# I'm 30. Lost my father 3 weeks ago and he left me 1M inheritance. Need advice.



## cryptic (Feb 12, 2015)

My father was 51 and died on me with a sudden heart attack...he was a healthy guy who was very active and it has ruined me...

He had a fairly large estate worth several million in which I am his oldest son receiving just a little over 1M from inheritance.


I really have very little experience with money management and I am not in any kind of finance career so I need help...

I suppose I will seek a financial adviser and an accountant but can anyone recommend what they would do if they were in my position?

I'm a single father of a 2 1/2 year old son. I want to make sure he can go to any University he wishes when he becomes of age and hopefully draw some sort of interest to make my living slightly better.


Any good knowledge, books, articles, youtube videos, I can educate myself on so I have a good understanding on how to manage such an inheritance?


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## Guban (Jul 5, 2011)

Sorry for your sudden loss.

I would suggest that you don't do anything too radical any time soon. Especially at a time that you might not be thinking straight, and also not at a time where you don't understand something.

Pay off debts, if applicable. Especially credit card ones.
Stash the rest in a high interest account using a company that is a CIPF member. See: http://www.cipf.ca/homepage.aspx
Read and talk to people. Knowledge will come, but it will come slowly. With such a large amount, you can afford to be conservative and invest slowly.
You should be thinking about a TFSA (flexible) and RESP at least in the short term, both of which won't make much of a dent into the inheritance.


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## Soon Forget (Mar 25, 2014)

Sorry to hear about your loss.

This is from the Bogleheads wiki (a popular American investing forum): http://www.bogleheads.org/wiki/Managing_a_windfall


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## Getafix (Dec 29, 2014)

Sorry to hear about your loss. You certainly came to the right place. I've learned so much from this forum in the past few months. Take your time and browse this forum every day, pretty soon you will have a good idea on how best to preserve and grow your inheritance.


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## GOB (Feb 15, 2011)

Sorry for your loss. Your income, exoenses, job security and risk tolerance are all important factors to identify before being able to decide on the best path forward. For now I would follow the advice above - pay off debts and max out your TFSA with conservatives investments until you decide on a plan.


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## Chris L (Nov 16, 2011)

Give yourself 60 days and sit on it at least. If you have high debt, pay that off, it's a no brainer. You'll need to outline your current financial situation, debts, income, housing, etc. Until you give more details, the answer is unclear.


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## Oldroe (Sep 18, 2009)

I would start with very short term GIC 30 -60 day. In small amounts 5k-10k . And start understanding your financial situation. That's pen and paper. Journal every expense that's Timmy's lotto bills both monthly and yearly bills, clubs, golfing.

Now Planners are mostly thief's and they don't need a licence. Listen if you want but bring the plan back here. Make them tell exactly were the money is going. Then we will rip it to shreds. 

Study and listen.


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## birdman (Feb 12, 2013)

As others have mentioned I suggest you just take your time and not rush into investing. There is lots to learn and by posting onthis site you are off to a good start. I read the new posts that interest me every day and learn from others experience. Suggest you not jump in to the services of a financial planner for some time. After things have settled down you can post again and start learning about things like asset allocation, diversification, couch potatoe investing, foreign investing, RESP's, debts and interest, etc. Just keep learning and posting.


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## fatcat (Nov 11, 2009)

losing a father is tough (assuming you were close) for a son, my condolences

first, you won't see any money for about a year if he had a large estate and there are other beneficiaries

so i would relax and just begin to do research into investing and money management

i agree about paying off debts

simplify your accounts and assets so you can understand them

be honest with yourself about what you can do and can't do in terms of investing and what your interests are

sometimes a good money manager is appropriate and worth the money, sometimes it's better to do it on your own

remember one thing: risk versus reward, there is no free money, anyone who comes along and tells you they have an investment that will pay you 10% (or whatever ridiculous figure they come up with) is probably lying, beware exotic investments, stick with stocks and bonds

good luck, though luck has nothing to do with the grief that will follow after losing your dad, again i am sorry


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## cryptic (Feb 12, 2015)

Thanks for everyones advice and condolences.

This seems like a great forum to be apart of and I will stick around here and lurk gathering in as much information as I can.


I really appreciate all this great advice and will definitely put this all forward moving on.

I hope everyone has a great weekend and valentines.

Expect to see me a little more around here.


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## Islenska (May 4, 2011)

Very sorry for your loss Cryptic, your father left way too early

Take your financial road very slowly but remember you can do it as well as anyone else, enjoy the progress you will have and always something to learn

Remember the good times with your father.


