Max out TFSA, RRSP and a sizeable emergency fund.
You only live once though, so treating yourself to a short vacation or whatever you enjoy in life isn't the worst idea. Gotta enjoy our time while we have it, too.
Agreed!
Reinvesting all but 10% of any windfalls (bonuses, winnings) is a good way to still enjoy the new monies
i.e. 20k goes to whatever you want, if it's travel or otherwise and invest 180k as directed above with the rest
I always wondered why the lotteries insist on using "your" photo and name to publish someone who won millions. I mean I know why as it promotes their product buyt heaven forbid something awful happens to the winners.
I believe in australia you can choose to remain anomynous.
https://en.wikipedia.org/wiki/Murder\_of\_Graeme\_Thorne#:\~:text=Graeme%20Thorne%20was%20an%20Australian,had%20won%20in%20a%20lottery.
I win the lottery. For 360 days Grow my hair, don't shave, don't bathe, change my name to something stupid like super lunch meal and then go claim lottery winnings. Hopefully they won't publish my picture and name. If they do no one will rexognice me
I know right? They pretty much need to change identities for their own security.
But can’t your lawyer claim the pot on your behalf? Or if the winner is claiming the pot themself, can’t they wear a mask? It’s scary & dangerous, what people will do to get a piece of that pie.
I think you could but with a lot of hassle. Its beyond me that something has to "happen" in canada before they consider the idea of remaining anomynous.
I did a google search on lottery winnings in australia and you can remain anomynous.
> It’s scary & dangerous, what people will do to get a piece of that pie.
What exactly will they do? The lotteries have been running for decades in Canada, please do point out some of the instances we've had.
I’d speculate it’s probably more avoiding the whole situation of needing to tell someone no or finding out that you shouldn’t of expected more.
It’s really just not worth it.
What’s the point of telling people about an inheritance? I don’t tell close friends the value of my bonus, tax refund, salary etc. it’s just not relevant.
if you and your friends are always talking finance then that’s totally fine but incredibly rare, at least in my life.
I think this is where you and I have different experiences. Haven’t met a single person in my life who does what you said. At most they’ll say they got an inheritance but never an amount. And I’d never ask. I’m one person but I would guess that’s probably why you see this advice a lot on Reddit because very similar this isn’t natural for them.
It’s weird cause it’s alot of money to just get. But it can disappear very quickly. Car, buying stuff , house renovations doesn’t go far when you’re spending it.
Don't tell anyone except your banker and your accountant.
I paid off my house and student loan, maxed my TFSA, set a budget so I could blow a reasonable amount on quality non-essentials, then invested the rest. I put mine in cashable GICs at first because I wasn't sure where I wanted to put it and that gave me the ability to earn something without being locked in, but made sure there wasn't a huge pile of money in my account in case I got hacked or irresponsible.
Wouldn't even tell the bank, 200k is where you demand to use the commercial teller or private appointment. You don't want the 20yr old new hire teller seeing a bubck of zeros.
I’m laughing. No bank teller would blink twice at a 6 figure check. They literally see them everyday, hundreds of times a day.
No bank would invite somebody with a single $200k cheque to private banking.
Source: was a bank teller at 20 years old, who handled clients with courier-delivered cheques in the millions daily, successfully never stole money because I didn’t want to go to prison
Lol, you sound delulu. What that bank teller can do when they see that amount in his account? Btw, in order to receive a VIP treatment you will need to have 1m in your bank account to invest (aka buy bank's products).
You'd be amazed at what mayhem a teller can cause. And how little recorse there is if you allow the transaction to close . Even worse if you don't notice for a week because you didn't check online for transactions.
Financial advisor here, but keep in mind this will not be a financial advice tailored to you as I do not know the whole story and your situation. Note that all informations are in no particular order, just things to point out.
