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Keepinitpriv
Anon
2012-Dec-14 8:56 am
[Serious] Fell into some moneySo due to a family passing I've inherited my fathers estate, after split and dues it came out to $80K. That was 8 months ago, immediately paid off all our revolving debt at the time, leaving just the mortgage.
To avoid being stupid and foolheardy, I locked the money away (to the chagrin of my wife), lived at our current modest means, still have 75K sitting earning interest (LOL). Problem I'm having is the couple bank based financial planners haven't impressed me with their offers, it's feels like its mainly investments geared to obtaining commissioned earnings.
So open floor, kinda curious on idea's that you would do with a sudden win fall. |
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Get a safety deposit box, and buy a few thousand ounces of silver, wait ten years and profit! Silver is at a 55:1 ratio to gold, which is cheaaaaaaap. So you can't loose. (maybe) |
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to Keepinitpriv
Well if you want get risky and play the mutual fund markets or stocks.
If you want to be safe as interest rates suck everywhere right now as well as gic's etc.. go with one of the higher interest rates saving acct. at a bank. I know its not much but at least your not locking your money in.
Currently I use Manulife's online only advantage savings which is at 1.65% 75k would give you approx. $80-90 in interest each month. |
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eksterHi there Premium Member join:2010-07-16 Sainte-Anne-De-Bellevue, QC |
to Keepinitpriv
If you want to play it safe with savings/GIC's... go with a bank in Manitoba.
Achieva currently has savings at 2%, and 5 year GIC at %2.85... that's way better than any big bank will ever offer you. |
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donoreo Premium Member join:2002-05-30 North York, ON |
to Keepinitpriv
Of course the bank people are going to offer something that makes them money. In fact, that is all anyone is going to offer you.
You could split it, though it is not that much money, into several things. Max out your RSP for this year and previous years. Whatever is left you could then do your own investing, pick a discount brokerage like e-trade and go do some of your own research. I think retirement planning is the best option for this small amount.
Overall, this is NOT a lot of money. Do not think of it as being much and it will be easier to decide what to do with it. My father in law is a stock broker and he would not consider taking you on, you do not have enough to invest. Most of the experienced good guys are going to be the same. |
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Wolfie00My dog is an elitist Premium Member join:2005-03-12 |
to Keepinitpriv
I'm not going to give financial advice nor do I think I'm qualified, but you are absolutely correct about commission-hungry "financial planners." Just as some thoughts, an amount like $80K could all be put into a conservative mixed fund with low management fees, or, if you're willing to ride out the ups and downs of the stock market, an index fund which has almost no management fees at all. |
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dmas1er join:2006-10-11 Peterborough, ON |
to Keepinitpriv
Live life on the edge... buy stock in RIM. I bought at 8 bucks.... |
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A Lurkerthat's Ms Lurker btw Premium Member join:2007-10-27 Wellington N |
to Keepinitpriv
said by Keepinitpriv :That was 8 months ago, immediately paid off all our revolving debt at the time, leaving just the mortgage.
So open floor, kinda curious on idea's that you would do with a sudden win fall. I'm not a financial planner, but on the concept of what I would do with the money... (the exception is that I have only a small equity loan on the house, mortgage paid off years ago with one that allowed me to pay extra any time) See what the terms are of your mortgage (ie. can you make a one time and/or annual payment to lower the amount). Top up RRSPs and/or TFSA with low to medium risk investments (depending on your overall financial state). Keep a % of it easily accessible if any of the following are fairly old in the house: roof, heating system, potential high cost items, etc. Same goes for car (if older and getting up there in repair costs) If you (or your spouse) are in a lower paying job that you hate, consider returning to school and upgrade your skills. Take that trip you've always wanted to take. - - - - All of them depend on what your general financial situation is. If you can continue to live within your means then do so. From your original post it sounded like you had 5K of revolving debt when you had the windfall. Hopefully in the 8 months since it hasn't started to creep back. I know from a friend that years ago won 250K (encore back before it was a million) that it's easy to not worry about it if you can get to it easily. They: paid off mortgage, replaced a vehicle, topped up RRSPs, etc. They had little left at that point, but without a fairly substantial mortgage payment left them with less stress and more money overall. |
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BigSensFan Premium Member join:2003-07-16 Belle River, ON |
to Keepinitpriv
Sorry to hear about your loss As for the money... spend a little.. save the rest (I think RBC has a bullion fund that is pretty good » www.bmginc.ca/benefits_o ··· nds.html |
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resa1983 Premium Member join:2008-03-10 North York, ON |
resa1983
Premium Member
2012-Dec-14 10:52 am
RRSP, TFSA. As for the mutual funds: Regulators eye crackdown on soaring mutual fund fees » www.theglobeandmail.com/ ··· 6328913/ |
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FaxCap join:2002-05-25 Surrey, BC |
to Keepinitpriv
Myself.....I would buy 400 shares each of Royal Bank, Scotiabank and Bank of Montreal.