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## HereToHelp (Jan 29, 2015)

Sorry for your loss cryptic!

The advice I would add is to meet with a few planners and advisors with a good reputation in your town. Do not rush or feel rushed to sign up with anyone. An advisor can help you create a great plan for you and educate you along the way. Deal with someone who you are comfortable with and who has good accreditation (CFP, CIM, etc).

Also, based on the dollar figures you are discussing you could possibly be suited for more complex planning (use of Trusts etc).

I agree with paying down any consumer debt, but the rest can wait while you gain education and options.

Best of luck !


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## bds (Aug 13, 2013)

I went through a very similar thing a couple years ago.

As others have said, do not do anything right away. I considered getting right into the stock market with the money but at the last minute decided to try a virtual/fake account to see how I'd do, I lost a lot of (thankfully) fake dollars in that account and learned a lot from it.

Agreed on the debt, if you have any credit card debt, lines of credit, or student loans I'd pay them off right away as you're essentially "earning" whatever the interest rate is on them by paying them off. If you have a mortgage I'd hold off on paying too much to it until you decide what you want to do with the money.

This forum is a wealth of knowledge along with various personal finance blogs. I'd recommend http://www.milliondollarjourney.com to start.

Good luck!


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## uptoolate (Oct 9, 2011)

Soon Forget said:


> Sorry to hear about your loss.
> 
> This is from the Bogleheads wiki (a popular American investing forum): http://www.bogleheads.org/wiki/Managing_a_windfall


Very sorry for your loss. Devastating for you and your son as well. The hardest thing that I ever had to do was tell my son that his poppa had died.

I'd agree with this link and looking and, if you want to, posting on the Bogleheads site. It's a great community full of individuals with a wealth of experience and an honest desire to help others.


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## My Own Advisor (Sep 24, 2012)

frase said:


> As others have mentioned I suggest you just take your time and not rush into investing. There is lots to learn and by posting onthis site you are off to a good start. I read the new posts that interest me every day and learn from others experience. Suggest you not jump in to the services of a financial planner for some time. After things have settled down you can post again and start learning about things like asset allocation, diversification, couch potatoe investing, foreign investing, RESP's, debts and interest, etc. Just keep learning and posting.


+1

My sincere condolences to you.

Simply take your time.


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## SkyFall (Jun 19, 2012)

My condolences...


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## kcowan (Jul 1, 2010)

Cryptic

Your loss will fade with time. I would stash the money at high interest for 2 years. Shop around. There are safe places that will do that for you.

Then spend the time learning about DIY investing, TFSAs, RESPs and RRSPs.
Good luck!


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## HereToHelp (Jan 29, 2015)

kcowan said:


> Cryptic
> 
> Your loss will fade with time. I would stash the money at high interest for 2 years. Shop around. There are safe places that will do that for you.
> 
> ...


I agree you can learn lots on forums but I would be very careful handling this amount of money on your own with little to no experience. Maybe I am biased as a CFP but I believe there is lots to consider and a lot of mistakes one can make in situations like this. 

I fully agree on taking your time and educating yourself. But, what I would suggest is setting up a basic plan once you feel comfortable, and with time possibly controlling more and more of it. I would avoid signing up for anything has any sort of switching costs (DSC'd funds). The common suggestions of RESP, RRSP, TFSA here are great, but only really touch on some of the planning issues you need to consider.

Best of luck!


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## dime (Jun 20, 2013)

cryptic said:


> My father was 51 and died on me with a sudden heart attack...he was a healthy guy who was very active and it has ruined me...


My sympathies.... that is far too young and very unexpected. 



A few thoughts that may be helpful: 

Pay off all your debts: all loans, mortgage, car, tuition etc. End any leasing and build equity by owning a home. 
Then invest the rest for your (and your family) future needs. Try to at least beat inflation and prevent (permanently) losing your investment capital. 
Fully fund and invest your TFSA (and your partner if possible). 

Learn as much as you can over the next few years. There's no one single 'correct' way to invest, and most fund managers are just trying to match the returns of the S&P500. Eventually you'll find out what works best for you. 