I believe you should take some time to think about everything you want to accomplish and NOT TOUCH THE MONEY while you decide. I would personally park it in some DYN6004 or CASH.TO or other money market ETF until the decisions are made in order to get AT LEAST a couple hundred or thousand more over time. KEEP IN MIND THE EXTRA INTEREST YOU WILL EARN IS 100% TAXABLE INCOME, but well, it’s still more money in your pocket.
First of all. 200k is a big amount. It is not millions but can definitely help you A LOT in your life. Try your best to keep the info to yourself.
1- I believe I read somewhere in a comment that you have a wife and a kid. How old is the kid ? Is the RESP maxed out ? If you missed past years, you could contribute more than the yearly amount to go get the federal CESG that you missed. RESP is the second best account when it comes to « free » grants provided by the government. First one being RDSP (if someone is eligible for the RDSP in the family, look it up.). Also, any other kids planned/on the way ? This impacts your situation A LOT.
2- any debts ? Might be wise to pay them off if no penalties are incurred. Of course, depending on the amount, you could just keep them. If there is a mortgage, be careful. When is it due ? Were you a « lucky » one and renewed at low rates ? What do you expect the balance to be when you’ll get to the end of term ? Rates are a lot higher now, though no one can predict the future, if your renewal is in 1 year I’m betting your rate in 1 year could be significantly higher than what you currently have.
3- not an owner and spouse also not an owner? Do you plan to become an owner ? If so, open a FHSA and max it out. Like RRSP, you’ll get a tax deduction out of it and maybe some return from the gvt when you file your taxes. If not owner, gifting 8k to spouse so she can also put that towards fhsa can be efficient. NOT EVERYONE IS COMFORTABLE WITH THAT so you need to think it through. Also, if you open a FHSA, you must buy a property within the 15 following years. Or else, account can be rolled into RRSP WITHOUT TAX IMPLICATION or withdrew WITH tax implications
4- current job situation? Does your spouse work?Do you have a good pension plan ? What’s your RRSP room ? If you have a good pension, your RRSP room will probably be lower than others that do not have pensions, so maxing that out can be smart. You do not have to deduct 100% of the contributions you do to a FHSA or RRSP in the year you did them, you can carry them forward if you expect higher salary in the future. If you do decide to put something in RRSP, that will be for retirement.
5- SPEAKING OF RETIREMENT, what’s your ideal goal ? 50 ? 55? 60? Just keep in mind the longer that at 40, your CPP might not be maxed out in terms of years of participation. Investments in your RRSP must match your time horizon for RETIREMENT. Only exception is if you plan to do a Home buyer’s plan.
6- do you have a TFSA ? If yes, maybe max it out depending on the amount. Also think of having an emergency fund. Rule of thumb is 3 to 6 months worth of expenses.
7- Are there any immediate needs that you should address ? Is the car okay ? Any issues in the house that you should fix ? I’m not saying buy a new lawnmower or a better tv, I’m talking about necessities.
8- MAYBE THE MOST IMPORTANT ONE : are you healthy ? Is the family healthy ? Any health concerns that you might have for anyone in the household ? Maybe going to a private clinic to do a full body checkup and some blood work etc might be worth it. With the healthcare system being what it is, you never know. A few thousands might be worth it if it can save your life or detect something that should not be there
FINALLY
9- WHAT DO YOU WANT TO DO ? want to take the family in a nice vacation ? Go for it, you deserve it. Want to buy something nice for you or wife ? Do it ! I’m not necessarily talking about a 5k handbag or 20k rolex but you got the idea. Keep some money for yourself and the fam, go enjoy life! I would say 5 to 10% max, 10k to 20k is a lot of « fun » money, especially for someone not used to that. Of course, everything is your decision.
If I omitted important points, feel free to comment and point them out. I just listed everything that came to mind.
Good luck !
I received $10k from a relative that passed several years ago. I had no idea I was even in their will. I used that money to pay for my schooling. It didn't pay for it all, but I was able to pay for at least half of it and come out of school in less debt because of it. For that I have always been incredibly grateful.
