What to do with your money if you don't need it?

[Starsky]

The only money I have in the market is money I want to work for me. The 'extra' money that I don't need to put to work is in cash and physical PM. I only wish I could withdraw more of my IRA funds penalty-free and take it out of the hands of TBTF banks.

If your father's adviser is suggesting CDs and bonds, he is certainly helping him to minimize risk and hang on to his money. I definitely wouldn't want to be the one suggesting he ignore that advice and go into the market now, especially at such an historically high level. There seems to be a lot more downside than upside risk at these P/E ratios and in this stagnant economy. I do feel much better having some PM in my portfolio as stored value for a bad day, but not as an investment.

I wouldn't feel bad about missing out on the market now, in favor of having lots of liquid cash to invest after the next big cyclical market opportunity - whether it be in stocks, real estate or other income producing asset. (It is overdue to happen within the next couple of years). Until then, travel and fun sound like a much better investment.

 

[daylatedollarshort]

I don't think it is necessary to attend or belong to a church to give money to one. I've given money to a local church I've never been to in order to help support their homeless programs.

 

[Koolau]

It seems to me that the only reason (cited) to move to CAN is for cheaper health care. I suppose if money gets tight, he could then move. Other than that I'm surprised he would even entertain that idea (unless there are other reasons not mentioned to move.)

I have a number of charities which will benefit if I have money left over. The kids will get a little bit - not much. We got 'em educated, started out in the world, helped with house down payments, wedding expenses, Roth IRA funding, etc. So we helped while we are alive. But everyone is different, so YMMV.

 

[dixonge]

re: Canada vs US taxes and health care...

Debunking Canadian health care myths – The Denver Post

 

[savory]

re: Canada vs US taxes and health care...

Debunking Canadian health care myths – The Denver Post

The article reflects the conversation I had with a group of Canadians sitting around the pool in Feb. One was patiently waiting for his second knee replacement surgery. All were pleased with their care.

 

[jcnyc]

JC you need to have a sit down with your parents. If they are risk adverse then the answer is CD's and Bonds. If they have some tolerance to risk then AT LEAST 25 % in equities. 500k in Vanguards VTSAX and 75 % 1.5 million in intermediate bond fund VBILX. Shame after 35 years they feel the need to leave the country that made them millionaires.

Funny you say that because my dad always says had he stayed in China (where he's from), he'd be a far richer man. He doesn't regret anything and obviously, who would have had the foresight decades ago to know China would undergo hyper growth. Also I don't think people need a reason to leave whatever country that made them "rich". I certainly have no plans to stay int he US once FIRE occurs. It's a big world out there, lot more to see than the 50 states

 

[donheff]

If he is going to leave it to you he should heed your advice. I would recommend that he put it in a diversified set of index funds at my current AA.

 

[kcowan]

JC
I think your Dad is reacting to all the diverse inputs he receives. I am sure he can afford Medicare plans A thru D. As a dual citizen, he can always apply to re-enter Canada if and when the facts are known.

He should probably load up on FI because an experience with equity might be negative in the next 6 to 9 months.

What to do with the estate is a much longer conversation! When I get it figured out, I will share it.

 

[Bamaman]

I see the price of housing in Ontario on HGTV and I just cringe. Last time we were in Nova Scotia, we were paying 15% sales taxes and the cheapest beer was $12.99 a six pack. I don't know how families make it financially without second jobs--much less save enough to retire early.

Our U.S. low cost of living far out strips the cost of healthcare --especially after Medicare kicks in. I'll just be glad to vacation there periodically

 

[jcnyc]

I see the price of housing in Ontario on HGTV and I just cringe. Last time we were in Nova Scotia, we were paying 15% sales taxes and the cheapest beer was $12.99 a six pack. I don't know how families make it financially without second jobs--much less save enough to retire early.

Our U.S. low cost of living far out strips the cost of healthcare --especially after Medicare kicks in. I'll just be glad to vacation there periodically

All in the eyes of the beholder. To your low US cost of living point, I raise you with my NYC cost of living where a 1bed is $4k a month, 40+% in income tax, and a glass of wine is $14. I'm sure if a Canadian came to NYC and saw my expenses, they would think the same thing as you. Cheap and expensive places everywhere.

