Might be useful to reread the windfalls wiki. Sometimes it is costly to unwind some investments and mistakes we make, especially in a taxable account. Very few financial advisors are FIDUCIARIES and will put your welfare ahead of their $$$$.
When in doubt, we put our windfalls into a FDIC insured account until we figure out our path forward.
And if your windfall is larger than $250000, then split it up between multiple FDIC INSURED accts
^ Is it safe to keep multiple FDIC insured accounts in the same bank or it is safer to split it up to accounts at multiple banks (or brokers also these days), i.e., one account at each bank and the balance of each account is less than $250,000?
If the balance is under $250,000, itās fine to keep it all in one FDIC insured account. If you are concerned, yes you could have it at more than one place.
@1214mom, the problem (okay, ONE of the problems) with having someone manage your money for a year is that they know that you might do that. They will have you invested in a dozen or more sliced and diced funds with high ERs, and it will be difficult to unravel. It will appear that you need tremendous analytic ability just to manage your accounts. Nonsense. Itās a bunch of hand waving.
Our accounts are closer to 8 digits than to 6 digits. I am dumber than a sack of hammers, but I can manage our accounts quite nicely, thank you. A simple 2-fund or 3-fund portfolio is sufficient. For some people in high tax brackets, add tax-free bond accounts. If you really think you need help, talk to a Vanguard rep for a 0.3% fee, but Iād just spend a few hours reading Bogleheads (the recommended books and/or the forum) and you will know how to decide the asset allocation that you are comfortable with. Done.
@1214mom, I missed the edit window, but hereās a link to someone whose investment advisor put them into 22 funds. 22! https://www.bogleheads.org/forum/viewtopic.php?p=2679252#p2679252
Iāve been loyal to fidelity since I was employed. You have nothing to lose by making an appointment. Vanguard is also good, but will be phone calls.
We got āburnedā by getting charged a lot for our taxes being done a few years ago - I knew the firm would do a good job, but they charged way over on what time was spent. Well I knew I had to put in an amended return for 2014, with a lot of money coming back but didnāt know how to do it with Turbo Tax (special tax situation with closing out of a family trust - had tax credits). A CPA made a brief presentation through our financial guy, so I took a chance with him. So glad - he found the way to amend pretty quickly and bill was very reasonable, $125. We have tax credits that carry over, so I will āstartā our tax return for 2015, but allow our CPA to finish them. Happy to have him do this work for us and he is glad to have a happy client.
So sometimes a financial guy can save you in other ways.
You can also try āsplittingā your money - invest some yourself and see how well you do compared to financial person. If the financial personās plan is good and it will relieve you of stress while doing well enough financially for you, you can always roll the rest of your
It does take really evaluating a financial guy/gal over time to decide if he/she is steady, trustworthy. I felt a whole lot better about my financial guy when I found out from a client of his (who I knew through a church activity - we all belong to different churches) that her H and her have been clients of his for over 10 years. She is very people savvy and so am I; H also likes our financial guy.
For FDIC purpose, joint accounts at each bank will be insured up to $500,000, $250,000 for each of the co-owners, is that correct? Thanks.
Are there any investment firms where your money is insured from wrongdoing?
Is there any reason to split your money between investment firms?
Is anyone with Vanguard funds concerned over the lawyer who is accusing Vanguard of not paying enough taxes to the IRS? (billions)
@sax,
Iām with Vanguard and Iām not worried.
The lawsuit is about whether or not Vanguard is charging their funds enough for their management services. Letās leave aside how silly that sounds, and assume that they will eventually owe every penny of the $34.6 billion, which is quite a stretch. With -$3 trillion in AUM, thatās a bit more than 1%, which is roughly what I gain every year by not giving my money away to an advisor. The suit alleges that Vanguard did this over 7 years, for a total of $34.6 billion.
No way, no how.
Vanguard isnāt going out of business, and even if they lose they will most likely settle for a small fraction of the total amount.
If that lawyer gets whistleblower status, he could make billions, so it is easy to see what his motivation is.
If Vanguard loses though, it will likely end low-fee mutual funds, and that would be a real shame. Or it would force them (and others) to change how they structure their business, if that is possible.
Thanks for your perspective. I appreciate your views a great deal.
"Is it safe to keep multiple FDIC insured accounts in the same bank or it is safer to split it up to accounts at multiple banks "
safer to split it up , imho
"For FDIC purpose, joint accounts at each bank will be insured up to $500,000, $250,000 for each of the co-owners, is that correct? "
NO.
Its $250,000 per account- regardless of who or how many people are on the acct.
@menloparkmom, $250,000 per account, thatās what I thought originally, the following link seems to indicate that with one bank/institution, joint owners of accounts are insured up to $500,000.00, I am so confused.
https://www.fdic.gov/deposit/deposits/brochures/your_insured_deposits-english.html (the Joint Account section)
e.g. if me and my H have $200k in a savings account, $100k in a money market account in the same bank, the total ($300k) falls under $500k and will be fully insured.
I canāt tell which is correct.
hmmm- THAT link suggests that EACH owner of a joint acct is insured to $250,000.
So if that is correct, then up to $500000 of deposits in joint accts at each banks would be insured.
Iāve always been told that each owner of a joint account is insured for up to $250k.
@Himom, @Madison85, thank you for the info and link.
@1214mom, congrats on the windfall. I do not manage things myself but hired a fee-only financial planner whose only interest (other than doing a good job) is to ensure that I am happy and hence will not put my into things with high fees. I also have some money at a brokerage firm and the FA there will suggest things with high fees. They do provide terrific service for certain things (we have a couple of companiesā accounts there). But, the advice you are getting here is pretty reasonable. Vanguard and Fidelity can be helpful at relatively low cost (especially Vanguard in terms of cost). I do find that a) I donāt have time to manage my investments and can make more money working than I can increase my returns by spending time on the investments; and b) having two advisors has caused a few things to fall through the cracks.
@SOSConcern, when I worked in the family office of a wealthy family, we got the tax advice of some of the best tax accountants in the country ā both on transactions and dealing with the familyās assets ā from one of the Big 4 firms. When I left there (and moved), I asked a number of people about where I could get that quality of advice ā proactively finding ways to save taxes, lay out a variety of options and assess the risks of each for me to choose, etc. Four out of five people I asked gave me the same name. He came up with a tax structure that has probably saved me over $10K per year for 20 plus years. I donāt take big risks but my situation is somewhat complex (one partially owned company, one fully owned company, benefit plans, various kinds of investments, a somewhat complicated trust, income from a number of countries) and I am happy to pay a) for advice; and b) for someone else to do the tax returns (which run quite a few pages).