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TOPIC: How would you invest $1 million?
#17110
How would you invest $1 million? 2 Years, 6 Months ago Karma: 2
Hi Guys,
My 92 year old Mother-in-law recently sold her house in Toronto for almost $1 million. As she is in a home and is no longer mentally capable of looking after her affairs, my wife and her brother are responsible for making all economic decisions on her behalf. I should add that she is in failing health and we don't expect her to live any longer than another 1-2 years at the most. When she passes, most of this money will go to my wife and her brother.

Currently, all of this money is sitting in cash in her bank account. The financial planner that my Mother-in-law had been using for many years has met with my wife & her brother. He has suggested the typical basket of GIC's, and mutual funds. My wife is fully on board with the wisdom of investing in gold & silver as we have been doing it for several years. She gets the whole inflation thing and the ability of PM's to provide some protection.

My thoughts are to keep perhaps 10-20% in cash, invest 20-30% in gold/silver perhaps via CEF, GTU, and/or SBT. What about some short & long term GIC's? Dividend paying blue chip stocks? Commodity based ETF's or mutual funds, Sprott, etc?

I am sure that some of you may have already come across this situation as we boomers continue to age and come into a bit of money from our parents.

I appreciate any and all suggestions. Thanks guys!

Jeff
jgfergus
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Last Edit: 2012/03/29 08:47 By jgfergus.Reason: additional comment
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#17111
Re: How would you invest $1 million? 2 Years, 6 Months ago Karma: 17
First thing that comes to my mind if you spend 40->80% of that on physical bullion is where the heck do you store it? I think most (of us) agree it will "retain its wealth" over the long run, but then you have a storage issue.

My mining stocks performance are dismal and I'd have to guess those are being shorted/manipulated via algos just like the paper Au & Ag markets. Here's some recent paper PM manipulation stuff I found on Gata:

Long report on Mineweb:
www.mineweb.com/mineweb/view/mineweb/en/...etail&pid=110649

Yea, even Chris:
www.chrismartenson.com/blog/gold-manipulated-thats-okay/72892

I guess you could get one of those big, heavy gun cases and bolt it to your house somewhere, but that doesn't stop some psycho from holding a gun to your wife's head and telling you to open the safe? You can bury it, but there are things called metal detectors. Maybe someone else has some thoughts on storage (w/o tipping their hand)?

Other thoughts are you know, the first things that will be valuable: water, food and warm shelter? I would think about moving closer to the Equator (but where?). Sure would be nice to eat seafood and coconuts vs. just trying to keep the house warm at the higher latitudes.

I'm not in your boat at the moment, but it is a possibility as my folks grow older, so overall I am interested in other's thoughts on this as well.
Samak
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#17112
Re: How would you invest $1 million? 2 Years, 6 Months ago Karma: 262
jgfergus wrote:
Hi Guys,
My 92 year old Mother-in-law recently sold her house in Toronto for almost $1 million. As she is in a home and is no longer mentally capable of looking after her affairs, my wife and her brother are responsible for making all economic decisions on her behalf. I should add that she is in failing health and we don't expect her to live any longer than another 1-2 years at the most. When she passes, most of this money will go to my wife and her brother.

Currently, all of this money is sitting in cash in her bank account. The financial planner that my Mother-in-law had been using for many years has met with my wife & her brother. He has suggested the typical basket of GIC's, and mutual funds. My wife is fully on board with the wisdom of investing in gold & silver as we have been doing it for several years. She gets the whole inflation thing and the ability of PM's to provide some protection.

My thoughts are to keep perhaps 10-20% in cash, invest 20-30% in gold/silver perhaps via CEF, GTU, and/or SBT. What about some short & long term GIC's? Dividend paying blue chip stocks? Commodity based ETF's or mutual funds, Sprott, etc?

I am sure that some of you may have already come across this situation as we boomers continue to age and come into a bit of money from our parents.

I appreciate any and all suggestions. Thanks guys!

Jeff


Hi JG.

First of all, let's focus on WHAT people need to be protecting themselves from the MOST when it comes to investing/sheltering wealth: our THIEVING governments. We already have seen governments seizing pension fund assets. And with MF Global, we saw the Banking Vampires STEALING "cash" right out of peoples' accounts.

Obviously we start with the FIRST principle that we should AVOID many/most paper investments AND avoid holding significant amounts of cash.

This is reinforced by the TRUTH concerning inflation. IF you are one of those people who EAT FOOD every day, then you know that inflation in the real world is 10+% per year - not 2+%.



Thus with ANY paper asset which does not appreciate by more than 10% per year, you're GUARANTEED to lose money. Thus EVERY GIC is nothing but a banker THEFT-SCHEME. Bonds are even WORSE (if you're talking about U.S. Treasuries) since they are RIDICULOUSLY overvalued - AND the paper they're denominated in is guaranteed to lose 10+% per year.

Similarly, dividend-paying "blue chip" stocks will (mostly) just be a means of slowly turning a large pile of wealth into a small pile of wealth.

At the same time, with BOTH gold- and silver-confiscation a part of (U.S.) history, we can't overlook the fact that our governments MIGHT try to steal our bullion too.
Even storing bullion OUTSIDE the country might not be safe - as any other country sympathetic to the our government(s) could seize/freeze any such holdings.

