most important thing you can do is take action. “One thing we know for sure is that while we take no action, inflation is hurting our future purchasing power,” says Andrea Clark, a certified financial planner at Table Financial Planning. To tell. Jordan Rummel, a certified financial planner with LVM Capital Management, added: “It’s a blessing to have a lot of cash, but it can also be taxing, so it’s okay to take it slow.” I am.
Having a problem with your financial advisor or looking for a new one? Email picks@marketwatch.com.
