A friend just inherited a couple of hundred grand and it's going to be his RRSP in one form or another. He is dyslexic and looking for advice so something / someone with an easy to understand plan. Any recommendations for a guru?
Investment advice
- Thread starter nobbie48
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I'm trying to launch a new porn company ... he can invest in that. Joking aside, I would check past performance of the management in any company you invest in. Also check their Management expense ratio.
It's pretty easy to build a safe investment portfolio by yourself. Just takes a bit of time ...
It's pretty easy to build a safe investment portfolio by yourself. Just takes a bit of time ...
As far as him building it himself I would end up answering a million questions and I don't have the patience. I don't want to get involved other than pointing him in the right direction.
I also dislike giving advice on matters that I can't correct if things go wrong. The 3M's are off limits. Money, marriage and medical.
Considering Trump's bull in a china shop attitude I can't see anything being safe.
sburns
Well-known member
I know a financial planner, who is not one of these sales types who just want to put you into a product. She will review your (their) situation and help you figure out the best strategy for your goal. North York area.
Seeing an accountant is a good option, make sure they are licensed for financial products and hopefully they won't just try to sell you one.
kruzuki
Well-known member
Collectible motorcycles only!
I have a guy in Waterdown I have been dealing with for years. Despite that I still have an index fund I buy on my own and some TFSAs I have outside of him as well.
He needs to get some proper advice. He could always go to a pay for service professional instead of someone who makes their money on commission.
It it were me I would put a certain amount in a RRSP, some in TFSAs and some earmarked for emergency money. However, I am mortgage free. He needs 5o get some advice for one or two professionals. What makes sense for me could be very ill advised for someone else.
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He needs to get some proper advice. He could always go to a pay for service professional instead of someone who makes their money on commission.
It it were me I would put a certain amount in a RRSP, some in TFSAs and some earmarked for emergency money. However, I am mortgage free. He needs 5o get some advice for one or two professionals. What makes sense for me could be very ill advised for someone else.
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There are some very intelligent people on this forum along with the not so bright ones. If you follow the posts you know who is who. All I'm doing is offering my friend a list from which to pick.
Depending on his end goals and that type of stuff....I'd just set up some trade account with a brokerage, and buy some safe / moderate index funds / etfs. I've got my small balance in VGRO currently, and will be moving it to VBAL in a few years as time gets closer to retirement. I just started it so no real growth yet, but it's a long term play.
#1. max out TFSA - free growth!
#2. RRSP - may not make sense depending on tax / age / life situation
#1. max out TFSA - free growth!
#2. RRSP - may not make sense depending on tax / age / life situation
My friends level of understanding is limited. He was confused when the bank wouldn't let him withdraw all of his severance package from a company he had worked for. It took a while for me to get the details but it wasn't a severance but rather a retirement savings plan, hence the hold back. He is very talented in other things but language isn't his strong point. I'd trust him with my life but not if he had to read the instructions.
Please have him read The Wealthy Barber if he has not already. Then The Richest Man In Babylon and some of the other great primer sort of books.
He really needs to get a handle on dangerous things like negative equity etc. I have seen people blow through hundreds of thousands in inheritance in a year or so. If he is smart with that money it will be a nice benefit for him in later years.
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As others have already stated, your friend needs to see a professional. Even a free consult with his bank will help to get him thinking. There are many variables, such as his age, current RRSP contributions/investments. Future plans, current dept, expected return, comfort of risk, etc.
Get an investment adviser to do it. Folks have already posted some leads.
What he "should" do depends on RRSP history (does he have one already? how much contribution room is left? what's his income level and tax bracket, and does it make sense to make an entire RRSP contribution in one shot or should it be spread out over the next few years to make better use of it to reduce high-tax-rate income?), TFSA history (same questions), what his time horizon is, what his risk tolerance is. It sounds like he is not investment savvy, and that means many of what I would consider to be "better" choices are off the table, because he has to understand what it is that he is invested in.
If he has lots of unused RRSP contribution room, I'd be inclined to make a (say) $50,000 RRSP contribution immediately, max out the TFSA immediately, and put the rest in an outside-the-RRSP regular investment account that is invested in a dividend-paying index fund of some sort, and use annual withdrawals from that regular investment account to make annual (say) $50,000 RRSP contributions and continue maxing out the TFSA contributions over the next few years until either the regular investment account is finished or until he runs out of RRSP contribution room from previous years - and if the latter happens, just back off the RRSP contributions to the annual maximums. This makes better use of the RRSP contributions to deduct income from the highest tax bracket in each year.
A meeting with an investment adviser to get this strategy started and crunch the numbers to find optimum amounts to contribute, and then an annual meeting to continue it, is highly recommended. Make sure he has tax returns available from the last couple of years.
What he "should" do depends on RRSP history (does he have one already? how much contribution room is left? what's his income level and tax bracket, and does it make sense to make an entire RRSP contribution in one shot or should it be spread out over the next few years to make better use of it to reduce high-tax-rate income?), TFSA history (same questions), what his time horizon is, what his risk tolerance is. It sounds like he is not investment savvy, and that means many of what I would consider to be "better" choices are off the table, because he has to understand what it is that he is invested in.
If he has lots of unused RRSP contribution room, I'd be inclined to make a (say) $50,000 RRSP contribution immediately, max out the TFSA immediately, and put the rest in an outside-the-RRSP regular investment account that is invested in a dividend-paying index fund of some sort, and use annual withdrawals from that regular investment account to make annual (say) $50,000 RRSP contributions and continue maxing out the TFSA contributions over the next few years until either the regular investment account is finished or until he runs out of RRSP contribution room from previous years - and if the latter happens, just back off the RRSP contributions to the annual maximums. This makes better use of the RRSP contributions to deduct income from the highest tax bracket in each year.
A meeting with an investment adviser to get this strategy started and crunch the numbers to find optimum amounts to contribute, and then an annual meeting to continue it, is highly recommended. Make sure he has tax returns available from the last couple of years.
