Would appreciate some investment advice

Hi,

I’m in my early 60s and I own my home. I also recently acquired 3 million dollars cash (property sale).

I have no idea how to invest the cash or where to even start.

I feel more comfortable with property than shares (simply because of the lower risk).

I want the cash to grow so that I can live the rest of my life comfortably and help my four children retire early.

Could someone please advise me on:

a) Who I need to speak to in order to ensure I invest the cash appropriately? I understand that there will be financial, legal and tax aspects relating to my investments, so who is the best person to deal with all of that? Do I need a financial advisor? How do I find someone I trust?

b) What sort of time-frame should I be looking at to invest the cash appropriately? I keep reading that now is not the best time to buy property as house prices will likely drop considerably more due to the effects of Corona.

c) Any investing advice?

d) What books/websites would be helpful for me to start learning about investing (property in particular)? I am not business-minded, but I don't want to be clueless when it comes to investing this amount of cash.


Thanks in advance.

 

Talk to a good lawyer about a good will for tax efficiency especially if there are grandchildren, and asset protection for your heirs.

 

Not legal or tax advice.

If I were you, I would buy 4 properties worth 2 million altogether (in different states if possible to avoid land tax)
Lease it and live off rent.
Put each child as a beneficiary, if something to happen to you.
Make as much super contribution as possible.
Keep 200-300k in the bank for any emergency.
Invest rest in ETFs.

That's me. Again, I have absolutely no clue on tax impact.

 

Welcome to the forum and congratulations on your sale! You’re at the point most new investors aspire to be

You have a couple of choices here - learn the nuts and bolts of successful investing yourself, and take control of the process yourself while managing your team...

Or outsourcing the whole lot and trusting your pro’s while you relax and enjoy life.

Personally, I’d go for the learn the nuts and bolts - it’s gonna stop you being taken for a ride, first thing, but it’s also going to allow you to have knowledgeable conversations with the team you’ve got around you - and help you recognise the real pro’s compared to the ones just out to do their own thing.

You will definitely need tax advice, and legal as to structure - but getting SUPER clear on what you want the end result of your investing to look like is paramount. ONce you have that vision in place, your team can help you achieve it.

 

Definitely seek both legal & financial advice tailored to your situation. Your accountant may be able to refer or recommend an independent financial planner (someone you will need to pay to create & review a plan for you)

You haven't mentioned whether you're still working or meet the work test for contributions to super (you may be able to roll over some of the sale proceeds but will require specific advice).

Being in your 60's, there's still another 20 odd years to fund your retirement so you need to consider short, medium and long term investments (10 years +).

The value of each investment class will vary over this period so be prepared for some fluctuations and instability.

Read up on the different types of investments available and the risks of each class and how they react when there's an issue in the economy (like now). This will help you to assess the plan put forward by your planner. (Seek a second opinion if need be and compare for piece of mind).

 

Thanks, will do, once we find a good lawyer.

 

Thank you -I will look into the suggestions you made.

 

Hi,

Thanks!

I will learn the nuts and bolts as best I can. I will also get my children to start doing some research. My biggest fear is being taken for a ride.

I think the hard part is going to be finding a trustworthy team.

 

Hi,

I am now retired and I have very little in super. I have had a significant amount in super previously but it didn't perform well at all. I think I would prefer to invest my money in property than in super.

Could you please explain what you mean by rolling some of the sale proceeds into super?

Thanks.

 

There are a multitude of different ways you could proceed. You might be able to do some or all of the following:

Lend deposits to children to buy properties in their name - could be interest free or at interest with the interest helping them negative gear and you generate an income.

Set up one or more companies and trusts and lend money to them to invest. This could generate income and capital gains which could then be flexibily distributed - first to yourself and later to the kids. The money lent is still yours and can pass via your estate.

Invest in your own name and leave the assets to your children. But no flexibility in distributing income until after death.

Consider setting up a will with a separate testamentary discretionary trust per child.

 

Super is not an investment but an ownership structure.

You could contribute to super and buy property in super with the income taxed at 15% and capital gains 10% with both possibly being 0%.

Advice should be sought as there are a lot of tax and estate planning advantages.

 

Hi,

Thanks very much for both your messages and advice.

I have spoken to a financial advisor but I'm not sold on their role yet. I prefer someone who can do everything. Can you do everything? Are you based in Melbourne? If not, can you recommend someone for me to speak to?

I'm grateful for your suggestions but I don't really understand what they mean (I understand the general concept but not the details). I would like to work with someone who will take the time to make suggestions and explain everything in simple language that I can understand.

Thanks.

 

I don't offer investment advice or suggest what people invest in, I only advise on how to structure ownership and funding once they have decided - or even before! And the estate planning and asset protection implications as well as tax aspects.

Don't think you will find someone who would 'do' everything.

 

Ok, thanks.

So aside from someone with your skills, who else would I need?