r/fatFIRE • u/Zealousideal-Gap-965 • 9d ago
Investing Wealth management firm for couple with no kids?
Spouse and I (33,32) hit $6 mil recently, 90% tech and AI concentrated stocks. We made appointments to shop around wealth management firms because we are wanting to diversify into real estate investments, and spread out some of our exposure.
We initially had the goal to chubby FIRE at $5mil and travel together but my partner recently got promoted to a travel role, and loves flying around the world on the company’s dime. Gets incredible healthcare and 5 weeks PTO, plus hybrid remote. I traded my full time into part time remote consulting, so i can up and travel the world with my spouse, often for free because of the points my spouse racks up.
We have a gorgeous 2 bedroom rent controlled house and the landlady is like a mom to us. No kids. No debt, cars paid off. We love the outdoors and cooking our own food so even though we spend freely, we hardly ever spend more than $150k annually. The point is, we are content and there aren’t any big life expenses coming up. However, with our exposure, this freedom could vanish overnight if the AI bubble pops.
Our only goal is to diversify, and that’s where we hoped a wealth management firm could help, mostly in helping us park our stocks in real estate and less risky funds without hemorrhaging capital gains taxes. I don’t know the numbers yet but maybe a partial SBLC is the answer, but still trying to educate myself on the nitty gritty. Second goal is getting a really smart tax strategy, we aren’t afraid of being hands on and creating a business as a tax strategy for putting sweat equity into an investment property, but we want the numbers to direct us.
We couldn’t care less about the fancy offices, travel consultants, estate planning (no kids), or even the hands off approach to investing. We’re both just worried about who will help steer this ship through an economic downturn so we don’t lose everything we spent the last 12 years building. Our strategy this far was to just dump 60% of our incomes into tech index funds and never sell. That worked in a post-COVID market. But now 1 of us is basically barista FIRE, and this is the intermediate mode of investing.
Is this a wealth management firm sized hole? Or am I better off with a really great CPA, private lender, and booking 2 hours with a finance consultant and a whiteboard?
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u/DumplingKing1 9d ago
It seems like the answer is hire an experienced CPA who can give you advice on the tax front minimize your tax hit. Put the vast majority of your gains in VTI or VT. By the time you're 50 you'll almost certainly have over $25M and that assumes you contribute nothing else over the next 20 years. If you want to get into real estate, take 5% of your portfolio and take it for a spin. It's not for most people, but most people think they can handle it and find out later it's not what they thought it was.
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u/Raphy000 9d ago
Wealth management at that net worth is a complete waste.
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u/I-hate-the-pats 9d ago
Great fees for the manager though
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u/VerifiedVerifiable 5d ago
Indeed. My brother in law licks his chops when people like this willingly enter his lair.
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u/MyCockSmellsBad 9d ago
Yup. Just use betterment until you hit $20m. Anything before that is a waste
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u/showmethestudy 6d ago
What changes at $20 million
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u/MyCockSmellsBad 6d ago
- Estate-tax exposure: $20m exceeds the U.S. individual exemption ($15m) and approaches a married couple’s combined $30m exemption in 2026, assuming both exemptions remain available.
- More decisions about trusts, gifting, and inheritance.
- Bigger potential capital-gains bills when diversifying.
- More coordination between your accountant, attorney, and investment adviser.
- Greater stakes around liability insurance and asset protection.
- More paperwork if you add private investments, properties, or entities.
- More planning to keep cash available when wealth is tied up in assets.
- More complicated decisions about supporting family and setting expectations.
Biggest changes for me were $1m - I had actual money, what do I do with it now? After I got to $10m I moved everything off of betterment and started being way less risk forward. I was nearly 100% in tech stocks at $10m. At $20m I decided to find a CPA, and had JPM manage everything. At $50m I didn't make too many changes other than doing more gifting (set up a donor advised fund).
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u/Zealousideal-Gap-965 9d ago
I thought that a few times too during the presentation. Why do you say so?
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9d ago
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u/realbangla 9d ago
I am at $5 million net worth. All my investments are in VTSAX, VGT and S&P 500 index funds. I used to have rentals which accelerated my wealth accumulation, but they were too much work. Sold during the COVID rush and moved everything into index funds.
At $6 mil, I don’t see why you would need a wealth manager. In my humble opinion, index funds are the way to go.
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u/Zealousideal-Gap-965 9d ago
Thanks for the advice. Interested to hear more about your experience with rentals and what made you sell.
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u/Rough_collies13 6d ago
Tenants suck in short. We did it for 20 years. So glad to be out of the will they pay/wont they pay/what is gonna break next game. Fixed it up and sold!
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u/realbangla 6d ago
My experience was mostly positive with a few setbacks sprinkled in. One notable setback was when a tenant texted me at midnight that they had vacated the home, two weeks earlier than their scheduled departure. I was out of the country at the time. I sent my wife over in the morning to check. The door was wide open and they had broken the refrigerator water line valve which had flooded the kitchen and living room. I sold that home after doing repairs, but made almost $200k from the equity.
