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Helping the old man.

May 3rd, 2016 at 05:08 pm

For the first time in many years, I took off work early to help my parents set up their retirement nest eggs. This event is highly peculiar, if not shocking, because my dad is typically a proud, self-made man. In fact, I can't even recall when was the last time he ever asked ME for help with anything. And yet, this time, he did.

Ok, but in order to do so, I politely pushed and explained to them that I would need to know their full financial picture. You see, up until this week, their financial picture has always been an enigma wrapped in a mystery. I knew they were doing OK, but they never really talked about it... at all... merely pushing such values as hard work and financial modesty.

While I do cherish those values as well, I have also warned them repeatedly that it takes quite a bit more money than most typically realizes to retire safely. In fact, I've personally spent years ruminating how I would go about affording them a decent nursing home or if I need to move in with them some day to help out with some of the assisted living stuff.

So, I guess now comes the next shocker. Turns out my parents are millionaires. Not like super duper millionaires or anything, but somewhere between 1 and 2 mil. Ok then! I guess I can now breathe a sigh of relief.

Well, I mean things can still go wrong at this point, so I guess this is where I come in. They asked me to take a look at their portfolio and asked me if any changes were needed... and changes were needed indeed! Their portfolio read more like an individual with an over-active case of bi-polar disorder.

For example, who in the world has $250k+ in a checking account for no good reason? I mean it's barely even making any interest at all. On the other end, they have an unhealthily over-weighted positions in physical real estate that will need to be sorted out as well. Also, they are resistant to change. "What is a bond fund? Why can't I just put all my money into this annuity that this nice company lady said I can do?" Insert facepalm here.

In any case, they were so thankful for some reason that they treated me to a steak dinner...which was pretty darn delicious I must admit. Still though, I think the biggest compliment was that they actually trusted me enough to have me help them plan for their future. I had a really nice day.

8 Responses to “Helping the old man.”

  1. FrugalTexan75 Says:

    Good to see you! Smile
    That is a pretty good compliment that your parents trusted you enough to let you into their financial picture.

  2. creditcardfree Says:

    I bet you are both relieved. You know on some level they will be okay. And they feel a bit better about their portfolio.

  3. Joan.of.the.Arch Says:

    Your parents have a fine, smart son, and they know it. Wink

  4. CB in the City Says:

    Nice to get a good surprise about their net worth!

  5. Liz Says:

    My mom has started getting involved in her parents' finances in the last few years (parents are in their mid/late 80's, and aren't in great health). For some reason, they have kept their finances separate for over 60 years of marriage - hey whatever works. They each have over 300k+ in basic checking accounts - they simplified their portfolios several years ago but I think they went too far!

  6. Ima saver Says:

    That is great that they asked you for help and also that they are doing so well. I do not keep any money in checking (except to pay bills) but I do probably keep too much in savings instead of in a mutual fund. I only earn 1% in savings.

  7. LivingAlmostLarge Says:

    Nice! Great job parents!

  8. Tabs Says:

    Hey hey gang! Good to see you guys again. Doing well I hope.

    Liz, your parents sound like mine, though granted, mine are only about to retire in their mid 60's and in great health. Being in the 80's and not in great health is a different matter. In that case, I think having a fairly large percentage in liquid is understandable.... But that said, I also agree that it is still too much to have everything be sitting in a checking account.

    Ima, bond funds right now a great idea because Fed interest rate remain abnormally low. I think Janet Yellen is right to be keeping a very cautious, conservative eye on the economy. As such, bond funds are still on sale right now!

    Quality index bond funds are also the very beating heart of John Bogle's financial crusade. Now, even though no one ever knows the future or how the markets will play out, we DO know that the Fed interest rate are currently at a historic low, and I am extremely certain it will only increase in time from here on out.

    My own largest % allocation is in index bond funds, and though the past does not define the future, my fund's year to date for 2016 is 3.05% with an additional 2.34% in dividend yield. All that for less than 0.2% in expense ratio. You can't beat that with any savings account. Have I mentioned that this fund will only get better and better as interest rates rise?

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