 

[savory]

I see the price of housing in Ontario on HGTV and I just cringe. Last time we were in Nova Scotia, we were paying 15% sales taxes and the cheapest beer was $12.99 a six pack. I don't know how families make it financially without second jobs--much less save enough to retire early.

Our U.S. low cost of living far out strips the cost of healthcare --especially after Medicare kicks in. I'll just be glad to vacation there periodically

Having some Canadian blood, I looked at a couple of places that were meaningful to me. Here is an interesting cost of living comparison with some towns in the USA, Canada , and from around the world. Like the USA, there are towns that are more affordable in Canada. Windsor which is right over the Detroit river is comparatively affordable. Halifax is on the expensive side being higher than Houston, cheaper than NYC.

You will need to find your way down on the link to see a bar chart comparison. I did not search to see if people felt these were accurate numbers but I expect if the assumptions are poor, they have been made the same for all cities.


https://www.numbeo.com/cost-of-livi...United+States&city1=Windsor&city2=Chicago,+IL

 

[target2019]

We're dual Can-US citizens and I assumed canada would have free healthcare for him if not drastically reduced vs the USA. I'm not too familiar with retirement healthcare in teh US at all but he told me in passing he'd have to pay something like 2k a month for him and my mom for basic coverage. Perhaps he is ill informed but I certainly am even less so!

Lots of good advice in this thread for you. Congratulations to your parents for working hard in the US, and possibly moving back to Canada.

This could be a good time for you and parents to study up on the retirement picture. Don't necessarily have to make big changes, but discuss the possibilities with parents. In the long run it will benefit your family.

One thing I'd like to point out is that it is difficult to imagine what life will be like for your parents in 5, 10, 20 years or more. Some of that 2M can go far in helping them through difficult years.

What do you suppose it would be like in Canada vs US if one or both transition to long-term care? Probably not something they want to discuss, but it becomes very important for many, later in life. Do you know of any cost comparisons between the countries?

 

[pb4uski]

....Question is, what would you do with $2m of liquid assets if you don't really need to use it? He doesn't know much about markets and investing. His financial advisor keeps telling me to shift to bonds and CDs as he approaches his retirement. I think is a bit ridiculous but they probably need to abide from some script. Personally, I think he should keep that money invested in the markets; I'd pick tech myself. But I wanted to get opinions from others more experienced than myself in the matter!

My mother is in a very similar situation.... she hasn't touched her retirement portfolio in years since SS and commercial property cash flow are more that what she spends. Since she has 5 heirs, I invest it in a 60/40 AA consistent with what her heirs would invest it.

For those who have "won the game" there are two schools of thought. One is since you don't need to take risk then invest it all in safe investments. the opposite extreme is that since you don't need the money you can take a lot of risk and even invest it all in stocks.

Why would anyone with such excess live in Central America or Canada when they can easily afford to live in the US?

 

[savory]

My mother is in a very similar situation.... she hasn't touched her retirement portfolio in years since SS and commercial property cash flow are more that what she spends. Since she has 5 heirs, I invest it in a 60/40 AA consistent with what her heirs would invest it.

For those who have "won the game" there are two schools of thought. One is since you don't need to take risk then invest it all in safe investments. the opposite extreme is that since you don't need the money you can take a lot of risk and even invest it all in stocks.

Why would anyone with such excess live in Central America or Canada when they can easily afford to live in the US?

I think we agree on the path forward in terms of the investment.

While I do not know much about living in Central America, moving to Canada could be a wonderful thing. It's a great place and offers a wonderful lifestyle. The weather could be a problem as it in many areas of States but that can be rectified with a warmer weather home or the endurance of a Canadian.

 

[Danmar]

Why would anyone with such excess live in Central America or Canada when they can easily afford to live in the US?

You probably didn't mean this as an insult to Canada, but lumping Canada in with Central America this way is quite an affront. I could afford to live anywhere in the world, but Canada is my home. On many measures, Canada ranks very high as a good place to live and in most personal happiness measures ranks quite a bit ahead of our wonderful neighbour to the south. That that's probably just fake news.

