Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Greetings, Rkseiple, and welcome. You wrote:

<<I know there is no single simple answer, but any information would be helpful:

I am trying to help my grandmother do the best thing with her money and neither of us are very investment-savvy. She currently has about $80,000 in a trust fund. They are charging her $100 monthly to manage her money which seems high to me. IF I am reading the account statement correctly, they have her invested about 66% in "fixed income mutual funds", 33% in "common and mutual fund equities" and 1% in "cash equivalents". The return (I think? It is listed as "yeild at market") is 4.33.

Questions:
Does this seem like a reasonable way to manage the money or can we do better and maintain relatively low risk?>>


It may be "reasonable" based on your grandmother's tolerance for risk in the market, but the fees that are being assessed on that management are outrageous at 1 1/2% per year. I'll bet she paid a load on the investment as well. And it wouldn't surprise me at all to see high admin and 12b(1) fees on top of all that in whatever funds she is in.

<<She needs about $400/month income from her money, is this even possible while maintaing the principle?>>

$400 per month is $4.8K per year on portfolio worth $80K. That's a 6% per year draw which, invested the way it is, happens to be on the high side to ensure the maintenance of principal. To get a feel for what she can take without undue risk, read the three articles I wrote on withdrawals in retirement starting with the one entitled "Investing Your Nest Egg" at http://www.fool.com/retirement/manageretirement/manageretirement6.htm. The two others follow that one in succession.

<<In the example "retiree portfolios" at the bottom of each table is listed "cash". What does this mean?>>

The cash in the portfolios simply represents uninvested money that sits in the broker's sweep account drawing money market rate interest.

Regards..Pixy
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.