Author Topic: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?  (Read 2484 times)

Healthie

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Hi Everyone, I'm inheriting roughly $110,000 in Vancouver B.C. and I'd like to hear some opinions on what to do with it. I'm currently in school part time, working part time, and applying for nursing school in the Spring of 2017, which will cost ~25-30k to complete over 2-3 years, not including regular life expenses over this time ($13,680/year) = total possible cost of ~$75,000 for nursing school.

Expenses:
Rent - $500
Car insurance - $215
Gas - $60
Groceries - $300
Gym Pass - $15
Extra expenses - $50ish
Tuition (every 4 months): ~$1,500

Assets:
2009 Toyota Yaris (paid off)
$5,000 in an investment company.

Income: Casual employment, manage to just cover my expenses and some of my tuition. Good job, related to my field, will be an asset. no plan to stop working there on school breaks, enjoy the job.

Some points to consider:

1. I've been told working up north for extended periods nursing can give me the opportunity to have student loans forgiven. This is preferable to paying with my inheritence. I don't know the details about this program, but it's something to look into.

2. as with #1, I want student loans. I don't know if I won't be able to get them because I have such a lump sum. Is there something specific I need to invest this in in order to get student loans (i.e. house/apartment?).

Some ideas I've had for investments:

1. keep $10k in my bank for my rainy-day fund and to not worry about overworking doing my prerequisites, throw the rest in my TFSA for the time being.

2. give it to the people who are already investing my $5,000. They've made money for my family and have been very happy working with them.

3. buy a home; either in an adjacent city to Vancouver (New West, Burnaby, Surrey, etc.) or buy something out East where property is cheaper and rent it out through a management company. This is tricky as I've never been a landlord and I don't know much about home repair. I don't think I would live in it; for the time being it would be necessary to treat it as a rental property to pay for itself.

Thanks guys!





FINate

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #1 on: December 20, 2016, 06:02:10 PM »
Don't let the tail wag the dog on points (1) and (2). You need to do a bunch of homework on these to see if they make sense and will work out the way you expect. People on this forum can point you to relevant resources, but government programs are notorious for their complexity and you're going to have to do your own due diligence. What are the exact conditions/requirements for the loan forgiveness program? Does it have an asset test or income limitation? Any restrictions on the size or type of loans, or what the loans were used for (living expenses, or just tuition)? How difficult is it to get the jobs tied to the forgiveness? How long do you need to work there for the loan forgiveness? What percentage of people that enter the program complete it successfully? Does loan forgiveness result in a tax liability? What is the pay difference working up North vs. other locales?

Assuming there are no issues with your specific situation, you still need to determine if the opportunity cost is worth it. Let's say you have to work for 10 years for loan forgiveness (I have no idea, just making that up), but jobs up North pay $10K less than comparable jobs elsewhere (also making that up). Take into account cost of living as well. How much is loan forgiveness "costing" you? Depending on the specific numbers it could go either way.

I would also take into consideration career opportunities/development in each situation. I have no idea if working up North is beneficial or detrimental for ones career in your field.

Absolutely do no buy a rental/investment property unless you a) want to be a landlord b) know the market where your buying very well and can spot a good deal that generates a good yield and c) are committed to it for the long term.

2Birds1Stone

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #2 on: December 20, 2016, 06:06:34 PM »
I would be VERY VERY weary of the "investment company".

All you need to do is figure out your risk tolerance and throw your investments in a balanced target date fund.

If you absolutely must have someone manage your investments, Vanguard offers a service that costs merely .32% of your assets under management.

Most advisory not only charge 1%+ but also have sales commissions, loads, and other fee's designed to make them rich and you chasings returns.

swick

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #3 on: December 20, 2016, 06:07:51 PM »

1. I've been told working up north for extended periods nursing can give me the opportunity to have student loans forgiven. This is preferable to paying with my inheritence. I don't know the details about this program, but it's something to look into.


I don't have a lot of advice for you, other then if you are considering this as an option, don't do it without spending a week or two in the communities you might be considering. Also, find out if you will be required to travel between communities. <--- I lost two good friends in 4 years because they had to travel for work (one was a nurse) The roads and the drivers suck, especially in winter.

We took a job up north to expedite our fire date and after 4 years, decided that no amount of money was worth it for us. We value things like vegetables and having like minded people close by too much. It works for some people, I'd just go into it with eyes open - especially if you are used to city living.
« Last Edit: December 20, 2016, 06:09:41 PM by swick »

Mighty-Dollar

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #4 on: December 20, 2016, 07:32:03 PM »
What to do with it? Stock and bond index funds like SPY and BND.

RichMoose

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #5 on: December 21, 2016, 12:13:59 PM »
Hi Everyone, I'm inheriting roughly $110,000 in Vancouver B.C. and I'd like to hear some opinions on what to do with it. I'm currently in school part time, working part time, and applying for nursing school in the Spring of 2017, which will cost ~25-30k to complete over 2-3 years, not including regular life expenses over this time ($13,680/year) = total possible cost of ~$75,000 for nursing school.

Some ideas I've had for investments:

1. keep $10k in my bank for my rainy-day fund and to not worry about overworking doing my prerequisites, throw the rest in my TFSA for the time being.