 

[MichaelB]

You probably didn't mean this as an insult to Canada, but lumping Canada in with Central America this way is quite an affront. I could afford to live anywhere in the world, but Canada is my home. There are many reasons why, but let's not go there.

I think you're reading something into the post that isn't there.

 

[Danmar]

I think you're reading something into the post that isn't there.

Could be, maybe he could clarify? As I said I doubt it was intentional. Wording is basically as follow: "Why would anyone who has some money live in Canada when they can live in the US? ". Sounds a little insulting to Canadians?

 

[Music Lover]

I think you're reading something into the post that isn't there.

Okay, let's flip it around:

Why would anyone with such excess live in Central America or the United States when they can easily afford to live in Canada?

 

[Bestwifeever]

.... I could afford to live anywhere in the world, but Canada is my home... .

Exactly, it's your home--But Canada has NOT been home to the OP and his parents for a long long time so presumably they enjoy living where they are (as do you, in Canada), and now consider that their home.

There may be reasons for them to return or go to a different country but it doesn't sound like finances is one of them.

 

[ShokWaveRider]

Okay, let's flip it around:

Why would anyone with such excess live in Central America or the United States when they can easily afford to live in Canada?

Because of the winters ONLY (Really that is my only complaint). We lived in Canada for a long time. Left because of the weather mainly, that and I got a Job in California, and I had company sponsored Healthcare. That was hard to resist. Now we have ER'd, we are Seriously considering moving back North if things go pear shaped here. OK throwing another $500k at a home is a little tough, but we would choose that option to live by the West Coast. There are other places, that are not so expensive.

We lived in Ontario and Calgary and visited the Vancouver area of BC regularly. The Healthcare system is fine we certainly had no complaints, and best of all No Paperwork, Deductions, Co-Pays or surprises, and the icing on the cake is, it is basically worry and stress free. You still pay for drugs if you do not have a supplemental insurance package. (Like Medicare Here in the USA). If your condition is minor you may have a wait in some areas, but in all the time we spent there we never did. I had a serious operation and the service was wonderful, 10 days in hospital in downtown Calgary, my room overlooked a reservoir.

It makes me laugh when I hear, Read or talk to people that berate the Canadian healthcare system based on hearsay, when they have no personal experience with it. OK there are some sad stories to every system, but it is leaps and bounds ahead of our pre-retirement system here in the US, but can be compared directly with Medicare. ACA did make some improvements though, but is far from perfect. As it happens it works well or us.

 

[Music Lover]

Because of the winters ONLY (Really that is my only complaint).

I agree about the weather, but my entire social network is here, so I'm staying.

It makes me laugh when I hear, Read or talk to people that berate the Canadian healthcare system based on hearsay, when they have no personal experience with it. OK there are some sad stories to every system, but it is leaps and bounds ahead of our pre-retirement system here in the US, but can be compared directly with Medicare. ACA did make some improvements though, but is far from perfect. As it happens it works well or us.

I also agree. I don't know a single person who would trade our healthcare system for the US system.

 

[MichaelB]

We often find offense when we look for it. People are free to live anywhere they choose, including Canada, Central America, the US, and elsewhere. To state a preference is not to insult or demean the choice of another.

Let's not make this thread about being offended by a stated preference, and let's get back on topic, eh?

 

[Danmar]

Exactly, it's your home--But Canada has NOT been home to the OP and his parents for a long long time so presumably they enjoy living where they are (as do you, in Canada), and now consider that their home.

There may be reasons for them to return or go to a different country but it doesn't sound like finances is one of them.

Ya, I get that. I spend about a third of my time in the US and consider it a home away from home. Nevertheless, the post I am referring to is,
on the face of it at least, insulting to Canadians, in my opinion.

 

[Blue Collar Guy]

I also agree. I don't know a single person who would trade our healthcare system for the US system.

The Canadian Prime minister came to the US for open heart surgery. Danny Williams, premier of Newfoundland and Labrador

 

[Music Lover]

The Canadian Prime minister came to the US for open heart surgery.

I don't know him...

But, I do know a few Canadians who moved to the US that came back to Canada for some medical treatments.