Longterm investing anxiety: Property or pension, or what?
April 13, 2014 2:50 PM Subscribe
Husband and I have $130k saved up. No mortgage, no pension to speak of. Just been called into the bank for talk about long term plans and am freaking out about what to do. Advice? Do I need to see a financial advisor or are they not a good idea?
Complications are that husband has a contract-based job (usually 6-12 months) that can move around Vancouver/Sydney/NY/Seoul/London/Norway, depending. He could have continuous work for the next twelve years or he might spend 6 months here and there out of a job while the offices pitch. I haven't made any long term financial plans as due to a history of heart problems and heart surgery followed by cancer and resulting surgery - I never expected to live this long and really doubt I will make it to retirement age. I'm already showing signs of becoming ill again. I temp where I can, but that doesn't bring much money in.
I know we're throwing money down the toilet by renting but I've been warned against being an out-of-country landlord, and as we may have to rely only on his income for some time I don't think we could carry the mortgage on an empty flat plus costs of wherever we're renting. We're european nationals living in Canada at the moment, so buying is fraught with tax problems anyway as non-residents. We were thinking of retiring (if I get there) to Greece/Spain/Portugal where the 1 bed flats cost £50k. We're really in a muddle here, we cannot stay anywhere long enough to pay a mortgage off but I don't know how we're supposed to prepare for the future. If it matters, we are both 33. Any advice would be most welcome, even if it's to see an advisor. TYIA for any help.
Complications are that husband has a contract-based job (usually 6-12 months) that can move around Vancouver/Sydney/NY/Seoul/London/Norway, depending. He could have continuous work for the next twelve years or he might spend 6 months here and there out of a job while the offices pitch. I haven't made any long term financial plans as due to a history of heart problems and heart surgery followed by cancer and resulting surgery - I never expected to live this long and really doubt I will make it to retirement age. I'm already showing signs of becoming ill again. I temp where I can, but that doesn't bring much money in.
I know we're throwing money down the toilet by renting but I've been warned against being an out-of-country landlord, and as we may have to rely only on his income for some time I don't think we could carry the mortgage on an empty flat plus costs of wherever we're renting. We're european nationals living in Canada at the moment, so buying is fraught with tax problems anyway as non-residents. We were thinking of retiring (if I get there) to Greece/Spain/Portugal where the 1 bed flats cost £50k. We're really in a muddle here, we cannot stay anywhere long enough to pay a mortgage off but I don't know how we're supposed to prepare for the future. If it matters, we are both 33. Any advice would be most welcome, even if it's to see an advisor. TYIA for any help.
Just been called into the bank for talk about long term plans and am freaking out about what to do. Advice?
Don't have the meeting with the bank. They are going to try to sell you overpriced, high-fee "investments" or insurance. Instead, follow saucysault's advice about seeing a financial advisor.
I know we're throwing money down the toilet by renting
No, you are definitely not throwing money down the toilet. You're making a rational decision to rent because you move frequently. I would not consider buying a house/apartment unless I was planning to live there for at least 10 years.
posted by medusa at 3:13 PM on April 13, 2014 [7 favorites]
Don't have the meeting with the bank. They are going to try to sell you overpriced, high-fee "investments" or insurance. Instead, follow saucysault's advice about seeing a financial advisor.
I know we're throwing money down the toilet by renting
No, you are definitely not throwing money down the toilet. You're making a rational decision to rent because you move frequently. I would not consider buying a house/apartment unless I was planning to live there for at least 10 years.
posted by medusa at 3:13 PM on April 13, 2014 [7 favorites]
Best answer: I know we're throwing money down the toilet by renting
This is a dumb fiction perpetrated by real estate agents, mortgage brokers, and builders. And I say that as someone who just bought a house. If things go well with a house, it can appreciate in value over time and give you equity, but a lot of things can go wrong and it definitely isn't the safe investment haven my parents thought it was. Renting is paying money for a place to live, which isn't throwing money away - you're getting a place to live in return, as well as release from a lot of the worries and hassles of home ownership.
I agree that you can benefit from meeting with a "fee-only" (is that what they call them in Canada?) financial adviser. That is someone who makes their money by charging people who seek their advice an hourly fee, like an accountant or lawyer would. Some financial advisers work on commission or are employed by a company that is trying to sell something. Your situation is unique, so it is worth shopping around to find someone with international experience.
You also do not have to meet with the bank. Just say "no thanks."
posted by jeoc at 3:21 PM on April 13, 2014 [13 favorites]
This is a dumb fiction perpetrated by real estate agents, mortgage brokers, and builders. And I say that as someone who just bought a house. If things go well with a house, it can appreciate in value over time and give you equity, but a lot of things can go wrong and it definitely isn't the safe investment haven my parents thought it was. Renting is paying money for a place to live, which isn't throwing money away - you're getting a place to live in return, as well as release from a lot of the worries and hassles of home ownership.
I agree that you can benefit from meeting with a "fee-only" (is that what they call them in Canada?) financial adviser. That is someone who makes their money by charging people who seek their advice an hourly fee, like an accountant or lawyer would. Some financial advisers work on commission or are employed by a company that is trying to sell something. Your situation is unique, so it is worth shopping around to find someone with international experience.
You also do not have to meet with the bank. Just say "no thanks."
posted by jeoc at 3:21 PM on April 13, 2014 [13 favorites]
I think you are in a perfect situation for renting. It isn't throwing money away. Regularly having to move and as a result either buying and selling all the time or being absentee landlords in other continents would be throwing money away.
