Mother In Law - 60, divorced, sitting on $200K in cash

Discussion in 'Share Investing Strategies, Theories & Education' started by Mike Johnson, 17th Jan, 2018.

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  1. Mike Johnson

    Mike Johnson New Member

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    Hi,

    My future mother in law is 60, she divorced 6 years ago, and received $200K in cash in the divorce, which she wants instant access to at the moment (but doesnt really need it), so it is in a savings account, she also receives $5K / month in on going support from her x husband, and will do until she retires, and will receive 1/2 of her x's super when she retires, her share of which is about $600K. She currently rents a house, and does not have any other assets.

    I am encouraging her to go and see an adviser, as she thinks she has no options at the moment, as she is too old to buy property, and she just needs to keep the $200K to live on on top of her pension.

    I think she has lots of options, as a base line if she only keeps the $200K in cash for 10 years, it will go backwards, even if she wants to be low risk, and I have read about buying property in super, buying % of properties, or simply investing in low risk bonds / investments.

    Any experience of this situation, and options for her?
     
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  2. twisted strategies

    twisted strategies Well-Known Member

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    welcome to InvestChat ,

    is there any advantage to switching to a 'holding account ' cash 'at call' but should be a slightly better interest rate .

    the temptation is the laugh at her desire for instant access to the cash , but golly gee , some of those females have razor sharp instincts ..

    you probably need to read the fine print on the divorce settlement ( some can be really tricky )

    probably the next stop should be a thorough health check ... now say $100K for a modest house ( NOT a unit ) in a rural area ( cash up front ) might be possible in the near future BUT that would depend on her health ( for it , that is wise or not )

    things to check is the shifting retirement age ( will she get to 'the magic age ' and if so when ) the Bank Deposit Guarantee ( it used to be $250K per ADI but i am out of date , i would rather the cash working )

    NEXT once she gets to retirement how does she go with the assets test ( sometimes 'cash-rich is not the best option she might have )

    she sounds nervous or cautious .. would better returns that ruin her sleep be better ( i think not )

    the BIG PROBLEM currently is excessive risk (everywhere ) compared to the returns ..available .. there just aren't many sensible ( relatively safe ) places to park cash ( until the economy corrects or crashes . .. at least then everyone will be nervous and cautious )

    i suggest aiming for a happy ( future ) mother-in-law is top priority ( your wife worrying about her mum is no picnic for either of you )

    there is a big chance the world economy will change in the next two years ... would the ability to adapt be so bad ???
     
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  3. Hodor

    Hodor Well-Known Member

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    She needs to speak to an adviser about her options.

    Can't beat super as an investment vehicle tax wise

    Property might be an option, where does she want to buy? Might be tough in an expensive market.
     
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  4. Martin73

    Martin73 Well-Known Member

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    Agree with the suggestions about speaking to an adviser, lots of options available. Not advice but my suggestions for additional research would be:
    Protect her from online scammers, gold diggers etc etc. She could lower her monthly ongoing costs by house sharing, taking in a board, ensuring that she is in an energy efficient house.
     
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  5. twisted strategies

    twisted strategies Well-Known Member

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    might i inject and extra hint of caution on the house sharing ,

    one estate i inherited , did that and the boarder passed away ( apparently without any suspicious circumstances ) somehow the estate i inherited had the combined memorabilia of both ...

    ( ' memorabilia ' is a deliberate pun ) the trio of sorters ( two very trusted friends and i ,) may never get rid of the questions that little exercise raised

    ( sometimes there are secrets in those closets . and we may may have even found 90% of them )
     
  6. Gockie

    Gockie Life is good ☺️ Premium Member

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    Can you further explain sorry? I can't quite understand.
     
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  7. twisted strategies

    twisted strategies Well-Known Member

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    nope,
    but three government departments had the opportunity to safeguard any of their property and couldn't be bothered ( and the Public Trustee sold the house , so who knows what i missed removing )

    seems the rellie and boarder may have had an unusual relationship ( and nothing to do with a bedroom )

    there are still several questions i may never find an answer to ;

    it doesn't ring alarm bells until you put the two careers together
     
  8. Martin73

    Martin73 Well-Known Member

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    @Gockie I think what @twisted strategies is referring to is that:
    1. People don't plan to die unexpectedly; and
    2. Sometimes people have lots of secrets which are only revealed after their passing.

    I used to do a lot of deceased estate auctions and what you would find in some people's cupboards etc would make a nun blush.
     
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  9. twisted strategies

    twisted strategies Well-Known Member

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    the relative didn't die unexpectedly , but did lose the ability to control their affairs ( and was unwillingly to impart some of the extra knowledge needed .

    and me being the black sheep who spent a lot of time out of communication with the entire family , had little more knowledge than the average ( family ) outsider

    in fact not only do i not know how the boarder died but was unaware of the passing from several years ( not that it mattered in that decade ... but later i had to make decisions on what to store and what to destroy ..... things got complicated )

    the only thing i have sold for that estate is the QAN shares ( but kept the rest intact )

    anyway it is just a tiny caution on boarders ( and others sharing a house ) surely such a mix wouldn't happen to Mike's future mother-in-law ,