Financial advisors say 3 strategies have made their clients the most money so far in 2021

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Financial advisors say their clients have made the most money this year from taking three steps.
First, pay down student loan debt while federal relief measures are still in place.
Other tips to try: Try a Roth IRA conversion, and invest in index funds instead of bonds.
Vanguard Personal Advisor Services

I recently realized that I spend a lot of my down time reading financial advice. But the more advice I consume, the more overwhelmed I feel, and then I find myself not doing anything new or having a clear strategy.

Instead of looking for general tips, I decided to focus my research on how to make more money with my existing assets before the end of the year – without taking on too much risk. To do that, I asked financial advisors and planners for the No. 1 piece of advice they’ve given clients this year that’s helped them make the most money.

1. Pay down student loan debt

It might seem odd that one of the tips I received for making more money was around paying down debt, but financial planner Kenny Senour says that doing this right now is a golden opportunity, since interest and payments are paused on most federal student loans through January 2022.

“Some clients that have been sitting on a large amount of cash above and beyond their emergency fund needs have used this opportunity to deploy the extra cash by aggressively paying down their federal student loans,” he told me. “If you are financially in a position to do so, it may be a good idea to be as aggressive as possible over the next two to three months in paying down your federal student debt before the relief period comes to an end in January 2022.”

Any extra payments would go towards your principal, which reduces the interest you owe over time and the total amount outstanding of your loan. The faster you free up that cash, the more you can invest later on.

2. Do a Roth conversion

One thing I didn’t know much about until this year was how to do a Roth conversion, which Olivia Stacey, a financial advisor at Exchange Capital Management, says might save a client money in the future.

“If this year is a relatively low-income year for a client who has a large IRA, we will advise them to convert a portion of that IRA to Roth,” says Stacey. “This will allow future required minimum distributions to be less when their tax bracket will likely be higher.”

3. Take the focus off bonds

A change that Ryan Graves, a financial advisor and president of Bemiston Asset Management, says has generated money for his clients this year is focusing less on bonds, since interest rates are so low.

Says Graves, “Allocating more money to

Source:: Business Insider


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