At age of 70 parents ask for financial advice....
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Thread: At age of 70 parents ask for financial advice....

  1. #1
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    At age of 70 parents ask for financial advice....

    Hi all,

    This is my first time posting here. So when I was in my early 20's my Dad freaked out on me for not wanting a real job... I told him I wanted to invest and of course he said get a real job and by that he meant an office job. I've never been one for 9-5's and while I tried it out, it never quite agreed with me. Now I work in the film and ent biz and invest. After that convo with my Dad in my 20's I never shared any info about where I worked, or financial info although I guess he knows that I'm an avid investor.

    So in their early 70's, my Mom and dad have asked me for financial advice about stocks etc b/c they aren't happy with how their mutual funds are doing. They want my advice. Part of me is terrified b/c in my mind I'm thinking you guys are getting older and I thought you had it together, this is no time to be tinkering around. I have two much older brothers that they usually ask for stuff. I also don't want them sniffing into my business as I live my life very discreetly.

    I also found out that my grandmother is going to be experiencing a financial shortfall paying for her retirement residence, and perhaps this may have put my parents into panic mode. Keep in mind they never share anything of this type of stuff with me as I'm the youngest.

    Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?


  2. #2
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    Assuming that someone knows anything about finances just because they are older is a big mistake.

    Also depending on timing of investing many people rode a lot of lucky timing to a lot of success. I had one elderly relative who invested almost completely in fixed income for her whole life, but because the interest rates were so high particularly in her later working and early retirement years it worked out awesome for her.

    Same as the fact your parents may have done just fine in mutual fund products because the markets have generally done well if you've had money in them for decades.

    With my in-laws we had to more or less completely take over their finances when they were in their 60's. They were in a situation of massive consumer debt and 0 retirement savings that they had kept to themselves. We helped them get out of the debt and a little bit of savings going into retirement. They are still in a bad financial state, but it would have been much worse if we hadn't intervened.

    So if they reached out and asked for your help, take a look, give them some thoughts, they may or may not take your advice, don't be offended if they don't.

  3. #3
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    I lived a fairly similar life, but it was more the inlaws that were the problem.

    My inlaws think of themselves as "investors", but to them that meant buying mutual funds recommended to them by a broker. They also once bought an apartment block, but sold it soon after.

    I turned to investing as a means of survival, so I needed to become much more educated than they were.

    Personally, I'd steer clear of any specific advice. General information, giving resources, etc. is probably the way to go. Finances, like politics, are not a good family topics.

    Over the years I never bring up finances but every once in a while something may slip out (I won't avoid the topic, just keep my answers short usually). I don't like how I feel after a conversation (part of it is I know a lot more than they do and part of it is the way family tends to treat people).

    If they want real advice or opinions I'd give it, but most of the time people aren't really looking for information, they are either looking for someone to do it for them, or looking for ammunition to attack your way of life. I find that the younger family members (nieces and nephews) are the ones who may really be interested and I'll give them any help I can if they want, but siblings and parents aren't really interested for financial reasons.

    Truth is, when you're in your 70's you should be treading water, not jumping in the deep end. I haven't got a clue as to what one could recommend to them in the first place. Be honest with them, but don't get sucked in.

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  5. #4
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    I never ever gave my parents financial advice because they never asked for it, nor did they ever discuss it except the odd 'bragging' comment now and then about how well they were doing after they sold the ranch and put the proceeds into a variety of things (as I found out later dealing with father's estate). They actually didn't do too bad as it turns out.

    We don't have a lot to go on here... i.e. relationship between your parents and your other siblings "that they ask for stuff" is meaningless to us. Does that mean your parents have asked them for financial advice? If so, how has that worked out?

    Do you know if your parents strictly have their mutual funds at the bank? A full service brokerage advisor? Do you know what mutual funds they are in?

    One thing I can say for sure is that now (in their '70s) is NOT the time for them to move to individual stocks and I think as a minimum, you should tell them that.. BUT at the same time it would be appropriate to ask why they think that? What do they think that will acheive for them? It is what I would do with my parents had they asked. There is no way I can see to go further. If they are not forthcoming with more info, I'd perhaps point them to reading parts of www.finiki.org (particularly Investment Management and Retirement Planning) to organize their thoughts on possible changes.