They should bring you just over $3000/year in dividends.
You could also drop one of those 3 banks and buy 200 shares of either TD or CIBC shares hoping they will split soon.
FaxCap |
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elwoodbluesElwood Blues Premium Member join:2006-08-30 Somewhere in |
to Keepinitpriv
NO pay off your debts, as Ms Lurker put it, see if you can make payments against your mortgage, trust me, you'll be debt free and much happier, then some others here who listen to "financial advisers' are up to their earballs in debt. |
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Keepinitpriv
Anon
2012-Dec-14 12:24 pm
All the revolving debt is payed in full, all that's left is household expenses and our average monthly bills for insurance, vehicles, dining and entertainment.
Mortgage is over 150K left in principal, well before this win fall we've been adding $400 to our payments, no plans to stop that anytime soon.
Right now the money is split in a GIC, and both we and my wife have 20k in TFSA'S just so we are minimizing paying any taxes. |
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peterboro (banned)Avatars are for posers join:2006-11-03 Peterborough, ON |
to elwoodblues
said by elwoodblues:NO pay off your debts, as Ms Lurker put it, see if you can make payments against your mortgage, trust me, you'll be debt free and much happier, then some others here who listen to "financial advisers' are up to their earballs in debt. Yes, but living in a new house and driving new cars is the cat's meow and all the rage...if you were in the US pre 2008 I guess. Pay off all debt, top up RRSP and invest in safe relatively liquid instruments...and watch Doomsday Preppers. |
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Wolfie00My dog is an elitist Premium Member join:2005-03-12 |
Wolfie00
Premium Member
2012-Dec-14 12:40 pm
I thought you were going to chime in here to recommend grand larceny as a financial strategy! BTW, is the arrest warrant out yet? |
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to Keepinitpriv
It seems like you're onto them already as to the fact that the "financial planners" you're talking to most likely are just salespeople. Find a fee only financial planner and/or look into DIY index/ETF investing. There's plenty of free information on the web or spend some free days at the library in the finance/investing section. Lots of great books on the subject with varying strategies.
Though as others have mentioned, you can't go wrong with paying off debts. It's basically a guaranteed return.
The route I went: paid off mortgage and went head first DIY. |
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El QuintronCancel Culture Ambassador Premium Member join:2008-04-28 Tronna |
to BigSensFan
A quick correction for the sake of accuracy, RBC is the back office for BMG, but BMG is it's own company, and isn't associated with RBC otherwise. |
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MaynardKrebsWe did it. We heaved Steve. Yipee. Premium Member join:2009-06-17 |
to Keepinitpriv
Assuming you don't want to dip into the money of other things, split the money into $10k chunks or so. Buy round lots (multiples of 100 shares) of - a utility company - a bank common stock - another bank preferred stock - consumer non-durables company (most likely US - like Proctor & Gamble - people brush their teeth even in a recession) - maybe a food company - maybe a REIT - some others which have relatively low P/E's, good earnings growth, decent dividend growth
Where possible take advantage of dividend reinvestment plans, if you're not needing the cash dividend. |
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EUSKill cancer Premium Member join:2002-09-10 canada |
to Keepinitpriv
Up or down, who knows |
I'm not a bug, however hedging is a valid strategy. |
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ZZZZZZZ Premium Member join:2001-05-27 PARADISE |
to Keepinitpriv
Real return bonds |
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to Keepinitpriv
Re: [Serious] Fell into some moneyIf your mortgage is at anything over 3% interest rate pay it off as much as you can (without penalty). It might even be beneficial to actually pay the penalty to get out of your current mortgage, apply as much of your inheritance as you can to it and re-negotiate for a shorter term mortgage for the rest at today's extremely low interest rates. Without knowing the specific number involved it's difficult to say for sure if that's the best idea but it is certainly worth considering and running through the numbers.