Some of the best investing advice I've ever found was the S&P Outlook report provided by my online broker. I try to faithfully download and read it every weekend. There are many excellent regularly published pdf reports which are freely available online from the banks on a weekly and monthly basis. Get a good B&W laser printer, a highlighter, a binder and start reading. I just find it hard to free up enough time! A few examples: 

https://www.raymondjames.ca/en_ca/personal_investing/market_commentary/
http://www.rbcds.com/mmc/mmc.html
https://www.seanfahy.com/markets/weekly_market_strategy/
http://www.td.com/economics/analysis/financial-markets/interest.jsp
http://advisors.tdwaterhouse.ca/public/projectfiles/10a44683-a9f5-4213-8012-869e68ef0c5d.pdf
http://www.investorvillage.com/groups.asp?mb=13685&pt=m&top=1



I'm just guessing, but I'm pretty sure lots of us here on CMF are DIY investors running self directed accounts. But consider shopping around for a reasonably priced asset management service who might charge a reasonable fee annually to get you started off with individualized assistance. That might be a good thread for us to start on CMF: what are the best options out there right now for asset management? 

A difficult part of investing and asset management is coping emotionally when you see significant sums of money being lost due to a falling market or after buying an investment which then proceeds to perform badly despite a rising market. It comes with experience, but sometimes it's not easy to deal with. This can determine your investing style, if you should chose to hire an advisor, asset manager and so on. 

There will be the occasional 'market correction' where the average investment can drop anywhere from 10% to even as much as 50% where it takes 6 years to recover. Even a 10% drop can happen in a few days and for a portfolio of 1M a 10% drop is a large amount of $ to try and mentally fathom your account 'losing'. So you want to be able to sleep soundly at night and not feel too stressed by this. "Drawdown" is normal and part of the whole game. You want to try and reduce the risk to a reasonable level. 
When the market falls significantly over a year during a recession the recovery is a waiting game. Dividends are a good way to get paid to wait. 

Take your time & don't rush into anything you don't feel you understand well enough to spend the money on. When I think back to all the dumb moves I've made over the years... it almost always comes back to this point: did I actually understand what it was I was buying or buy it impulsively and regret it later years down the road? Increasingly I've found that invest smaller amounts at a time helps. I initiate a position with only a 1% or two of the portfolio. 

Diversify. Your job now as a 'wealth manager' is to mitigate that risk through smart money management. Practice diversification by entering a variety of different investments over time and differing (less 'correlated') asset classes. When looking at a 1M portfolio this could seem rather overwhelming. Look at ETF's for your 'core' holdings. Try to go with ETF's that have very low MER fees. 

Stick with quality. My favourite piece of wisdom from a Chinese cookie once said "fortune favours the brave". There's risks with investing that are just part of the game. That being said you need to think like a pension fund manager now. Invest in top quality names that are highly reviewed and rated. Stay away from individual momentum stocks with high PE and beta ratios until you know what you're doing.


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## james4beach (Nov 15, 2012)

Very sorry to hear about your loss.

Don't rush to do anything. Your first step would be to pay off debts.

Next, decide how much risk you want to take with the $1 million. Think of it as a dial that goes from 0 to 100. This is one critical dial to all your money management activities. 0 is no risk (0% equity exposure) and 100 is full risk (100% equity exposure). As you are new to this, your dial should stay close to zero for a while.

One extreme of the scale is "0% equity" where you keep the money entirely in savings accounts and fixed income, like GICs. In this scenario you will not see the value decline below $1 million, but you also won't see it grow much. It would grow by approximately $20,000 a year at current interest rates.

At the other extreme is "100% equity" where it's fully exposed to the stock market. In this scenario, it's possible to see losses -- short term or otherwise -- that reduce the value by 20% or even 50%. Would you be willing to see a $500,000 loss as a trade-off for higher long-term returns? This is an important question to ponder.

People who work in the financial industry (including advisors, mutual fund people etc) are heavily biased towards higher % equity... more risk. So keep this in mind as you read advice, read books, and talk to "professionals". This industry can't make money unless others -- like you -- are willing to take risks with money. This biases everything they tell you.

*I recommend starting your investment adventures with the dial at zero: 0% equity*. Then learn more and feel it out. Once you gain more understanding, move the dial up to 5% (that's still a whopping $50k in the stock market). Don't move too fast. In my opinion your risk dial should stay quite low for a long time. You may even decide that you never want to increase it above 50%.


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## Canadafan (Oct 19, 2014)

My advice is based on your exact question re What to do with more than 1 M in inheritance?

That is a lot of Money, yet at your young age and needs to be respected as it represents the combined efforts of your dad's life earnings.
My advice as follows:
Seek professional aliances with the proper people.
1. A lawyer to advise on any issues surrounding the wrap up of the estate etc.
2. An accountant to advise on the bnest way to deal with the $$ for both income and tax advantages,
3. A professional money manger to ensure you can establish , short , medium and long term goals.

