FinancialPlanning #Inheritance #InvestingAdvice
Wow, what a situation to be in! Congrats on receiving a large inheritance 🎉 Now comes the fun part of deciding what to do with it. Here are some suggestions to consider:
-
Diversify your investments: Rather than paying off your mortgage completely, consider investing in a mix of stocks, bonds, and real estate to spread out the risk and potentially see higher returns. 💰
-
Consult a financial planner: Meeting with a professional is a great idea to get personalized advice tailored to your specific financial goals and situation. They can help you create a customized plan that aligns with your objectives. 📈
- Consider your long-term goals: Think about what you want to achieve in the future, whether it’s retiring early, buying a second property, or starting a business. Your inheritance could be a great stepping stone towards reaching those goals. 🌟
Whatever you decide to do, make sure to do your research, weigh your options, and make informed decisions that will set you up for financial success in the long run. Best of luck! 💪
Well you can get 4-5% just having it sitting in savings account until your mortgage is up for renewal.. 1.65% is lower than that.. so keep it, earn the interest for 2 years.. then pay it out at renewal.
Put $400k in a two year GIC to payoff the mortgage at maturity
Put about 350K in some sort of cash investment until it is time for the renewal and depending on what rates are at that time you could either pay at off or renew at a new rate and then invest that amount.
The remaining 250K could be invested in a non-registered account according to your risk tolerance or do as you please.
I was in a similar situation with a large sum of money. We just maxed out our mortgage payments and invested the rest. Then at the renewal date you can decide to pay off.
For the love of God… don’t spend it on hookers and blow
You may have to pay income tax on that 600k. Not sure but I’m confident the government will find a way to tax it
CPA here.
I agree with TIs-user’s comment about putting 400k in a 2 year GIC and paying off your mortgage in 2 years. Even though you probably *could* make a little more money in the long run by putting it into long term investments, I think the peace of mind of no longer having a mortgage is worth every penny.
I personally think an index fund is the way to go in the medium/long term (this is not investment advice, just personally how I handle my own finances). BMO runs really good funds which track the Canadian stock exchange (https://ca.finance.yahoo.com/quote/ZCN.TO/) and the U.S. stock exchange (https://ca.finance.yahoo.com/quote/ZSP.TO/). These are funds I both personally own. I think they’re well-run and extremely safe in the long run (again, not investment advice, just my own opinions on my own investment advice)
See if you can negotiate the rate on a GIC if you are keeping such a large amount with them. Ask them for a higher interest rate if you keep with them for longer ?
Not sure what the source of the $ inheritance is from but just keep in mind there will be a tax burden to the estate from rrsps/ unregistered investments/ rental properties etc.
You could do a GIC or index fund but assuming you’re the executor, keep the money in the estate for the next 2 years as estates are taxed at a lower rate than individuals. That tax advantage only works for 3 years with diminishing returns after year 1.
Give to me
I’m in a similar situation. Moved the lump sum I am planning to use to pay down the (currently very low fixed rate) mortgage in 18 months to Wealthsimple. 1% match plus 5% interest in the cash account, a great deal right now. If the interest rate falls which it may well, a short term GIC is also a good option.
Consider investing in a diversified portfolio, tax implications should be a priority
I would use my tfsa account to invest in ETFs. As long as you are not frequently buying and selling, you are good and the earnings are not taxed. My etfs have been increasing in value about 10-15% annually (not including dividend payments).
Pay it off in full. Having no mortgage sounds like a good idea
You could fly to Thailand and live like a king. So many women would gravitate to you. Highly recommend spending some time there.
Don’t buy new luxury car lol
If you max out your RRSP contribution room this year, don’t forget you can take a smaller amount of the deduction each year to reduce your tax bracket from its highest level over the next few years rather than reducing yourself to the lowest tax bracket this year.
Give it to me
I would pay off mortgage immediately. Don’t worry about waiting for it to renew, the penalty is the equivalent of like a few months interest costs which is nothing especially not compared to 2 more years of payments. Be done with it and lock the rest away somewhere you won’t touch it.