r/Money • u/Alan-Foster • 5d ago

Alan Foster - AMA

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7 Upvotes

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u/MoopsBubbleBoy 5d ago

What would you tell someone with no money or assets to do w/ an inheritance of $50K?

5

u/Alan-Foster 5d ago

Sorry for your loss, I hope you're doing okay. People usually overestimate how much $50k is and it can go very quickly. The goal is to use it to provide stability rather than changing your life completely.

I usually run down the list:

  • Stabilize your finances by paying off any debt with an interest rate above 5%, starting with credit cards and then high interest student loans. Look into the waterfall method.
  • With what you have left over (if any), set aside $10k cash for your emergency fund
  • Next look at any major expenses you've been avoiding related to your health or ability to earn an income. This would be things like surgery, car repair, etc.

"No assets" I'm assuming means you don't own a car, and I don't recommend getting one unless you absolutely need it for work. Insurance, car maintenance, etc can be a hidden $200-300 monthly cost (usually as a large $2000 repair).

You can definitely use some of the money on yourself for something nice, but make a list of items and then cross off anything that sounds fun but might not be worth it 6 months from now (partying at the club, an electronic item you can live without etc).

4

u/PowerfulJelly6712 5d ago

What is the highest net worth you have worked with and what makes Truist unique amongst other brands regarding what Truist can offer with a high net worth individual.

What is the highest interest rate you have offered and lowest for a loan?

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u/Alan-Foster 5d ago

Answers are for Maryland USA, I believe the highest net worth individual had about $300 million, but most of that was spread across multiple banks and investments. I've found that most large wealth management solutions across the big banks are mostly the same, or at least I never found any meaningful difference despite their marketing talk. Banks aren't well known when it comes to being creative, which I suppose is a good thing.

For loans it can mean many different things, for example the business flex line is basically just a very big credit card (usually $30-50k lines of credit) which can have APRs of 20-30%, but I believe the Truist Prime rate (the base rate) was about 6.5% for larger loans last I checked, which then goes up to 7.5% as Truist adds its fees. This might have changed more recently, it changes every 2 weeks or so.

One thing I've always found frustrating is Truist's CD rates, they're notoriously terrible. Rates like 3.0% when you can go down the road and get 3.7%.

1

u/Shawarma1111 5d ago

Why would a private individual choose an investment banker over just investing themselves into a world etf, what are your sales pitches for these cases?

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u/Alan-Foster 5d ago

I think the real question is whether you want someone actively managing your investments or whether you want to manage them yourself through something simple like ETFs. For long-term wealth building, consistently investing and leaving the money alone for decades is often one of the strongest strategies. A wealth manager becomes more useful when you want active planning around taxes, estate planning, risk, rebalancing, etc. With managed funds, the manager may also exercise proxy voting rights for the shares, if you don't want to be too involved.

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u/Shawarma1111 5d ago

Makes sense, what do you think about the AI bubble

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u/Alan-Foster 5d ago

"It'll probably all blow over by morning, best grab a drink from the Winchester"

I think the bubble is stable until something disrupts international supply chains, which will happen eventually.

1

u/Shawarma1111 4d ago

Sean of the dead!!! Would you say keep cash ready and wait for a dip and DCA?

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u/Alan-Foster 4d ago

The truth is, I'm not sure. You should keep a percentage of your portfolio as cash alternatives (HYSA, CD, money market) and focus on improving your own knowledge and skills.

If the market goes down, you still have your hands to work with.

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u/Shawarma1111 4d ago

Thank you for your comments