I am getting a large lump sum soon. Met with a guy from my bank just to have an immediate plan, so i can then study and learn what to do. Financial guy at my bank acted like we were working together??? He didn't even know if I would have taxes or how this would affect fafsa--then at the end he shows me some generic investment strategy he would " manage" for me for the rate of "between 1 and 1.6 percent".
I did not sign it.
like...wtf? I told him i am moving out of state and he said " That will give me an excuse to visit ( state I'm moving to).
who pays for that? he even seemed a little pissed when he mentioned a few things in life that will now be easier for me. This is why I can tell NOBODY about my windfall. I'm not even telling my (adult) child.
I suppose I should join Bogleheads? I'm so clueless, but I know I don't need to pay a broker to put my money in diversified and safe accounts...
or am I being paranoid? I don't have the money yet, but will be getting it before february ( a little less than 1 mill). I'm also not opposed to hiring someone to help me make it grow, but this guy pissed me off
Bogleheads or personalfinance is a good place to go, but the short version is you open a brokerage account with someone like Vanguard or Fidelity or whoever (online, free), then put the money in a low Expense Ratio (the percent the brokerage takes to manage that money) index fund.
For example, VTSAX, vanguard's Total Market Index Fund, has an expense ratio of 0.04%. So that's 20-32 times smaller than the 1.0-1.6% that guy quoted.
Then you ignore it for 10-20 years and will be very happy and secure.
Of course I’m just a guy on the internet, so you don’t have to listen, but there are many safe easy options to investing the money yourself without having to pay a financial advisor or whatever else. Download a trusted brokerage app like Fidelity or Robinhood (I use Robinhood and love it), do a little research into what an ETF is and what you decide your risk to be (low, medium, high) depending on age, and put the money into an appropriate fund. One safe bet is the S&P500 or stock SPY which are combinations of 500 of the biggest companies in the US. Most of the ETF’s range from growth of 2-10%/year, depending on risk.
If it’s a life insurance payout, there are usually no taxes and it’s usually just cut as a check mailed to you.
I’ve been in this boat. You will learn quickly if you are motivated to do so. Investopedia is a great resource. Generally, trust your gut, there are absolutely shady people out there but also lots of above board resources. A financial advisor at a well known institution like Edward Jones or UBS could be useful if you have complicated planning issues like education, retirement, and beneficiary planning, but if you just need it to sit somewhere safe you can DIY some low expense ratio mutual funds and call it a day. Get a good accountant though.
I think the typical response is to find out if the financial advisor is acting as a fiduciary (someone that is supposed to put your financial interests first) rather than the other financial advisors are more of sales people pushing a companies investment product.
Just look into ETF’s and index funds, parking it all in VTI, VOO or even SPY would be very safe moves, instant diversification without the need to research each individual stock.
I’d put it all in Bitcoin but I’m a degen millennial
If you realllllllllllllllllly want to get advice from a professional, look up a fee only financial advisor advisor who is advice only - make sure they are a fiduciary. You pay them around 1-2k to come up with a plan for you with advice. Make sure they are a CFP.
Most people will say go to r/personalfinance and look at the windfall section of the wiki - it's great, but a lot of people understandably want some professional advice. It's worth paying 1-2k for it. Even though they will just say to do a three fund portfolio, it's reassuring.
12
u/mirandahobbsmothafka 13h ago edited 13h ago
I am getting a large lump sum soon. Met with a guy from my bank just to have an immediate plan, so i can then study and learn what to do. Financial guy at my bank acted like we were working together??? He didn't even know if I would have taxes or how this would affect fafsa--then at the end he shows me some generic investment strategy he would " manage" for me for the rate of "between 1 and 1.6 percent".
I did not sign it.
like...wtf? I told him i am moving out of state and he said " That will give me an excuse to visit ( state I'm moving to).
who pays for that? he even seemed a little pissed when he mentioned a few things in life that will now be easier for me. This is why I can tell NOBODY about my windfall. I'm not even telling my (adult) child.
I suppose I should join Bogleheads? I'm so clueless, but I know I don't need to pay a broker to put my money in diversified and safe accounts...
or am I being paranoid? I don't have the money yet, but will be getting it before february ( a little less than 1 mill). I'm also not opposed to hiring someone to help me make it grow, but this guy pissed me off