Thus PERSONALLY holding our bullion appears to be the least-worst option.

However, because of the risk of confiscation we need to hold SOME of our wealth in some form of paper assets. Being a KISS disciple, I've chosen gold and silver miners as my principle form of paper. I'd LIKE to get into other commodity-producers too - but the potential for another sudden crash frightens me away.

For people who aren't comfortable investing in INDIVIDUAL miners (yet), you might want to start going through the educational materials in our Education Vault - which provides a complete program to familiarize people with these companies AND how to invest in them.

In the meantime, there ARE a few gold and silver miners "funds" with GDXJ probably being the most familiar example. Note that you can't just buy ANY fund of these miners.

Most of these funds focus on the LARGE-CAP producers - which generally speaking have been the worst "dogs" in the sector over the past decade. So you want a fund which explicitly focuses on the junior miners OR at least offers a mixture of large- and small-cap miners.

Long term, I like a LOT of the commodity-based ETF's; however over the short- or even medium-term the risk of a crash COULD mean that those funds plunge MUCH lower before gains down the road. In the short term, you might think of looking for one of the few water-based commodities ETF's (i.e. focusing on companies involved in water purification)? In ANY scenario in the future, clean water looks like a very precious commodity.

__________________________________________________________________________________

Remember that we are NOT financial advisors here. We are coaches/teachers. Understand what this implies. First of all, my own knowledge of financial products is far from comprehensive. Secondly, we're not here to TELL YOU what to do, but rather to HELP YOU do things on our own.

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Thus our own bias is toward simple, do-it-yourself investment strategies - which offer SECURITY and SIMPLICITY.
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#17114
Re: How would you invest $1 million? 2 Years, 6 Months ago Karma: 2
Thanks for the replies guys. Jeff...thanks for reminding me of government's history of stealing wealth from their citizens. And that inflation is closer to 10% than 2%. I agree with you regarding GIC's and the rip off they are.

Sadly, I think my wife & her brother will just go along with what the financial planner suggests (GIC's & mutual funds). My hope is that by the time her mother passes on, there is still a considerable amount of the $ left. My wife and I will be then free to invest her portion as we desire.
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#17115
Re: How would you invest $1 million? 2 Years, 6 Months ago Karma: 218
jg,

I'm no scholar in finance.

But, I'll give you what I know and learned.

I've seen a bunch of money get into peoples heads. You, don't think it will, but it will. One goes to two and you'll tell the boss to shove it.

So, first off, get your priorities right. Kids, family, pre-nup.
You won't be the only one that's changing.

Money, play's on your mind.

Just, look and watch people with there Income Tax Return, need I say more.

If another family member isn't successful, with the money eating at there head-
Think the "family" can survive ? Before, during and after ?

Establish, what this money is for.

Investing, OK-

I like water, PLL is a company to start. PHO is a fund to start.
Death- HI
The best graph- TSCO
MLP- EPD

Wealth, preservation, as a 80 year old man told me today- Gas was worth two dimes, it's still worth two dimes. Two dimes of SILVER....

Don't, be 80 years old screaming at me.... or anyone else.

Do your research, tell know one, be humble...

Be patient and kind to those less fortunate.

Earl
Earl
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#17116
Re: How would you invest $1 million? 2 Years, 6 Months ago  
Hi JG, if you decide to "park" some cash for long or short term the best GIC rates I have found are at www.maxafinancial.com . It is a credit union in Manitoba. I live in B.C. but have found them easy to use through phone, the internet, mail and email.

If anyone knows of any institution providing better rates in Canada please post them.
Seb1

Last Edit: 2012/03/29 15:46 By .
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#17117
Re: How would you invest $1 million? 2 Years, 6 Months ago Karma: 262
jgfergus wrote:
Thanks for the replies guys. Jeff...thanks for reminding me of government's history of stealing wealth from their citizens. And that inflation is closer to 10% than 2%. I agree with you regarding GIC's and the rip off they are.

Sadly, I think my wife & her brother will just go along with what the financial planner suggests (GIC's & mutual funds). My hope is that by the time her mother passes on, there is still a considerable amount of the $ left. My wife and I will be then free to invest her portion as we desire.


JG, I understand the dynamics of family finances.

It can generally be much easier to convince a total stranger of the merits of some DIFFERENT investment strategy than your closest relatives (lol!).

Education remains your best tool in these situations - IF you can get people to look at the facts (i.e. the REAL rate of inflation versus the return on fixed-income investments).

Ironically, following the plundering of MF Global (and the precedent set in the U.S.), it may be MORE dangerous to have any money sitting as cash than in (at least) some GIC.

My understanding is that Canadian banks have ALSO gotten heavily into re-hypothecation, and ALSO have been raising their leverage. So a CANADIAN "MF Global" would not seem to be out of the question.
Jeff Nielson
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#17120
Re: How would you invest $1 million? 2 Years, 6 Months ago Karma: 134
I don't have your problem and never will. Both my husband and I are from "recent" immigrant families. Regardless, I have done some research on protecting what we have.

I'm with Seb1, if you decide to go for GICs.

The Credit Unions stay local with their lending practices. I have read that both RBC and CIBC have invested in the Eurozone. That makes me nervous, so I stay away from the big banks.

Have fun
debsyl
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