Where the Pros Stash Their Own Dough, Part 2

Here's part 2 of a piece from Money that reveals the secrets used by several investment pros when handling their own money:

I get professional help.

The president of Lebenthal is a third-generation veteran of the bond industry. Her husband, Jay Diamond, is a REIT executive. But when Lebenthal got a windfall from selling the family business in 2001, the couple decided that they shouldn't invest the money themselves.

"My husband and I realized this was a pool of money we wanted to do the right thing with," says Lebenthal, 41. "We both said, 'We don't want to mess this up by investing in a lot of things willy-nilly, without all the pieces tying together.' " Lebenthal turned to her brother Jim, an equity portfolio manager, for help.

Chances are you don't have a brother in the business, and your net worth is a little shy of Lebenthal's, but the lesson holds: As your portfolio grows and you start planning for the long haul, getting a little advice can be a smart move.

If you've been reading this blog for any time now, you're aware that I don't use a financial planner at this time since I don't think I need one. However, if you need one, you should read How to Choose a Financial Advisor.

Click here to read part 3 of this series.

Comments

[collecting wealth]

The thing about these people seeking professional management for their fortune is because when the asset reaches certain size, it becomes a full time job to manage it. It's not about financial planning, it's about portfolio management, the day-to-day grind of it. I am pretty sure if I have a couple of million in my account, I would either quit my job and manage that money actively, or send all the money to the direction of my money manager.

[Duane Gran]

I believe there is a point of advantaged return where the 1% fee to a financial planner is peace of mind and frees up the investors time in a more profitable way. I'm not sure where that inflection point lies, but I would guess it is in the several million dollar amount. This might make a good topic for discussion on FMF.