Investment Advice
Discussion
Hi,
I have a great friend and neighbour, in her eighties, who was widowed in May.
She has a six figure sum of money and is not sure what to do with it.
She's wary of financial advisers after some bad experiences in the past.
She's interested in getting some return, but without too much risk.
I have some ideas, but I'm no expert, so any suggestions from the PH Learned Brethren would be greatly appreciated.
Jazzer
I have a great friend and neighbour, in her eighties, who was widowed in May.
She has a six figure sum of money and is not sure what to do with it.
She's wary of financial advisers after some bad experiences in the past.
She's interested in getting some return, but without too much risk.
I have some ideas, but I'm no expert, so any suggestions from the PH Learned Brethren would be greatly appreciated.
Jazzer
Lets assume she has 20 years left? Has she got a way of taking it with her ?
My great aunt left over £500K and yet didn't have a working toilet in her house. She used to fill up a bucket of water and take it upstairs to pour down the loo.
I inherited £15K. Personally I'd have been happier inheriting nothing.
Assuming her house is in good order I suggest investing like thus:
Thomas Cook
P&O Cruises
The Ritz or Similar
A full time house keeper and Gardener and chauffer.
My great aunt left over £500K and yet didn't have a working toilet in her house. She used to fill up a bucket of water and take it upstairs to pour down the loo.
I inherited £15K. Personally I'd have been happier inheriting nothing.
Assuming her house is in good order I suggest investing like thus:
Thomas Cook
P&O Cruises
The Ritz or Similar
A full time house keeper and Gardener and chauffer.
Well there is a big difference between 120K and 950K, lets work on 500.
50% in a UK or Global allocation fund, allocation funds have a mixture of equity and usually bonds, but at present most are using bank loans, also known as variable rate instruments.
Other half short duration bonds (or variable rate fund) with the dividends paid to her current account to enhance her standard of living.
Each year any gain form first half used to buy more bonds so as to increase her monthly income hopefully in line with inflation.
A more adventurous person like myself would use high yield for the second 50%, paying around 6%, that's mostly bbs but default rate is below 2% (historically vg)
Basically any mix that provides her with index linked income is better than than annuity.
50% in a UK or Global allocation fund, allocation funds have a mixture of equity and usually bonds, but at present most are using bank loans, also known as variable rate instruments.
Other half short duration bonds (or variable rate fund) with the dividends paid to her current account to enhance her standard of living.
Each year any gain form first half used to buy more bonds so as to increase her monthly income hopefully in line with inflation.
A more adventurous person like myself would use high yield for the second 50%, paying around 6%, that's mostly bbs but default rate is below 2% (historically vg)
Basically any mix that provides her with index linked income is better than than annuity.
Jazzer said:
Thanks!!
I know it wasn't investment advice I gave, but old people seem to save for a rainy day, not realising that it's raining as bad as it's ever going to get. My Grandad was struggling to look after himself, in his own home, eeking out what we all thought was a megre pension, when my mum and aunt had a look at his financial situation, and discovered that his local government pension, was enough to pay the following:
A rota of 9 paid helpers, recruited from my aunts church, who either stayed overnight in the spare room, just in case, or who came in to cook and clean, plus someone who came into do the garden. It meant that he was never alone more than 3 hours.
All my aunt had to do was employ them on his behalf, and organise a rota a couple of weeks in advance.
The amazing thing is that his pension was more than enough to pay for this, and he was still saving for his old age.
I really believe that if anyone over 80 is given investment advice they need to be reminded that they are not immortal, and it's not a sin to spend some of it.
I appreciate this lengthy post.
She's not afraid to spend money at all, she's just conscious of having a sizeable sum of money earning peanuts.
I do hear what you're saying though, I'm certainly going to enjoy mine if I ever get there!
Who was it who once said something like "I spent millions on booze, women and cars, but wasted the rest!"??
Maybe George Best?
She's not afraid to spend money at all, she's just conscious of having a sizeable sum of money earning peanuts.
I do hear what you're saying though, I'm certainly going to enjoy mine if I ever get there!
Who was it who once said something like "I spent millions on booze, women and cars, but wasted the rest!"??
Maybe George Best?
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