IMO It'll be the best for your long term financial stability. |
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peterboro (banned)Avatars are for posers join:2006-11-03 Peterborough, ON |
to Wolfie00
said by Wolfie00:I thought you were going to chime in here to recommend grand larceny as a financial strategy! BTW, is the arrest warrant out yet? After pulling off what arguably constitutes the largest financial institution fraud in Canadian history I will now retire to spend my largess and consider the book offers and movie scripts that will undoubtedly roll in. The only problem is who to pick to play me in a movie. Clooney or Pitt? Neither are good looking enough so I might pass on the movie for now. |
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your moderator at work
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koiraHey Siri Walk Me Premium Member join:2004-02-16 |
to peterboro
Re: [Serious] Fell into some moneysaid by peterboro:said by Wolfie00:I thought you were going to chime in here to recommend grand larceny as a financial strategy! BTW, is the arrest warrant out yet? After pulling off what arguably constitutes the largest financial institution fraud in Canadian history I will now retire to spend my largess and consider the book offers and movie scripts that will undoubtedly roll in. The only problem is who to pick to play me in a movie. Clooney or Pitt? Neither are good looking enough so I might pass on the movie for now. said by peterboro:said by Wolfie00:I thought you were going to chime in here to recommend grand larceny as a financial strategy! BTW, is the arrest warrant out yet? After pulling off what arguably constitutes the largest financial institution fraud in Canadian history I will now retire to spend my largess and consider the book offers and movie scripts that will undoubtedly roll in. The only problem is who to pick to play me in a movie. Clooney or Pitt? Neither are good looking enough so I might pass on the movie for now. pass on the movie for now LOL Thanks I needed that,I'm grabbing another double rye and coke |
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SteveI know your IP address
join:2001-03-10 Tustin, CA
1 recommendation |
to peterboro
said by peterboro: The only problem is who to pick to play me in a movie. Clooney or Pitt? Dame Edna. |
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AnavSarcastic Llama? Naw, Just Acerbic Premium Member join:2001-07-16 Dartmouth, NS |
to Keepinitpriv
The markets are too risky to invest, Keep it in cash. Agree with perhaps taking half down on the mortgage. Ask yourself if you can afford the current mortgage if rates rise to 6, 12 ,18 percent. |
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peterboro (banned)Avatars are for posers join:2006-11-03 Peterborough, ON |
to Steve
said by Steve:said by peterboro: The only problem is who to pick to play me in a movie. Clooney or Pitt? Dame Edna. Close, but I'm not into purple this year. |
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koiraHey Siri Walk Me Premium Member join:2004-02-16 |
to Keepinitpriv
All of this is based on me an average ordinary dog poop picker upper debt free nobody.
If it was my situation I would pay down at least a good part of the mortgage, I agree with IamGimli as I doubt you have a rate better than 3 % . Even if some penalty is involved in your current agreement, you may be able to negotiate something with your mortgage holders. You may want to keep part of it as cash for emergency security as Lurker mentioned. Use that as a negotiation tactic with your lender. Invest your cash with them but pay down a chunk with reduced penalty.
On the other hand you have options to invest and your age is a consideration. If you were to go the investment route in some low to medium risk funds you wont do much better than 3 % return with this sum in todays market. This would be suited to a mature approaching retirement profile. if you are young and are willing to take some higher risk over longer term you can do very well for returns, but be prepared to take a buy and hold strategy and not loose sleep or puke over a short term roller coaster ride. I'm talking don't puke and sell if things go bad overnight. Buy and hold means buy and hold. You have to accept trust in the risk of a longer term and higher risk portfolio manager working on your behalf.
But here are never ever guarantees ... Remember past performance does not guarantee future results. Who knows what disaster or world event will crash the market next week, month etc
You didn't mention where your employment income comes from. If you rely on anything but self employment or even if self employed, life is a lot easier to manage without debt hanging over you. Consider for example if you loose your job and you don't have a mortgage vs mortgage with large monthly payments
Every ones goal should be to invest for long term / retirement while at the same time reduce or eliminate debt completely then move forward with an investment strategy. Cash money in the bank earning low interest is a false sense of security if you have debt at higher interest rate. Its still a loosing proposition.
Everyones situation is different based on age, debt, income, timing, risk tolerance and lifestyle. Then throw in some global economy and world events which drive the markets. All of these factors come in to play when you seek advice and ultimately your end results ... wealth and net worth. Early in the game the more you learn and apply will reward you later in your later years.
Best of luck, you are better off to be in the game watching learning and involved to some degree than doing squat.
There is no easy answer. |
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to Anav
said by Anav:The markets are too risky to invest, Keep it in cash. Agree with perhaps taking half down on the mortgage. Ask yourself if you can afford the current mortgage if rates rise to 6, 12 ,18 percent. I am very sorry for your loss. I agree with Anav! I was in that situation 21 years ago. My mortgage was at 12.75% at that time. It is a wonderful feeling to get that albatross off from around my neck. Since you say you are "debt free", I assume any and all other loans are paid off. Depending on your preference, maybe set some aside for a vacation. Now: Look at what is your interest rate on your mortgage. Can you get a guaranteed ROI of double that? As well, you will also need an ROI of 6% to keep your current spending power (inflation). Remember, something called "income tax"? That will remove almost 50% of your ROI. Find out when your mortgage becomes "open", and place the maximum you can without penalty down on it. Also see about increasing payments (without penalties). When does your mortgage come up for renewal? You can pay the rest of your budgeted inheritance down at that time. With a mortgage hanging over your head, do not consider yourself "debt free". I wish everything works out for you. |
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to Warez_Zealot
I've already taken your bet i'm heavy short both gold and silver. Naked uncovered future puts (buy the puts) on both. |
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