#116: Investing for your parents

A friend recently discovered a financially dependent parent had a huge amount of credit card debt. This revelation turned the dinner table conversation to the financial health of our parents. Of the seven of us, only two weren't worried about their parents' financial future. Naturally we proceeded to drink heavily.  I find it much harder to speak to family members about money than to anyone else. Our parents managed to raise functional, financially secure members of society. After that significant achievement it can't be easy to admit that you need help from the sprouts you raised. I hope this week's episode will provide a glimmer of hope if you happen to find yourself in a similar situation with your parents. Nothing can be done about the late hour, we admit, but if you can find a way to speak to your parent about their situation (I haven't yet worked this out), you might just be able to find a creative solution. Ruben asked: My father is turning 60 next year with no pension/investments or even a house. I estimate he could work for another 5-10 years at his own business. How can I invest to help him with income for retirement? Twitter Daniele asked: I pay my mom rent. Should I put it in a TFSA for her instead? She has a company pension fund so this would supplement it. I am having a hard time convincing her that it is still a good idea to invest in a TFSA even though she is nearing retirement.  She works for a bank's investment arm. Would they allow her to open up an account with another provider like EasyEquitites? The TFSA and UT fund options (no ETFs) for her bank are pathetic (fees). Get Down Adam  I am 32, I graduated as a doctor two years ago. Financial people with various levels of qualification and pizazz came to sell us their products. The bottom line was that you had to have started investing at 24 (which was the age of my peers). I was already 6 years behind so I went into panic mode.  Two years into the real working world again, I've paid off my student loan of R110,000. I only have about R60,000 left on my car loan. I have sadly given up on buying coffees, and I'm back to that instant coffee shit. I limit my spending as far as possible. 22seven is my most used app.  Because I didn't understand what was happening when I started my investment journey, I signed up for a Liberty RA investing in Liberty Medium Equity (C) as well as a Stanlib Tax Free Global Equities Feeder (A). I recently bought the Coronation Market Plus Fund simply because they had a promotional sign up bonus of 10% which I thought couldn't hurt.  I own a flat with my sister (which our parents bought for us). We rent it out and receive about R6,000 income a month from that. Recently we have been putting R500 a month into Easy Equities and playing around with ETFs. I have tiny amounts in: Cloud Atlas AMI RealEstate exSA Ashburton Global 1200 Satrix Top40 Stanlib S&P500 Stanlib Global Government Bonds I also have fuck you money shares/FSR in: Netcare (what a disaster) Montauk Energy Capitec We also have some cash stashed in an ABSA fixed deposit to cover maintenance etc.  My own emergency funds are modest for now, but I'm building in a 32 day fixed deposit in FNB.  Am I playing with too many variables? Are there too many ETFs?  How do I know if I have saved enough?  What's the difference between building a portfolio and just sommer buying shit and hoping you're right? Please fix me, or at the very least tell me I can drink decent coffee again. Frank shared a great graph he found of a married couple's shared finances. I'll include a link in the show notes. There's a line item in the graph called "blackmagicfuckery" which is how they account for money that fell through the cracks.  Jorge wants to know if he can withdraw profits from his tax-free account without affecting his lifetime limit. Jon-Luke is a freelancer in his 40s. He has no debt except for a house he'd like to renovate. He works in TV when there is work, but the industry has been going through a dry spell. He had money saved for renovations on his house, but he's had to use all of that last year when work dried up. He aims for an emergency fund of 8% of his portfolio, but he's currently sitting at just over 2.5%.  In the next few years I can envision a bumpy ride in my chosen profession.  The probability is high that I may need to draw my emergency fund down again it won't last as long as I need it to.  Should I do what I would have done in the past and go into my overdraft and credit cards or should I draw out of my Share Portfolio? Keep in mind that this would be for short term periods of 3 to 9 months. My instinct would be to leave my shares alone and give them the chance to grow. I am also on a strict plan to downscale my spending and to save more… My goal is to be saving 25% of my earnings by the end of next year, but getting there is a bit of a delicate process especially considering the current conditions in the Film Industry.  Also I am loathe to sell my current house until I've had a chance to do the renovations I planned. There's some money to be made here for sure! G-Boi has taken his expensive RA by the horns. I've moved my RA from Sanlam to EE and opened a TFSA with EE. Should I max out my TFSA, then contribute to my RA? Or equally contribute to both my RA and TFSA. You and Simon made me feel so shit about the RA trap, at least I made the move to EE so that I can control it and don't have to pay 4% Ter every year. Luvuyo wants to know if we think rewards programmes are worthwhile.  Do you think certain rewards points is to your benefit financially? I have an Investec Account which gives decent rewards points (obviously not as great as ebucks that everyone tells me about), a Dischem, Clicks, Woolies & a The Entertainer account and I only buy clothing through a family member that works at a clothing store at a massive discount.  Do you think that using discount and reward offerings can materially affect keeping lifestyle costs low so that you free up funds to invest or am I just a cheapskate that gets slightly marginal benefits from the above? Johannes wants to know if I'll do a spreadsheet on all the costs involved in purchasing a home. I'd be happy to do this if the purchase goes through. So far I've spent R453 on sectional title and title deed reports. If the home loan gets approved, I'll spend a further  R2,875 on an inspection. That brings me to R3,300 before anything has actually happened.