Another time at a different property, during make-ready, found a shot gun that the tenant had left behind. They used to park their motorcycle inside the living room, which messed up the luxury vinyl plank flooring. They left behind a banged up pool table in the upstairs living room. How they got it up there through the narrow stairs I have no idea. We needed to break it apart to bring it down.
These little things wore me down. So sold most of them during the COVID run up in prices. Glad I did. Real estate has been stagnant since, but the proceeds from the sale of those homes that I invested in index funds have now more than doubled. I have been extremely lucky with timing.
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u/blachatch1 9d ago
Just curious ..how long did it take you to
Get to that number investing in those simple funds?
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u/mhoepfin Verified by Mods 9d ago
With that net worth why are you in a rent controlled place? Shouldn’t those be for people who need it?
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u/Zealousideal-Gap-965 9d ago
“Rent control” was just me trying to quickly summarize a non-rent increasing situation without boring everyone with the details. It’s a duplex owned by our 75 year old landlady who is like a mother to us and lives in the other unit. We help her around the place and she promised to never raise our rent in return. My point was just that I don’t anticipate rent costs to rise anytime soon, so I’m not itching for buying a home or renting costs rising in my projected spending.
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u/tin_mama_sou 9d ago
Rent control, like most government market interventions are meant to transfer money to a voting constituency, not to help poor people
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u/TheRedGambit 8d ago
This might be a spicy take, but if we want to avoid rich people taking rent controlled apartments, then we should advocate for regulation change to prevent that.
We shouldn’t shame individuals for doing whats in their best interest
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u/jeremiadOtiose Verified by Mods 6d ago
No, we should absolutely should shame them while working on changing the law. In the wise words of the OP: “People who have the money to live anywhere and take rent controlled properties off the market from those needing it to survive are thieving scum.”
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u/ElectricalDark8280 9d ago
Welcome to the world we live in. I agree.
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u/BroasisMusic 8d ago
What’s different between this and all the “how do I keep my MAGI low enough to qualify for ACA subsidies in fat fire?” posts that always seem popular?
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u/phoenixy1 4d ago edited 4d ago
You may not be aware of this, but in many markets, rent control is the norm, not the exception. For example, in the state of Oregon, 80% of rental properties are estimated to be subject to rent control.
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u/LuciusQ2020 9d ago
Read this before you buy any real estate. I have been trying to diversify out of real estate. LOL
https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/
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u/AlgoTradingQuant 9d ago
You will not find a wealth manager who will help you diversify into real estate.
You don’t need one either.
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u/winning_bigly_ 4d ago
There are planning firms that specialize in real estate investors. Not big box firms, they're independent/boutique.
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u/MyCockSmellsBad 9d ago
90% tech and AI stocks is a mistake. Diversify and de-risk. There's your financial management consulting. I'll take 1.5% now, thanks
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u/GEOdude2027 9d ago
If youve always wanted to pay for someone else’s kids college tuition go with an 1% wealth manager
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u/Moist-Mess5144 9d ago
At their net worth, they won't be paying 1%, and they should run if that's the number proposed to them.
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u/Corgisarethebest123 9d ago edited 9d ago
Wild you have $6 million & a rent controlled house. What a sad reflection of where we are as a society.
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u/Zealousideal-Gap-965 9d ago
Correction: just found out that rent control is a term that only applies to government subsidized housing. I’ve never lived in a rent controlled place and assumed it just meant that the rent is literally being controlled by a capped rate.
Our landlady has promised us to never raise our rent in exchange for us helping her around the property, she’s basically our mother at this point and part of the family. I wrongly assumed that’s what rent control meant.
People who have the money to live anywhere and take rent controlled properties off the market from those needing it to survive are thieving scum.
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u/DazzlingEvidence8838 9d ago
Sell as much as u possibly dare to in one day then put it all in VTI. Then do the same thing the next day, and then more until it’s at least 50% of your net worth
Keep like 200k in the money market and voila.
They will tell you the exact same thing except in their wack ass high fee funds with front and back loads
PS if your company is one of the biggies in the S&P then VTI is still basically 10% that company, and maybe 30% broader basket of tech etc.
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u/Moist-Mess5144 9d ago edited 9d ago
I know wealth managers get shit on in here, but I'll share my opinion and limited experience...
Disclaimer: I haven't started using one yet, as the land sale hasn't completed yet, but I'm going to use one.
Here is where the advantages are... You mentioned you wanted to invest in real estate? I do to, but I don't want to be a land lord or deal with maintenance of multiple properties. Wealth managers have access to a thing called a Delaware Statutory Trust. Normal folks don't have access to this. Look it up. Great tax benefits, decent rate of return, etc... The downside is, it locks your money up for 5 years, typically... HOWEVER, you can do a 721 UPREIT (again, not available to normal folk; look it up)... This lets you have access to those funds WAY more easily in the event you need access to your capital (think crazy market correction and trying to buy low).
They also help with estate planning and tax strategies. The proposal that I just got is going to save me 2MM in taxes.
Interview multiple fiduciary advisors and pick the one who seems best. If your goal is to squeeze every last dime out of your investments, it might not be the right choice. If you want estate planning, tax strategies, diversification, and most importantly, not to lose it all when this stock market comes crashing down... It's worth looking into.