Your situation is far too complex for a bank's financial advisor to help you with. You want to find a financial advisor with experience that is relevant to your situation -- your husband's job or, failing that, his coworkers, may be able to help guide you there.
posted by jeather at 3:54 PM on April 13, 2014 [1 favorite]
Your situation is far too complex for a bank's financial advisor to help you with. You want to find a financial advisor with experience that is relevant to your situation -- your husband's job or, failing that, his coworkers, may be able to help guide you there.
posted by jeather at 3:54 PM on April 13, 2014 [1 favorite]
Just been called into the bank for talk about long term plans and am freaking out about what to do.
If this is hyperbole, please remember that just because somebody wants to meet with you doesn't mean you have to. If they've called you, it's a sales call. It's ok to decline.
If this is not hyperbole, and you are just wondering if it is worth seeing a financial adviser, then yes it probably is, as long as you are only paying them a fee.
posted by Houstonian at 4:29 PM on April 13, 2014 [1 favorite]
If this is hyperbole, please remember that just because somebody wants to meet with you doesn't mean you have to. If they've called you, it's a sales call. It's ok to decline.
If this is not hyperbole, and you are just wondering if it is worth seeing a financial adviser, then yes it probably is, as long as you are only paying them a fee.
posted by Houstonian at 4:29 PM on April 13, 2014 [1 favorite]
Response by poster: OK, I'll put this very very simply: I am not actually physically panicking merely at the thought of a meeting with my bank. As you can gather from everything written below the line, I am very concerned about our long term plans and am asking for help with what to do about that.
Hope that's cleared up.
Thank you everyone else for your advice, I'm looking into an independent FA.
posted by everydayanewday at 4:58 PM on April 13, 2014
Hope that's cleared up.
Thank you everyone else for your advice, I'm looking into an independent FA.
posted by everydayanewday at 4:58 PM on April 13, 2014
Best answer: What form is the $130k in? If it's cash sitting in a bank account, it could probably be better invested, but remember that all forms of investment carry risk (even cash has a risk of devaluation through inflation).
I would suggest posting this question at a forum dedicated to investing advice such as Bogleheads.
posted by justkevin at 5:11 PM on April 13, 2014 [3 favorites]
I would suggest posting this question at a forum dedicated to investing advice such as Bogleheads.
posted by justkevin at 5:11 PM on April 13, 2014 [3 favorites]
Best answer: To help with finding an independent financial advisor, there's an online directory from MoneySense Magazine that may be helpful: http://www.moneysense.ca/directory-of-fee-only-planners
There's also a good article from the same magazine on how to find a good planner:
http://www.moneysense.ca/columns/finding-a-financial-adviser
posted by gwenzel at 6:18 PM on April 13, 2014 [4 favorites]
There's also a good article from the same magazine on how to find a good planner:
http://www.moneysense.ca/columns/finding-a-financial-adviser
posted by gwenzel at 6:18 PM on April 13, 2014 [4 favorites]
Best answer: An independent, fee-only financial adviser is a good idea for you in terms of what all these 'long term plans' entail.
When I was in my 20's I read Jane Bryant Quinn's 'Making the Most of your Money', and it was an eye-opener, in particular the need to save for retirement now.
And lots of other 'life planning' kinds of things like
- life insurance and other 'safety nets'
- debt
- retirement planning
- buying a house or other major purchases
- will and estate planning
- stock and bond investments including mutual funds
You mention no 'pension planning' and that must be a source of concern, as well as the personal particulars. If you prefer to 'do it yourself' you can do well by buying a $25 book and making some decisions.
Paying someone to do the hand-holding is also fine; that person can give some 'compared to other people they see' perspective it can be helpful.
posted by scooterdog at 6:58 PM on April 13, 2014 [1 favorite]
When I was in my 20's I read Jane Bryant Quinn's 'Making the Most of your Money', and it was an eye-opener, in particular the need to save for retirement now.
And lots of other 'life planning' kinds of things like
- life insurance and other 'safety nets'
- debt
- retirement planning
- buying a house or other major purchases
- will and estate planning
- stock and bond investments including mutual funds
You mention no 'pension planning' and that must be a source of concern, as well as the personal particulars. If you prefer to 'do it yourself' you can do well by buying a $25 book and making some decisions.
Paying someone to do the hand-holding is also fine; that person can give some 'compared to other people they see' perspective it can be helpful.
posted by scooterdog at 6:58 PM on April 13, 2014 [1 favorite]
Seconding the advice to talk to a fee-only planner, and seconding the suggestion to check out the Bogleheads forum - and adding that the Bogleheads also have an excellent wiki, which has general investment advice as well as specific information on planning for retirement. (The Jane Bryant Quinn book is often recommended by Bogleheads, so I'll second that, as well.)
posted by kristi at 10:38 AM on April 14, 2014 [1 favorite]
posted by kristi at 10:38 AM on April 14, 2014 [1 favorite]
The bank is trying to sell you something. As a previous commenter has said, they are trying to make money off of your money, and since they've come to you, they don't truly have your interests in mind. Decline or blow off this meeting.
posted by tckma at 11:29 AM on April 14, 2014 [1 favorite]
posted by tckma at 11:29 AM on April 14, 2014 [1 favorite]
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posted by saucysault at 3:08 PM on April 13, 2014 [25 favorites]