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I am 40, married with two children. How aggressive should I be investing my money right now, and should I own cryptocurrencies? Here’s what 5 financial advisors told him to do now.

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Should cryptocurrency be part of your overall investment strategy?

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Question: I am 40, married, two children, employed. I’m wondering how aggressively I should invest in the market if I want to leave my job a little earlier. What should my portfolio diversity look like right now, and should I invest in cryptocurrencies?

Reply: How aggressively someone should invest in the market depends on a variety of factors such as how much you can save, how long the investment can accumulate, how much you plan to spend when you retire, and how willing you are to borrow. and bear the risk. “More aggressive investing can mean 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 you find a consultant who can meet your needs.)

But calculated risk may be what you need to do if you want to quit your job anytime soon. “This means that you may have to be more aggressive in your asset allocation. In the investment world, it’s called “No Alternative” (TINA),” says Matthew Jenkins, Chartered Financial Consultant at Noble Hill Planning, adding that “increasing the savings rate is also paramount.” In your case, the savings rate may need to go well beyond the 10-15% traditionally recommended.

Have a question about investing? Email picks@marketwatch.com and we will ask the CFP team to answer this question.

So what might that look like for a 40 year old who wants to quit his job in 10 or 15 years? First of all, think about how you want your post-work lifestyle to look like. Depending on whether he’s generous or frugal, the pros say you can aim to have anywhere between 60% and 100% of your pre-retirement income available to you each retirement year; you can also consider social security when you start taking it, and don’t forget to include health care costs. Since you are hoping to quit your job early, you can assume that you will be withdrawing 2-3% per year rather than 4% per year.

And as Lei Dan, a certified financial planner, says, you need to make all of your goals more specific to help solidify those numbers. Ask yourself, for example: “At what age do you think you will retire? How much money do you plan to spend when you retire? What is your approximate life expectancy? These questions will help you answer how much money you will need when you retire,” she says.

Should you use a financial advisor to help you invest?

When it comes to how to invest their money towards these goals, many people choose a financial planner to help them – this tool can help you find a consultant who can meet your needs – although it comes at a cost. This may depend on how comfortable you feel doing it yourself and whether you enjoy outsourcing financial decisions to others. Here’s a guide on what to ask any consultant you might hire, and here’s what you can expect from a consultant’s fee (but note that many consultant fees are negotiable).

If you decide to choose investments on your own, this diversification guide and an investment guide if you want to retire early can help you. “Diversify by sector, add 15 to 20 years, and you can have a good retirement income portfolio that keeps up with inflation,” says certified financial planner John Piershale of John Piershale Wealth Management. , which adds that you will need high returns. high-quality, dividend-producing blue-chip stocks with a history of increasing dividends in your portfolio.

Should cryptocurrency be part of your investment strategy?

Many advisors say that most, if not all, portfolios should contain some kind of alternative investment. “The 60/40 bond and stock portfolio has been under pressure lately, and adding alternative investments is a good idea to diversify,” says Josh Chamberlain, Certified Financial Planner at Chamberlain Financial Advisors. But beware of investing in any asset you don’t understand, and the portion of your portfolio that you invest in alternative assets doesn’t have to include cryptocurrency, although it can. Just remember that “up and down fluctuations in cryptocurrency can make you dizzy,” says Chamberlain.

By asking yourself what is attractive about crypto, what is the purpose of having crypto in your portfolio and for diversification or potential returns, you can determine if you should invest in it. “If you are a big believer in crypto and you already have a good portfolio to reach your goal, you can allocate a small portion of crypto that suits your comfort level,” Dan says. Ultimately, crypto can be a wild ride. “Money can be made, but you have to do your homework and make sure you have ice cold water in your veins. There will be many ups and downs ahead,” says Jenkins. (This tool can help you find a consultant who can meet your needs.)

Don’t forget to include taxes

Other things to consider are the tax plan and where to save money. “If you withdraw funds from retirement accounts before the age of 55, you have very little opportunity to avoid a 10% penalty and taxes,” says Blaine Tiderman, a certified financial planner. As such, you will also need money in non-retirement accounts such as a brokerage account. “The reason is that if you want to withdraw funds from these accounts long before you reach retirement age, you won’t be charged a withdrawal penalty and you can still take advantage of some tax-saving methods,” Tiderman says.

Have a question about investing? Email picks@marketwatch.com and we will ask the CFP team to answer this question.

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