$10,000 IRA that I can't contribute to right now

[greaper007]

I have an IRA account worth about $10,000 that I won't be able to contribute to for the next year or so (wife and I are aggressively paying off a few debts).    It's currently in a mutual fund that's being managed by my dad's FA.   Since my dad has given him so much business, and this fund is so small, he doesn't currently charge me to manage it.

So what would you do?    Let it ride, move it to a different fund, invest in something other than boring low gain mutual funds?

[MDM]

Boring is ok.  Low gain, when the market is doing well, is not.

Need more info on the fund itself: load or no-load, expense ratio, type of fund, performance vs. benchmark, etc.

[Trudie]

I'd look at Vanguard index funds or ETFs.  While I can't tell much about the fund in which you've invested I'd venture to guess that since it's under the thumb of a FA there are fees buried somewhere, even if he's not talking about them.

In general I don't like investing with friends or friends of friends... we fired a financial advisor who was sort of a friend of my husband, but it was necessary and saved us a few thousand in fees a year.

Remember this adage:  NOBODY ELSE will care about your money as much as you do.

[taekvideo]

Are you contributing to any retirement account?
If not look into the saver's credit... it might be more profitable to put at least a couple grand into retirement savings each year to capture that, even if it slows down your debt repayment.

[greaper007]

Thanks for the replies.    No, I'm not contributing to anything right now.    I'm a stay at home dad and my wife owns a consulting business (s-corp, I'm a VP).    We've been plowing money into it for the past 2 years, and worked on building up a cash buffer last year.    We're breaking 6 figures in income now, but a lot of it is going out the door to legacy costs for the rest of the year.

I think we'll start a 401k this year, but in the meantime we've worked on getting the business strong enough to weather storms and hopefully move to a little bit more of a hands off model.    We've also been aggressively paying off student loans (which include very low interest credit cards that we used for loans).    I think I'll be contributing more to something by the end of the year, but everything is on hold right now.

This particular account was something I was contributing to as a teenager and then wasn't able to contribute to in my 20s as I never had a job that paid over $40K (airline pilot).    Now I'm starting to think that I should do something a little more aggressive with it.

[frugaliknowit]

Move it to Vanguard Total Market or S&P 500 fund or ETF.  You might blend Vanguard Total International with it (15-25%).

[rmendpara]

I have an IRA account worth about $10,000 that I won't be able to contribute to for the next year or so (wife and I are aggressively paying off a few debts).    It's currently in a mutual fund that's being managed by my dad's FA.   Since my dad has given him so much business, and this fund is so small, he doesn't currently charge me to manage it.

So what would you do?    Let it ride, move it to a different fund, invest in something other than boring low gain mutual funds?

The most important thing is that you leave it invested. Don't withdraw or take a loan from it or other craziness like that.

Whether it stays with the adviser or you do it yourself also isn't going to make much of a difference. With such a small balance, you could pick almost any market index fund and be just fine. You won't be able to pick more than 3-4 funds anyway (most Vanguard funds have a $3k minimum), plus with a relatively small balance it's not going to matter much.

If you feel better, roll it into Vanguard and manage it yourself. It's very easy. Unless you plan to have more assets with the adviser in the future, you might as well do it yoruself.

Focus on your business and paying off debt. This will be much more significant to your finances.

[greaper007]

I have an IRA account worth about $10,000 that I won't be able to contribute to for the next year or so (wife and I are aggressively paying off a few debts).    It's currently in a mutual fund that's being managed by my dad's FA.   Since my dad has given him so much business, and this fund is so small, he doesn't currently charge me to manage it.

So what would you do?    Let it ride, move it to a different fund, invest in something other than boring low gain mutual funds?

The most important thing is that you leave it invested. Don't withdraw or take a loan from it or other craziness like that.

Whether it stays with the adviser or you do it yourself also isn't going to make much of a difference. With such a small balance, you could pick almost any market index fund and be just fine. You won't be able to pick more than 3-4 funds anyway (most Vanguard funds have a $3k minimum), plus with a relatively small balance it's not going to matter much.

If you feel better, roll it into Vanguard and manage it yourself. It's very easy. Unless you plan to have more assets with the adviser in the future, you might as well do it yoruself.

Focus on your business and paying off debt. This will be much more significant to your finances.

Thanks, that's pretty much been my attitude for the last 2 years or so.    I might try investing it on my own as I'm not a huge fan of the FA.    I just used him because I setup the account when I was 14 and my dad had to do it for me.