Does having an inheritance change your strategy?

Discussion in 'Investment Strategy' started by Des, 20th Jan, 2020.

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  1. Des

    Des Well-Known Member

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    Wondering if you would do things differently if you knew one day, hopefully not until you’re in your 60s or later, you were going to inherit enough investment properties and shares to live off? Did a search and didn’t find much came up on the forum so I hope it’s ok if I ask.
    We have never thought about inheritance and want to make our own way in the world anyway. Although more recently with having a child, limited income and some decisions that may involve sacrificing now for the long term it has come up from the parents that it’s something we should keep in mind in our decision making. I’m starting to wonder if there is an investment strategy that would be more helpful for us in the short term while we are under some financial stress, like investing in shares that pay high dividends rather than for growth?
    I know lots of people are in this situation and I wonder if it’s actually been a factor in any of your decisions?
     
    Last edited by a moderator: 29th Mar, 2020
  2. Trainee

    Trainee Well-Known Member

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    Its not guaranteed though. Maybe retirement homes will cost a lot. Maybe the older person lives to 100. Maybe they remarry. Or whatever.
     
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  3. Archaon

    Archaon Well-Known Member

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    The future isn't guaranteed, I would never rely on anything other than my own grit.

    If it eventually happened I'd see it as a boon and probably set up for my children etc.
     
  4. Trainee

    Trainee Well-Known Member

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    If the relationship is good enough, ask the parents to see a good lawyer to talk about estate planning. A testamentary trust with a decent amount in it, if you have kids and grandchildren etc can be a huge benefit.

    often conservative parents just have a eveything evenly to my kids sort of will.
     
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  5. Beano

    Beano Well-Known Member

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    Many wealthy people like Warren Buffet have stated they will not pass their wealth on to the next generation.
     
  6. Des

    Des Well-Known Member

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    True, but in this case they are specifically telling us they have worked hard to build wealth for their children and we should be keeping that in mind in our decision making.
     
  7. Des

    Des Well-Known Member

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    I haven’t heard of this but they are quite conservative and yes you’re right, they plan evenly to the kids type of will.
     
  8. Des

    Des Well-Known Member

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    I’m quite sure they will live to 100! :D
     
  9. MTR

    MTR Well-Known Member

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    you still need purpose and goals

    As far as investing goes..... Do what you can afford today and just keep Chipping away.
     
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  10. Trainee

    Trainee Well-Known Member

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    Some families do early inheritance by helping with home deposits etc
     
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  11. NHG

    NHG Well-Known Member

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    I was raised told I would get nothing.

    Once I was established I was told there was something.

    Family isn't wealthy, but they have a couple of quality Sydney properties unencumbered.

    Thoughts:

    1. They can live to 100+ as stated above (would be awesome for their grandkids to meet my parents). I've heard stories of people hoping the parents die soon so they can enjoy their family money. Can't think of anything worse.

    2. They get sick. A family member had a health scare a handful of years ago. That could have turned into liquidating everything for treatment.

    3. They may loose it all. I know a family who helped their son establish himself. His last development was a dud and it cost them their home and retirement.

    4. I've seen this 3 times now. Family ends up in court over inheritance. Couples in their 60s, last few years went from looking at beach houses, to looking at court documents. They are constantly negative as their quality of life is far from what they imagined.

    5. Your kids will see how you did it and replicate. Do you want the above to happen to you?

    6. If you don't develop the skills, it won't last long. If you live till 100+, and are use to living outside of your means, inheritance will send you spiraling. Your kids will likely mimic and have no inheritance to fall back on.

    7. Combination of the above. Because all good things come in 3's.

    8. Honestly? It feels SO DAMN GOOD to do it yourself. For me the ineritance is irrelevant. If my fam wants to donate every sent to pigeon feed, I'll applaud them. I don't feel controlled by their dreams or desires for me, I can basically do what I want within my own means and am super grateful for the skills I've learnt in the meantime.

    9. When you develop the skills to be independently wealthy, you can leverage the inheritance and build on it for the next generation. Or buy copious amounts of pigeon feed.

    Bonus: The above also doesn't cover them, or you getting divorced. You won't get anything if it's you, and your partner hasn't inherited anything yet.
     
    Last edited: 20th Jan, 2020
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  12. Trainee

    Trainee Well-Known Member

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    if the amount is significant, and these days 7 figures is common with ppor... it may be worth getting a lawyer to do a proper will even if it costs a couple thousand dollars.

    however this requires a high level of trust if the parents dont understand the benefits and think lawyers are sharks. Helps if this is guided by a trusted family member who is knowledgeable about tax and estate planning.
     
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  13. MTR

    MTR Well-Known Member

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    Well said
     
  14. hammer

    hammer Well-Known Member

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    My late father did this.

    He knew he was going to get a huge windfall so he did nothing. No saving or investing. No learning. Instead he had a wonderful time with his friends and just waited.

    And waited.

    And waited....

    Once the time did come it took him 5 years to blow it all because he hadn't developed any skills to invest and keep the wealth.

    Anyway the moral of the story is don't factor it in.

    Forget about it if you can.

    If and when it does come...treat it as a bonus, nothing more, because the skills and behaviours you develop investing under your own steam is where the real power is.
     
  15. Sackie

    Sackie Well-Known Member

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    Inheritance IS the plan. I'm just messin with a couple of houses here and there in the mean time.
     
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  16. Des

    Des Well-Known Member

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    Great
    :D love it!
     
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  17. Des

    Des Well-Known Member

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    What is significant? To me 5 figures would be significant haha. Thanks for the tip. Not sure if they looked into tax implications etc but they are successful business people and possibly have, in any case it wouldn’t be appropriate for me as a ring in to suggest anything like that.
     
    Last edited by a moderator: 29th Mar, 2020
  18. willair

    willair Well-Known Member Premium Member

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    If you think they have the gas in the tank to go too 100,then there is a 99%probability that you may well have to pay for them??..

    That's what happens from what i have seen,so you have a selection of strategies in front of you ..

    Make your own luck..
     
    Last edited by a moderator: 29th Mar, 2020
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  19. MTR

    MTR Well-Known Member

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    I would hate my kids to sit back waiting for me to drop off the perch....

    This is not about Des, just thinking about my kids, you can create monsters.... parents should not tell their kids what they are likely to inherit.
    They can become self entitled ratbags

    teach them how to make money so they understand its not a walk in the park and this way they grow and have purpose

    nuff of my rant sorry
     
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  20. Scott No Mates

    Scott No Mates Well-Known Member

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    Totally agree, learn from those closest to you (if they're successful). Anything you get from snow inheritance is just a bonus.

    Many things change during a lifetime and partners is just one of them. I've seen plenty where best of intentions have changed when a new spouse is in the picture and the surviving parent passes leaving zip to adult children from a previous relationship.

    Don't count your chickens until they hatch.
     
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