DGI For The DIY

[fenders53]

(04-13-2021, 09:21 AM)EricL Wrote:

(04-13-2021, 09:05 AM)ken-do-nim Wrote: Hi Eric,

You're a great son!

Putting my engineer hat on, before we get started on the implementation, let's nail down the requirements.  How much income, if any, do your parents need?  Then we can come up with an overall target yield for the portfolio, and work towards that.  Second, will they want you managing it, or will they take ownership?  What is their risk tolerance?  Do they plan to use the money to buy something or go on an extended vacation in the foreseeable future?

I haven't been given any income requirements. They've been retired for several years, so any extra income will be on top of what they've already been living on. However, they are going from owning a home to renting, so monthly costs will increase.

Talking with my dad, he wants some dividend income, but is fearful of investing a big lump sum. He's been expecting a market crash for the last five years and is worried about losing principal. 

I don't think there will be much management done with the portfolio. It will generally be buy and hold with collecting dividends for some extra spending money. They can peel off shares as needed to supplement income if needed. They have other retirement savings as well, so this is new money coming into the fold after selling their house of 40+ years.

Also, this is assuming $100k invested with roughly $50k being held in cash for reserves and for buying a few things and going on trips they've wanted to take for a while.

And you should respect that fear because at some point it will happen.  It's good they will sell a few shares off.  They need to enjoy some of your inheritance while they have their health.   

On a side note I tell my daughter I am leaving her a sizeable portfolio.  What year she can legally access it depend a lot on how she manages her personal finances.  I will make good on that threat.  I tell her the "Cat Foundation" is always looking for donations if she doesn't heed my warnings lol.  Now I need to find an actual Cat charity and will them $1K so I don't wreck a good 20 year joke.  She isn't all that fond of cats lol.