Topic 'Re: [Serious] Fell into some money' in forum 'Canadian Chat' - dslreports.com

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 13:21:39 EDT

markf posted : I was in a similar situation and went mostly all in with a second property. It is a long term proposition, and you don't change your lifestyle based on it. Year 1 is obviously a money losing proposition as you invest in capital upgrades (depending on the property you buy), but I am anticipating 2013 to be more prosperous in this venture. At this point I'm not considering the property value to carefully because I would not be all that surprised if values dropped over the course of the next couple of years. I viewed many properties, almost backed away from the idea, but then was able to get what I thought was a nice property and a decent price where the rent is able to cover mortgage, taxes, insurance and maintenance with a bit of profit each month. The area is a high demand area for rentals, so I'm not too worried (yet!) about keeping it full.

I took a little bit and put in in stocks in a TFSA(based on the return on my stocks I should have gone all in on stocks - bought RIM with average price of $10, up over 35% in 6 weeks!).

If you go non-registered investments, pay down as much mortgage as you can, borrow back and adjust payments as necessary to what you want them to be (pay minimum against the "investment" cash for now, and maximum against the "mortgage" cash - that way you reduce non-deductible interest first). If you can get it as a mortgage or secured line of credit, interest rates are low. The interest that you were paying on your mortgage becomes interest on money you have used to invest, therefore it is tax deductible.

A note however, if there is too much chagrin from the wife in more than just this area, you may want to stash the cash somewhere safe, under only your name. If her name wasn't on the will, it legally is your cash alone to do what you want with it. If you pay down mortgage you give that up from legal advice I have received.

I am not a financial planner or lawyer, so make sure you consult with your own professionals before you do anything.

Good luck with whatever you choose to do.

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 11:55:17 EDT

dragonfly posted : Pay off debts.

Max out your TFSA allowance and leverage that into some relatively low-risk income funds.

You could use the rest to get into the rental market game, as a downpayment on an investment property, if you're feeling adventurous and don't mind the 2nd mortgage. I'd wait a year or two to see what happens with the real estate market though.

As always, this advice is pulled straight out of my butt.

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 11:13:28 EDT

kingb71 posted : pay off the mortgage.

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 11:13:22 EDT

capdjq posted : If you plan on needing money to spend, in the short term, do not invest. Investments are long term propositions. You must have the stomach to withstand the roller coaster rides economically and remember no investment is a sure thing.
Long term deposits are fine until you need the money before the term expires.
Also remember that all interest is 100% taxed so the 2-3% might be half, depending on your income. Investments are taxed more favorably.
--
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Re: [Serious] Fell into some money

Sat, 15 Dec 2012 02:29:11 EDT

anon posted :

said by Keepinitpriv :

So open floor, kinda curious on idea's that you would do with a sudden win fall.

Hi Keepinitpriv,

My name is King Abdul Harakah.

I have to flee my country due to chemical & biological weapon use and need to move my untold fortunes out as well.

If you reply back giving me power of attorney of your bank account I will then transfer my untold fortunes unto you. After which I will the count on you to return the billions of dollars back to me when I reach Canada. All I need is your word and power of attorney.

You can contact me here in this post, or mail me at:
Attention: King Abdul Harakah
Abegunde Ibukun Opeyemi
10 Celestial Avenue
Lagos Nigeria 23401

Time is of essence my new friend. Hurry.

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 02:29:01 EDT

anon posted : Canadian bank and Canadian REIT's are the last thing in the world to buy. Most of the Canadian banks were just downgraded and will continue to be downgraded in the future. I'm looking for a 80 percent fall in the big 5 share values. Looking for a 40 percent fall in the TSX and another 40 percent fall in the Candian bank shares on top of that in 2013.

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 02:28:49 EDT

anon posted : Putting $25,500.00 into a TFSA this coming January would be a far better idea.

Re: [Serious] Fell into some money

Sat, 15 Dec 2012 02:28:35 EDT

anon posted : I've already taken your bet i'm heavy short both gold and silver. Naked uncovered future puts (buy the puts) on both.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 23:52:04 EDT

vintagewino posted :

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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 23:01:14 EDT

fast4ward posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 22:16:43 EDT

peterboro posted :

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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 21:09:03 EDT

Anav posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 18:36:07 EDT

Steve posted :

said by peterboro:

The only problem is who to pick to play me in a movie. Clooney or Pitt?

Dame Edna.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 18:32:16 EDT

fast4ward posted :

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? :D

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? :D

pass on the movie for now LOL Thanks I needed that,I'm grabbing another double rye and coke

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 14:26:28 EDT

peterboro posted :

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? :D

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 14:17:47 EDT

IamGimli posted : If 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.

Real return bonds

Fri, 14 Dec 2012 14:08:40 EDT

ZZZZZZZ posted : »www.bylo.org/rrbs.html

»opinion.financialpost.com/2012/1···n-bonds/

is a great investment.
--
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Re: [Serious] Fell into some money

Fri, 14 Dec 2012 13:54:56 EDT

EUS posted : I'm not a bug, however hedging is a valid strategy.

Up or down, who knows

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 13:19:48 EDT

MaynardKrebs posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 13:16:31 EDT

El Quintron posted :

said by BigSensFan:

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_of_bmg_funds.html

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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Re: [Serious] Fell into some money

Fri, 14 Dec 2012 13:02:33 EDT

yupislyr posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 12:40:34 EDT

Wolfie00 posted : I thought you were going to chime in here to recommend grand larceny as a financial strategy! BTW, is the arrest warrant out yet? :D

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 12:36:48 EDT

peterboro posted :

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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 12:24:39 EDT

anon posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 11:03:00 EDT

elwoodblues posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 10:59:58 EDT

FaxCap posted : 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

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 10:52:14 EDT

resa1983 posted : RRSP, TFSA.

As for the mutual funds:
Regulators eye crackdown on soaring mutual fund fees
»www.theglobeandmail.com/globe-in···6328913/
--
Battle.net Tech Support MVP

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 10:44:46 EDT

BigSensFan posted : 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_of_bmg_funds.html

--
"The hardest thing about any political campaign is how to win without proving that you are unworthy of winning." ~ Adlai E. Stevenson

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 10:41:33 EDT

A Lurker posted :

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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 10:20:12 EDT

bitchtorn posted : Live life on the edge... buy stock in RIM.

I bought at 8 bucks....

;-)

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 09:56:22 EDT

Wolfie00 posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 09:54:46 EDT

donoreo posted : 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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I mock people who give their children odd spelling of names.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 09:52:11 EDT

ekster posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 09:50:41 EDT

Riplin posted : 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.

Re: [Serious] Fell into some money

Fri, 14 Dec 2012 09:44:22 EDT

Warez_Zealot posted : 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) ;)

[Serious] Fell into some money

Fri, 14 Dec 2012 08:56:59 EDT

anon posted : So 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.