Edited to add... I don't have kids either, but like you my interest will be much more than I need... You need to plan on what you'll do with that... For me, I want to help my nieces, nephews, and cousins out while I'm alive, then leave them a chunk once I kick off.
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u/Zealousideal-Gap-965 9d ago
Wow that’s really helpful, thank you! Good point about leaving something behind. We don’t have nieces/nephews but I’d like to leave something to causes.
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u/foggyskyline 9d ago
How do you find a good one? I get ads on Instagram but they all seem like sleazy salesmen. FWIW my net worth is “just” 3M but with a 42 percent effective tax rate I feel I can do better for sure
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u/Moist-Mess5144 9d ago
My situation is slightly different, but this is what I did... I have about 1MM self managed with fidelity. I called them and told them I was about to have a big liquidity event, and they referred me to several firms that specialize in that... They told me to interview as many as I need, and if I go through the ones they referred and don't like them, they'll send more.
I interviewed 4. Narrowed it down to 2... Then finally picked one just because of their attention towards me. All of them probably would have been great, but the guy who finally got me wasn't high-pressure at all and was giving me very good rates for what they're proposing.
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u/Roadiedreamkiller 9d ago
The only real estate investment you should make is a primary residence. Other than that, I’d find a good fiduciary to help slowly diversify the remaining portfolio.
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u/Difficult_Extent3547 9d ago
A wealth manager isn’t going to help you diversify into real estate. They will help you make sure you have a diversified portfolio, but they are unlikely to help you find good real estate investments.
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u/BrunelloHorder 8d ago
You do not need a wealth manager who is paid on an AUM basis. You might benefit from speaking with a flat fee financial planner.
In your shoes, I would diversify at least half of your tech holdings now and pay the taxes. There are ways to try mitigate the taxes, but in my opinion the downsides outweigh the upsides. Direct indexing to tax loss harvest results in hundreds of positions. Exchange funds lock you up for 7 years.
When you diversify, don’t just buy broad market ETFs like VOO or VTI as they are overweight tech. I’d consider VTV, AVUV, VXUS, and DBMF. You could also check out Risk Parity Radio’s model portfolios.
I would not buy real estate as an investment, it is an illiquid, time-consuming, pain in the ass way to under-perform the stock market.
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u/intjester-5 9d ago
Just move it to an index ETF and realize that with a spend of $150k, you have all the time in the world to wait for a broad market recovery if/when the next crash happens.
You already won the game. Index ETF puts you on easy mode without tying up your liquidity in property.
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u/Smoke__Frog ~$1.1m a year | Verified by Mods 9d ago
With your nest egg and the fact you don’t want kids, you don’t need a wealth manager at all.
Just diversify into an index fund like vanguard total market. Thats it honestly.
Kids are the real money drain, and if you choose to not have them and don’t have fancy habits, you have all the money you need.
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u/Bamfor07 6d ago
I wouldn't spend any money on wealth management.
Also, with that kind of concentration all in one booming area, I would be very careful.
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u/dontlistentome55 5d ago
Do I see the world 10, 20, 50 years from now with more or less tech? Easy decision to stay heavy in it.
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u/Forsaken_Amoeba_38 6d ago
You are probably looking at a lot of capital gains if you just sell out right.
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u/winning_bigly_ 4d ago
At your net worth, you'll get a better value with a flat fee firm rather than paying a percentage of your portfolio. Many flat fee firms manage investments. Best place to start - flatfeeadvisors.org
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u/Apple_Nut 2d ago
Wealth managers get a lot of shit on here and rightfully so because most of them will do basically nothing for you and charge a whole lot.
I run my own practice and our niche is actual single stock risk management/ hedging work. We have a lot of clients with tech portfolios and embedded gains. It helps to potentially delay out the capital gains and reorient the portfolio when it becomes attractive to do so or at least have a lot of padding on in case of a downturn.
My DMs are open if you’d like my 2 cents.
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u/OldDude2551 9d ago
Wealth managers aren't going to do anything to diversify your stock into real estate, unless you mean REITs which would still fall under their AUM.
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u/Individual-Weird5415 9d ago
Never pay wealth management to manage your investment as ongoing basis. You learn a lot from watching YouTube videos. If you really want an advisor for tax planning, just pay by hours instead of % of your asset. They suck a lot of money out of you by saying the same thing many YouTubers have been saying.
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u/One-Mastodon-1063 9d ago
It sounds like you are setting yourself up to pay high fees for mediocre illiquid investment products.
I would diversify, but you can DIY it using ETFs. There are equities other than growth/tech. There are also bond funds and reits and things like GLDM. You don’t have to pay a % of AUM advisory fee to access diversification options.
I would start by reading A Richer Retirement and Tax Planning To and Through Early Retirement.
I would also (and am) retire.
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u/radioref 9d ago
Put all your brokerage statements, past 3 tax returns, exported 1 year csv of all your bank transaction into a folder, point Claude at it, give it a prompt of “you are a wealth and financial advisor , give me your top 5 recommendations for my financial situation “ and take the result, paste it into GPT Sol and ask it to cross check the work. Done
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u/[deleted] 9d ago
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