Author Topic: Investing advice for elderly relative  (Read 562 times)

Hula Hoop

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Investing advice for elderly relative
« on: August 13, 2019, 01:32:31 AM »
An elderly relative has asked me to invest a lump sum from a house sale on their behalf.  The relative does not need this money to live on so it's purely an investment and will probably go to kids/grandkids eventually.  What do you guys advise? VTSAX? 

MustacheAndaHalf

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Re: Investing advice for elderly relative
« Reply #1 on: August 13, 2019, 04:47:43 AM »
Something a bit more diversified would be better, including both VTSAX (U.S. equities) and VTIAX (international).

Hula Hoop

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Re: Investing advice for elderly relative
« Reply #2 on: August 13, 2019, 01:01:23 PM »
Thanks - what about bonds or REITs?

MustacheAndaHalf

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Re: Investing advice for elderly relative
« Reply #3 on: August 14, 2019, 03:32:51 AM »
Stock markets already include real estate companies which own real estate directly.
You could buy a fund that already has the allocation decisions made for you, like Vanguard LifeStrategy Growth (VASGX).

That's allocated into:
49% U.S. Total Stock Market
31% Total International Stock
14% U.S. Total Bond Market
06% Total International Bond Market

So that would give both stocks and bonds, along with domestic and international.  If the goal isn't a specific amount, then a higher allocation to equities is most likely to have a higher return.  If your elderly relative isn't so sure about changes, you might look up the portfolio Warren Buffet plans to leave his wife:
10% short-term bonds
90% S&P 500

Of course, in his case that's billions of dollars, so 10% short-term bonds is enough to live on.  But sometimes a relative might prefer to use a name they already know like Warren Buffet, rather than try out something newfangled like Vanguard... at least, I suspect most older people haven't heard of Vanguard (despite it's 40+ year history).