My exact advice ( based on my 35+ years of investing and many examples of self learning etc)...........Visit "RBC Weath mangement", I assume as this is a Candian fourm you are in Canada.
RBC wealth mangement has a $1 million entry level and handle high networth accounts, with a minimal fee structure.
They will provide included Tax, accounting and legal advise.
On the investment side? They manage accounts totalling over $700 Billion, that is not small town stuff.
Their average client is in the net worth range of $3 to $5 million
Point is , they are IMHO one of the best around. Have talk with them at least, that wont cost you anything. Therea re similar services offered by all major banks. 
I totally disagree with coments that "you can do as well as anyone else"....Yes that is 100% true. But why not do better than the average? Take a professional approach and have professionals manage this for you.
My 2 cents for what it is worth.
One last qualifier: I have read , studied and followed investing for over 30+ years. I was on a pesnioln advisory panel and know as much as most about psnions, RRSPs investing etc. I have never been happier since we moved over to having things professionally manged.


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## Guban (Jul 5, 2011)

^ what is RBC Wealth Management's "minimal fee structure"? 

The mainstream philosophy in this forum seems to be that an indexed, couch potato style of portfolio tends to outperform managed money, not necessarily because the picks do better, but because the stock selections do better after deducting for paying for the professionals. So, oddly, by choosing to get an "average" return of the index, you outperform the average investor. Do you disagree with this? Has this been your experience in investing? 

All that having been said, it may be worth the money for the OP. The personalized tax and legal advice may be worth something to him. I can't say that you get what you pay for, since there is some great advice given out here, but sometimes professionals need to be brought into the picture.


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## Canadafan (Oct 19, 2014)

RBC wealth mangement fees are around 1.00% to 1.05% based on protfolio size and assets chosen.
Well bellow most mutual fund fees and variuos advisors etc
They also have no load , back end front end or what ever anyone wants to call them.


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## Eder (Feb 16, 2011)

Best to get/update your will ASAP


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## Brian K (Jan 29, 2011)

Sorry for your loss. Time will help...
I've seen too many go out and spend the inheritance on things like cars and splashy stuff. Good for you for looking for ways to makes something of it and as they say "not P1ss it all away".

I spent years with a 'professionally investment advisor' from RBC and for years wondered why I made more money saving it than my investments were delivering. There always seemed to be reasons why I should buy this or that but not much ever seemed to pay off. 
Then I retired early (yeah a nice package) and went to a Fee for Service financial planner as part of the package. I asked how I could make money to support my self when I hadn't really had any luck with investments to this point. This FP didn't offer any investment services other than to make suggestions/recommendations so I knew she no incentive to 'convince' me to put all the money with her which I really liked. I already had a discount brokerage account with a minimal balance and she suggested about 6 ETF's to buy and avoid all the fees a broker would charge. 5 years later I couldn't be happier. I still have my RBC account with the broker - but I am doing better. I keep that account alive to diversify. Check out the "Couch Potato" investment strategy. Start off slowly, read and learn. Lots to learn on this forum too. 
My 2 cents. Good luck.


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## Cal (Jun 17, 2009)

Sorry for your loss....the best advice right now is to do nothing, take your time to develop your financial plan. Don't be in a rush or feel that you have to do something. Take your time, and soak up as much here as you can.


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## lonewolf (Jun 12, 2012)

Hi, Cryptic sorry to hear about loss

Maybe look to see what your father was doing to be worth that much money & if it fits your personality continue on doing what he was doing. He had to be doing something right to leave that kind of money. There are so many people that have won millions of dollars in lottery & end up blowing it all. Someone up thread said to track all spending to see where money is going. I agree if you are currently spending more then your making your most likely going to blow the money if you first don't learn how to live on less money then your making. If you are unlike most & are not living pay cheque to pay cheque you will most likely know how to stretch the money to get the most out of it. Your ahead of the game if you can live below your means. If you want to get the most out of the money you need to learn how to live below your means. Someone mentioned to stick with bonds & stocks be aware that bonds are just as dangerous as stocks & are in a bigger bubble. Government bonds are often said to be safe but I disagree they are very dangerous they have no assets backing them only over taxed tax payers that will be in no position to be further taxed in a financial crisis where they are losing their jobs. I would stick with GICs from credit unions ( Manitoba online credit unions usually have best rates) I think they are safer then banks in case of a banking crisis, CDIC insurance makes the banks weak for they take greater risk with depositors money & no way will CDIC insurance bail everyone out. In case of a currency crisis I would consider buying a gold annuity through a Swiss insurance company then your retirement income is locked in regardless of what happens to the fiat currencies of the world. As far as stocks James for Beach says it perfectly.


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