I am 40 and married with two children.  How aggressively should I invest my money right now, and should I own a cryptocurrency?  Here's what 5 financial advisors asked him to do now.

I am 40 and married with two children. How aggressively should I invest my money right now, and should I own a cryptocurrency? Here’s what 5 financial advisors asked him to do now.

Should crypto be part of your overall investment strategy?

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A question: I am 40, married with two children and a wage earner. I wonder how aggressively I should invest in the market if I want to quit my job fairly early. What should my portfolio diversification look like right now, and should I invest in cryptocurrencies?

Answer: How aggressively a person should invest in the market is a function of a variety of factors such as how much you can save, how long the investments can accrue, how much you plan to spend in retirement, and your willingness to take on and take risks. “Being bolder in your investments may mean taking on more risk, which you may or may not be able to take,” says Jay Zigmont, certified financial planner at Live, Learn, Plan. (This tool can help match you with a counselor who may meet your needs.)

But a calculated risk may be what you need to take if you want to quit your job soon. “This means that you may need to be more aggressive in allocating assets. The term for this in the investment world is ‘there is no alternative’ (TINA),” says Matthew Jenkins, certified financial advisor at Noble Hill Planning, who adds that “the increased savings rate critical.” Also. In your case, the savings rate may need to exceed the traditionally recommended 10-15%.

Have an investment question? Send an email to picks@marketwatch.com and we’ll ask a panel of CFPs to answer for you.

So what would it be like for a 40-year-old who wants to quit the job in 10 or 15 years? First, think about what you want your lifestyle to look like after work. Depending on how extravagant or humble you are, professionals say you may want to have between 60% and 100% of your pre-retirement income in each year of retirement; You can consider Social Security when you start taking it, too, and don’t forget to note health care costs. Since you’re hoping to quit work sooner, you may want to assume that you’ll be withdrawing 2-3% per year, instead of 4% per year.

As certified financial planner Lei Deng says, you’ll want to make all of your goals more realistic to help solidify these numbers. Ask yourself things like: “What age are you thinking about retirement? How much money do you expect to spend when you withdraw? What is a rough estimate of your life expectancy? These questions can help you answer how much money you will need when you withdraw” .

Should you hire a financial advisor for investment assistance?

When it comes to how to invest your money to achieve these goals, many people choose a financial planner to help them – this tool can help match you with an advisor who might meet your needs – although that comes at a cost. This may be due to how comfortable you feel doing it yourself, and whether you like to outsource your financial decision making. Here’s a guide on what you should ask of any consultant you might hire, and here’s what you can expect to pay the consultant (but note that many consultant fees are negotiable).

If you decide to choose investments for yourself, this guide on diversification and how to invest if you want to retire early, which highlights diversification and low-cost money as keys to success, can help. Certified Financial Planner John Piershale of John Piershale Wealth Management says, “Diversify across sectors, add 15 to 20 years, and you can have a good income-earning portfolio when you retire and keep up with inflation,” high-quality, dividend-paying preferred stocks with a history of increasing dividends In your wallet, too.

Should crypto be part of your investment strategy?

Many advisors say that most, if not all, portfolios should contain some alternative investment. “The 60/40 equity portfolio has been under pressure recently, and adding alternative investments is a good idea when looking to diversify,” says Josh Chamberlain, certified financial planner with Chamberlain Financial Advisors. But beware of investing in any asset you don’t understand, and the portion of your portfolio that you put into alternative assets doesn’t need to include cryptocurrencies, although it can. Just remember that “the ups and downs of cryptocurrency can cause dizziness,” says Chamberlain.

Asking yourself what is attractive about cryptocurrencies, what is the point of having crypto in your portfolio and whether it is for diversification or potential return, can help decide if you should invest in it. “If you are a big believer in cryptocurrencies and already have a good portfolio to reach your goal, you can dedicate a small portion to the cryptocurrency that meets your comfort level,” says Deng. In the end, cryptocurrency may be a wild ride. “There is money to be made but you have to do your homework and make sure the ice water flows through your veins. There will be a lot of ups and downs ahead,” Jenkins says. (This tool can help match you with a counselor who might meet your needs.)

Don’t forget to keep in mind taxes

Other things to consider are a tax plan, and where to save money. “If you withdraw money from retirement accounts before age 55, there are very few options available to you to avoid the 10% penalty and taxes,” says certified financial planner Blaine Tedderman. So you will also need funds in non-retirement accounts such as a brokerage account. “The reason is that if you want to withdraw from these accounts long before your normal retirement age, you won’t be charged for withdrawals and you can still take advantage of some tax saving techniques,” says Thederman.

Have an investment question? Send an email to picks@marketwatch.com and we’ll ask a panel of CFPs to answer for you.

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