UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Author: PThrash Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Proceeds of a house sale... Date: 5/10/2000 11:32 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
... what to do? My mother's house has sold, and I will be receiving a not-that-large sum of money ($150K) that, aside from her social security and her small pension, is the whole amount of money she will have forever and ever. As the POA and responsible party, I need to figure out what to do with the money to maximize income so that her last years in a nursing home are not burdensome to her or to us.

Granted, it's not a lot of money. However, even as a complete neophyte to the world of finance, I have a suspicion I can do better than a money market or other savings-type account. Any ideas?
Print the post Back To Top
Author: MattMiler Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21874 of 74759
Subject: Re: Proceeds of a house sale... Date: 5/10/2000 12:30 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
The sum of money you decribed is not a large amount when medical and living expenses are taken into account. Do not take excessive risks with the funds. Here is the allocation I would suggest (this is my subjective opinion):

30% Money Market Funds or CD's
20% Low Risk (AA rating) Bonds
20% Higher Risk Bond Fund
15% S&P 500 Index
15% Dividend Growth Mutual Fund

With a pension and Social Security income, she should be able to afford a few more years of capital growth. As she ages, and current income becomes more important, consider reducing the Stock percentages to 5 - 10% and transfering those funds into the bond allocations.

My best wishes for your mothers continued health and prosperity.

- Matt

Print the post Back To Top
Author: PThrash Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21875 of 74759
Subject: Re: Proceeds of a house sale... Date: 5/10/2000 12:58 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Thanks. I should have been clear that she is already in a nursing/assisted living home, and her income is insufficient to support the expense of the facility (it runs about $3,000 a month, plus medications and other expenses). Does this change your advice?

Print the post Back To Top
Author: MattMiler Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21876 of 74759
Subject: Re: Proceeds of a house sale... Date: 5/10/2000 1:17 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Given this new information, I would recommend reducing the S&P allocation to 10% (or less, depending on current income needs vs. availability gap) and forgetting about the mutual fund (invest that in the higher return bonds instead).
This is just my two cents - I would also recommend consulting with friends and possibly a financial advisor....

- Matt

Print the post Back To Top
Author: okanetoo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21890 of 74759
Subject: Re: Proceeds of a house sale... Date: 5/11/2000 12:04 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0

My mom is in a nursing home. Before medicaid kicked in she had to pay her full way of about $4500/month until all savings were gone and proceeds from sale of home were used up. Her pension and social security now goes to the nursing home to partially pay her own way and medicaid makes up the difference.

So, see an estate lawyer to see if any of your mother's assets can be shifted to the family. Unfortunately, no matter how astute your investment efforts are, Mom will pay her full way as long as she's able.

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Advertisement