2. give it to the people who are already investing my $5,000. They've made money for my family and have been very happy working with them.

3. buy a home; either in an adjacent city to Vancouver (New West, Burnaby, Surrey, etc.) or buy something out East where property is cheaper and rent it out through a management company. This is tricky as I've never been a landlord and I don't know much about home repair. I don't think I would live in it; for the time being it would be necessary to treat it as a rental property to pay for itself.

How is your $5000 invested with that investment company? What type of account is it in?

The first thing I would do is open a TFSA account and Margin Investment Account (don't actually use the margin) with an online brokerage like Questrade. Top up your TFSA first to the max. Your contribution limit will be posted on your CRA account. So if you haven't done so already, create/register an account with CRA and find out what your contribution limit is. http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/menu-eng.html

Put most of the remaining balance in the Investment Account. Then follow a Lazy Portfolio strategy to invest (read: http://canadiancouchpotato.com/wp-content/uploads/2016/01/CCP-Model-Portfolios-Vanguard-2015.pdf)

You probably won't be eligible for government student loans no matter what you do, but you can check your eligibility online at StudentAid BC.

Don't forget to apply for as many scholarships and grants as you can! $500 here and $1000 there can go a long way!

Oh, and don't buy a house. The last thing you want right now is a schwack of debt and landlord responsibilities as a student in a bloated real estate market.

Retire-Canada

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #6 on: December 21, 2016, 12:55:31 PM »
2. give it to the people who are already investing my $5,000. They've made money for my family and have been very happy working with them.

What they've done is made themselves rich from your money every year and given you some of the excess profit in years when their fees were lower than the money they made from your money. If you lose money they still get rich. It's a shitty deal for you and a great deal for them.

joonifloofeefloo

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #7 on: December 23, 2016, 05:40:36 PM »
I would:

1. Look at the laws re: student loan forgiveness in relation to assets. Consider how to line your situation up with that, i.e., shelter assets legally/ethically/appropriately. Be aware, though, that the laws can change any time, so lining your life up with today's laws may not work out the way you want. But, reading the relevant laws can give you a sense of things, sort out the most appropriate workaround, etc. If you want help finding the laws, you could start a thread on that (under Ask A Mustachian, I would think).

2. Not buy a place in BC. Prices may keep going up, or the bubble may pop. None of us can know. I'm simply not a fan of (a) putting all one's eggs in one basket, (b) landlording in BC per its tenancy laws, and (c) maintaining a place or managing tenancies when you've got enough on your plate. Been there, done all that. I also wouldn't buy out east if a/b/c still apply at the lower cost.

3. Read The Millionaire Teacher, Second Edition (just released). It rocks and it's funny :)    Very accessible, and will help you understand what you're about to do.

4. Keep $10k as rainy day fund, yes.

5. Invest the rest. As others here noted, I would skip the management company and go with the Couch Potato Portfolio as linked to above. There's a learning curve involved, but it's short and fast. The MT book will help you understand what you're doing there. [Why is this bolding the whole area? Oh well.]

Healthie

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #8 on: December 27, 2016, 07:13:30 PM »
Thanks for all the replies guys, really not sure where to go from here.

Re: up north: I think these positions are numberous, but I'll look into it. I appreciate the reality checks given... I don't think it would be a long term position, but portions of each year given to working up there. I'll look into the specs.

Student loans: I'll look into these, too.

Any other modern Canadian investment books or readings would be appreciated. I'll put some time into reading about these.

I felt the house would be out of the question at this point. Nursing school is notoriously hard and I wouldn't want to divide my attention.

Retire-Canada

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #9 on: December 27, 2016, 09:29:25 PM »
Any other modern Canadian investment books or readings would be appreciated. I'll put some time into reading about these.

I would read this for Canadian specific content:

http://canadiancouchpotato.com/

Heckler

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #10 on: December 28, 2016, 09:22:56 AM »
Any other modern Canadian investment books or readings would be appreciated. I'll put some time into reading about these.

I would read this for Canadian specific content:

http://canadiancouchpotato.com/

I started with the Canadian Couch Potato Guide to the Perfect Portfolio in paper form, likely hard to find now  Next up was Bogleheads, which is US based, but still relevant.  Then I found Canadian Bogleheads, called Finiki. 

http://www.finiki.org/wiki/Main_Page

https://www.bogleheads.org/wiki/Getting_started

snacky

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #11 on: December 28, 2016, 09:47:16 AM »
If you want student loans you have to demonstrate financial need. They look at how much $ you have in the bank. There are ways around this:

-if you have a trusted friend that will let you put the money under their name that works
-withdraw the money for the time student aid is looking at. It's the first day of the pre study period, which you will have to calculate. They only care about your bank balance for that one time.

For those reading along at home, availability of scholarships, bursaries, and provincial loans (which are often more favourable than federal) depend on being approved for federal student aid. There's no interest until you graduate. It's a really student-friendly program, compared to the American system.

Rubic

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Re: 25, inheriting ~$110,000, Vancouver B.C, future nurse, what to do with it?
« Reply #12 on: December 28, 2016, 01:11:21 PM »
One question related to your monthly expenses:

Why are you paying $2580 per year on auto insurance for a paid-off
car that's probably worth less than $7000?