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How Washingtonians Invest Their Money

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Washington historically has been a city tied to stable, middle-class, government jobs, and that can create a certain way of thinking about investing. But with all the wealth here now (even government employees make six figures), has that mindset changed? Yes and no, say the financial advisers we surveyed.

A number of survey respondents said, in essence: Washingtonians haven’t changed much. The cost of living makes even high earners feel middle-class—and makes them risk-averse when investing.

“I feel that Washington is still tied to secure, middle-class government jobs, and the clients I see are still generally conservative investors who like low-cost index funds or indexed ETFs,” says Ken Diehl of Cornerstone Financial Planning in Gaithersburg.

Other advisers said that while government workers generally are conservative investors, other growing populations—IT professionals, government con-tractors, entrepreneurs—are not.

“This town is no longer a sleepy government town,” says Wayne Zell, an attorney with Odin, Feldman & Pittleman in Reston. “Much wealth resides here, and risk-taking has become more prevalent.”

One thing many advisers agreed on: The investing decisions that Washingtonians make aren’t always rational.

Says Marjorie Fox, a fee-only planner with FJY Financial in Reston: “Entrepreneurs seem to be more comfortable with stocks, despite the reality that they do not have third-party defined-benefit pension plans beyond Social Security. Government employees tend to be conservative, despite the fact they have government pensions.”

Looking for a financial planner, investment manager, or accountant? Head to our financial advisers guide to find the best financial planners and advisers in the DC area.

This article appears in our April 2016 issue of Washingtonian.

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