re: Advice needed for situation....

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You really should stop. You look like a fool. It's ok to have differing opinions. I'd say we have a lot of that on this board. But literally nobody will agree that your advice is sound. It's just awful. Like the worst I have ever heard....

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This

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First off, this is a fine example of humblebragging. LOL, just messing with you.

I'm curious... you own a construction company from what I gather... do you have a college degree? To get that kind of income from owning your company at your age is amazing.

Does your wife work? How much of that income is yours vs hers?

Do you have any professional advisers? If not... I would recommend finding a good CPA to work with. I think one of your big issues is tax planning at that income/asset level.With you owning your own business, there are some other things that can be done to cut down on taxes (for example, a defined benefit plan).

Do you have any disability insurance? I would look at that.

I would keep at least a year's worth of money in pretty safe investments, as you realize your industry has peaks and valleys. If you had to guess what an awful year for you would be... what kind of income level is it?

A lot of your risk depends on if your wife is working or not. If that income is between two people, I would be willing to take on some more risk.

As far as investments... you sound like you might be now considered an accredited investor which opens up some really nice avenues for you.

I would also spend some time doing some estate planning. I don't think you are too young especially if you think your business will grow. With your kids, there may be some business ownership via trusts, family partnership, and other opportunities to consider.

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hahaha...Not really a bragging kind of guy. I just like the anonymous nature of this board and it is neat to get non-bias opinions. To answer your questions, I have a BSAT degree from ULL and an MBA from University of Dallas. I was an IT consultant for a few years, but moved back home to be close to family when I decided to go into business for myself. My wife was a nurse, but is now a stay at home mother of two. I do have a professional adviser that I trust, but I like to get others opinions as well.

I do NOT have disability insurance and this is something I have thought about for a long time. My work is mostly inside the office doing phone sales and meeting with customers when they come in.

An awful year would probably put me at $50k income or who knows...I am equal owner in a business with two other individuals...If things got bad, my wife could go back into nursing to help pay the bills.

Not really familiar with accredited investor...

I would consider myself very good at running a business...Very good at making money...Very good at saving money...Kind of one of those people that puts my head down and makes it happen...But I know where my weakness lies and that is in investing and being overly cautious with my money. I grew up with very little and I have pinched pennies all my life.

It is nice to hear others viewpoints on these situations...I really appreciate it!

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I do NOT have disability insurance and this is something I have thought about for a long time.

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I would look at DI for a couple of reasons: 1) To help replace your stream of income and 2) I'm guessing you are pretty important to your business and the business might take a hit if you are out for a considerable amount of time.

I'd look at a product to protect yourself, and I'd look at a product that is made for business owners (some call it key-man disability insurance). I'd talk to your other co-owners about it as well.

Since you mentioned you have co-owners, do you all have a buy sell agreement in place funded by insurance? Hopefully whatever CPA firm your company is using, is providing you some good advice on these issues.

I have some products/companies I can recommend if you are interested. Trust me, I'm don't sell anything like this.

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Not really familiar with accredited investor...

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Essentially it's a SEC (the government entity, not the college conference) rule that means in order to invest in certain things, you have to have a minimum level of net worth or annual income. Generally these types of investments tend to be riskier and less liquid. But you can get some pretty decent returns. For example, I have a guy I know that runs an investment fund in Baton Rouge, and they have gotten some really solid results. His fund makes a great piece of the pie for a lot of his clients. But you have to be an accredited investor to get in. I also have a client that is currently selling some LP units in his company, and those investors have to be accredited.

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.But I know where my weakness lies and that is in investing and being overly cautious with my money. I grew up with very little and I have pinched pennies all my life.

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You sound like a lot of my clients (and most CPAs probably would same the same thing). You are really good at what you do, and know you need help in the other areas. You can get a lot of good investing advice on this board, and I would absolutely consider it. But I also think you might the type that can really benefit from working with a financial advisor. My guess is you might work a lot of hours... and with the kids at home, time is probably your most precious resource. But I would also say you should find someone that truly, to borrow a Dave Ramsey phrase, has the heart of a teacher. Someone that won't sell you a package of funds, but take the time to get to know you, and develop a plan with you that you understand.

Awesome advice...I guess way back when when I was just getting started and looked at policies it was just too expensive. I'm going to revisit ASAP. Thanks for the excelent advice.

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$500k in bank (cash)......


Married

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Doesn't compute

With that much scratch, I would definitely find a financial advisor that you trust. talk to others in your industry and see who they use. i understand the need to keep cash in the event of a downturn, but $500k will last you a lonnnggg time with no debt (you sound like you live well below your means). there just really is no need for that much cash - you need to put that money to work for you.

when you talk about being safe in the event of a downturn in your business, it makes me wonder whether you are keeping your business capital separate from your personal accounts. if you are not, you should do that asap. you don't want your arse on the hook if something happens to your business (ie lawsuit). you should be an LLC or a corp if you are not already.


ETA: if you invest that cash, you won't be able to put a large % of it in any tax advantaged accounts. the upside of this is if you needed to use it to support yourself in a bad business year, you may be able to live off the interest/dividends alone.

I recd this in another thread, but you might enjoy a personal finance class. You sound like a go getter who's leery of things he doesn't understand. A semester long course in personal finance would make you feel more comfortable with the various ways your money can be working harder for you. Think of it as acquiring knowledge you can pass along to your children. You need to learn to better manage your wealth, and to teach them to do the same. They're not going to have the same formative experiences you did---remembering hardship keeps you working. So you'll need to teach them about money in ways you never learned as a kid.

Congrats on the success! I reside in Lafayette as well.
I really enjoyed reading this thread; lots of good advice in here.

Since you are in the construction business have you thought of buying rental properties? You could save a lot on repairs. Look for a property that makes $300-$500/m after all expenses and you could do very well.

I really appreciate everyone's feedback! Couple of things...

1. I do realize the importance of disability insurance...Just found out today, one of my partner's has stage 4 cancer...Tough tough day...

2. I love the idea of mixing both 529 plan along with a investment/brokerage account that has some flexibility. I think I am going to go this route.

3. I do have an MBA with a focus in franchising...I have taken many finance classes...It is not so much of a lack of understanding stocks/bonds/investments...Although I do have a LOT to learn...It is really about being overwhelmed by all of the choices that are out there. Sometimes it just feels like the whole market is rigged and having money in the bank is better than having had money in the bank and losing a big chunk do to an ill timed investment. I do have someone I trust...I have been taken for a lot of money by trusting the wrong people and my family has a history of having their businesses going under due to embezzlement by an employee...I am just really cautious you know?

4. I do keep my business finances separate from my personal. No worries there. We are a S Corporation and I have a CPA that does our corporate taxes along with my personal taxes.

Again, I really appreciate all of you input and feedback. You guys convinced me on the insurance side of things along with the educational saving. I really really appreciate this board. Any other suggestions, I would love to hear.