Investment help for an old lady please

[insect]

Any advice will be appreciated as I have lost a bit of faith in my broker.

The problem:

My mom (67) just sold her house for 1.7m, she moved to a smaller place after my dad passed away couple of years back.

She is debt free, and also receives 11k per month rental income from the family business.

She was renting the house out for 7k a month and now she would like a monthly income of at least 7k from the 1.7m investment.

What to do?

 

[SauRoNZA]

That would be easily achievable through a living annuity

Probably closer to 10k a month depending how it’s structured.

https://www.10x.co.za/living-annuit...qZ2JH3-NwRqORAMQFaK33ZNjQakVsNC4aAgRkEALw_wcB

 

[insect]

That would be easily achievable through a living annuity

Probably closer to 10k a month depending how it’s structured.

https://www.10x.co.za/living-annuit...qZ2JH3-NwRqORAMQFaK33ZNjQakVsNC4aAgRkEALw_wcB

Thanks SauRoN, looks exactly like what she needs - she will be very happy if closer to 10k.

Quick and probably silly question, but how safe is it compared to say money market or investments with a bank?

She is a bit paranoid after Steinhof issue, she will murder me if something bad happens to her money! (probably run me over in the street)

 

[SauRoNZA]

A money market (cash) or bank account doesn’t beat inflation or not nearly by enough so she’s slowly but surely be losing money if she put it in there.

10x is very balanced and had less than 1% in Steinhoff from what I remember and that was their higher risk portfolio which isn’t in play here and also very low fees.

Put it this way. I would trust my own living annuity with them.

The monthly pay out is all determined by how much capital is to be preserved for he estate etc. But chat to their consultants they’ll give you multiple options.

 

[HavocXphere]

You probably don't want to stick a 67 y/o's investments into an equity heavy portfolio.

So no you're not likely to get 11k

The risk isn't another Steinhoff, but rather a market wide crash & being 67 she doesn't necessarily have X years time to ride that out

 

[insect]

Thanks, I just used their calculator and I see its about sustainable income +-9k for the next 20 years.

The low fees also makes a big monthly difference over that time period, way bigger than I thought.

I will definitely give them a call.

 

[insect]

You probably don't want to stick a 67 y/o's investments into an equity heavy portfolio.

So no you're not likely to get 11k

The risk isn't another Steinhoff, but rather a market wide crash & being 67 she doesn't necessarily have X years time to ride that out

Sorry I should have been more specific, I meant similar value to the rent she received from the property sold which was 7k.

What would the safest option be?

 

[supersunbird]

Sorry I should have been more specific, I meant similar value to the rent she received from the property sold which was 7k.

What would the safest option be?

Get Life Annuity quotes from various providers (Life Insurers are a start), preferably one that increases with inflation.

Read up about the various types of Life Annuities and how they differ from Living Annuities.

 

[cyberbob1979]

I got 13% from 10x last year on my investment with them so yeah - good choice

 

[Tomtomtom]

Sorry I should have been more specific, I meant similar value to the rent she received from the property sold which was 7k.

What would the safest option be?

She should probably compare her options against the rental business she was in before, i.e. ~5% return with capital somewhat protected against inflation.

She will recognize that even unleveraged, property is by no means risk free. I'm not sure if that 7k figure accounts for the costs.

A bond heavy fund returning at least 10% may be a good alternative.

She should obviously capitalize all of the return she does not immediately need.

 

[HavocXphere]

What would the safest option be?

Money market - but as sauron says that gets you <inflation returns

To get good returns you have to take risks. They go hand in hand. So you've gotta pick where on that spectrum you want to be.

All I was saying is that Sauron's suggestion is a little too far towards the risky equity side for someone already at retirement age and seemingly quite risk averse.

So you probably want something more towards the middle. Like the low/medium equity ones from Sauron's link...but that won't get you 11k.