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    Our family believes in transparency with each other's well beings. we arent in competition as we believe if that we will all benefit if we help each other out. this is why a lot of our financial decisions are discussed as a family - so yes i do give advice to parents based on research that I have either done myself or experience or simply just through talking things out. Furthermore, any reports read from newspapers etc that could potentially lead to a tip on a stock or even when earnings reports and what it might look like is always discussed. I remember when SHOMI was going under and being replaced with netflix subscriptions at a time where netflix was lagging due to summer time low subscriber numbers. As soon as the last quarter results came out the stock shot from 87$ to over 100 and is now sitting at $160.

    E.G, dad had around 1 mill with an IA from Nesbitt Burns. Long story short the performance just wasn't there even though there has been some stellar performance in the index. Not only was he NOT posting returns of >5%. He had purchased some growth stocks on margin (which the purpose was to generate an income to deduct the margin interest on) on top of a 1% of AUM this guy basically was just leaching money. We discussed it over and over again, ran numbers, and couldn't justify keeping the money with this character. Long story short, dad dropped him and is managing himself. I wish he had done this earlier and used that 1 mill to invest into more real estate in the GTA but wishful thinking hehe.

    we also talk alot about retirement planning and how to utilize our corporation and what not. its a good habit to get in to and it also gets you in the mindset of thinking ahead as well.

    the way I see it is that you are acting in the best interest as one day those funds could be transferred to you - and you sure as better hell know what to do with it.

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    Red, I don't see how the OP can create anything remotely close to your kind of situation out of what the OP's situation is. It takes decades, if not generations, to develop that kind of transparency. My father would hae told me to 'go saw lumber' had I wanted to dig into his financial affairs. After all, he knew best, right?

    What we need is to understand a bit better some specifics of the OP's situation and find out where he can 'tread lightly' and how much and in what depth. Are the parents willing to open the books and show the OP where they are at?

  8. #7
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    Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?

    Yes, but only when they ask.

    They know about my blog and my interest in personal finance and investing but they don't ask too many questions.

    I always find it interesting I'm trying to get out of debt (mortgage left, maybe done in 5 years?) and they have the same amount of debt (mortgage, lines of credit, car payments, etc.). They are approaching age 70.

    I'm not yet terrified about their money situation... but they are getting older and we certainly have different views on money and how it is managed.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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    My dad would spout off that his buddy said rrsp are a waste of time blab blab. I would just tell him his buddy was wrong. I'm my parents case.

  10. #9
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    Black Wizard, Only you can decide how to respond to your parent's request. It sounds unexpected from your description of the family dynamics. This suggests they have realized there may be an issue with their investments and/or they have unrealistic expectations of what they should be able to earn from their investments. Perhaps as you noted, the light went on because of Grma's situation.

    I would say it is entirely acceptable for you to say 'sorry I don't have any investment suggestions'.

    If on the other hand you choose to get involved, I would suggest it is a tall order if it is to be done well:
    They and you have to be prepared for an 'all or nothing' involvement - you will need to understand their full financial picture - account types, assets, debts, investments, pension income, spending, etc.
    You will need to be familiar with the nuances of retirement income (CPP/OAS/GIS, pension credit, etc.).
    You need to be familiar with the types of investments that are suitable for their situation, plans and age.
    It may be that they are in good shape for the future and just need that reassurance, but I don't think you can do them any good by just suggesting they put some money into stock A or fund B.
    Age 70 is not when they should be looking for off-the-cuff investment advice.

    It is possible that your older siblings would see such involvement as meddling or trying to get closer to their money.

    Is it possible that Grma's situation can be used as a catalyst for all of you to sit down and discuss Mom & Dad's finances and future living plans? Is their current house - stairs, washroom - amenable to a walker in the future, etc. If not, where would they live...
    I believe it is very unusual for families to want to discuss this, probably more so given your description, and certainly at the relatively young age of 70.

    My parents sold the acreage and moved into a new 4-level split in the city when they were 70 and were fine there for another 10-12 years. At that time they didn't ask for our advise and we didn't offer any. It is only in their mid-80's that the wheels have fallen off entirely and I now look after all of their financial affairs under a POA.

    So recognize that there may come a time in the future when your parents finances and living situation do become an issue. At that time, at least some of the children will be expected to help find a solution. In my experience, for a variety of reasons, some children will be involved and some not.

    Good luck.

  11. #10
    Senior Member kcowan's Avatar
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    I had success managing MILs portfolio after I retired for 5 years but she asked. It is a long story but I would never have done if she had not asked!


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