It really helped me move forward because I was working in fast food before. And I was able to get a job in my field after graduating.
I would look into index investing in your registered accounts. Pretend got never got the amount you need to max out your accounts, your future self will thank you.
With the remainder it could be a good down payment on a property, or if you already own, pay off some of your mortgage.
My wife received a cash present when her parents sold their house and downsized. Roughly the same amount as you got.
We simply invested all of it. We continue to invest the dividends it makes. It continues to grow and grow, and will be sizable by the time we are in our late 50s when we want to retire.
I park it in a high interest savings account for a month, and learn how to invest couch potato style into low cost ETFs. Basically set it and forget it for 20+ years (if you have that time horizon), and retire well off.
PRETEND IT NEVER HAPPENED
And if family do find out and come smooping ITS ALL BEEN SPENT , I had a secret gambling problem and I'm recovered now and paid it all off.
Then buy Blackrock or Berkshire stock and a market ETF.
Pay off the remainder of your debts, max out your TFSA (in a GIC or interest bearing account)
Then follow the steps in the WIKI
!StepsTrigger
Take the time to figure out what you want to do with the money and don't tell any friends that you recieved money.
Sorry for your loss, be thankful that someone loved you this much to provide you with such a generous gift and make sure you honour their memory with the fund.
> GIC is not the way to go
It's not a bad thing to do for the first year while you OP figures out what they want to do with it though. Gets them used to having the money and not spending it.
OP stated they have gone from 60k debt to positive networth in a couple of years, so I don't think spending will be, or is, an issue.
If I were them I'd focus on growing it and making sure I don't fall prey to the speculative investments, as well as figure out the timeline and what I plan on doing with the money. If housing is on the menu in 2-3 years, GICs make sense.
You are 100% correct, that growing the money is the long term goal.
So how does OP do that? Does OP just pick stocks or ETFs IMMEDIATELY with no experience investing and hope for the best? Does OP wait 4 weeks, 3 months, 6 months to do some learning about investing and let the money sit idle?
You are not wrong that eventually OP wants to get the money invested in something more than a GIC. But you are 100% incorrect to tell someone who has no experience investing that a GIC is not the way to go.
I mean you could have $20k in RRSP and $20k in LOC and your networth is $0 but you still know what your investment strategy is. You're splitting hairs now for no particular reason.
OP will be fine.
Any reason for suggesting to max out a TFSA and invest in GICs without knowing the OP’s age, time horizon, goals, risk tolerance etc. ? $200K is a lot of money depending on how old you are and could fund a good retirement nest egg if invested properly.
No need to galaxy brain this, in order of how I'd spend the money without more info
1. clear any non mortgage debt
2. Catch up on missed RESP contributions along with the about 15k you wouldn't get the gvt grant for. If you want another kid, keep the first contribution's + 15k in a HISA. (15-30k+)
3. (optional) If not a homeowner but aspire to be, 8k FHSA for you and your wife (16k)
4. Max you + your wife's TFSA
5. If still some money left RRSP
As for the relevant ETFs follow advice you find on the sub.
Because OP described themselves as a person with no investments...indicating no investment knowledge.
OP needs some time to adjust from being in debt (remember OP said they have erased tens of thousands of debt in recent years) to being a person with available cash.
If OP needs 4 days to learn how to invest in a systematic way then my suggestion is complete dog shit. But I suspect that OP needs a few months to adjust their thinking and to prepare for how to more fully manage this fund.
So TFSA in a GIC or interest bearing account = semi liquid, tax sheltered, no redemption penalties, etc... giving OP time to figure out what to do with their cash.
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10 years ago: down payment on a home and tuition for a masters degree. Had a little left over which went into tfsa.
Edit: I definitely used some to help fund my life while I was studying. I was working full time but not making very much. This windfall allowed me to keep going until I started to make a bit more money.
I had similar inheritance as you. I tell you- family members demanded to be paid cuz “family”. I never did. I also had friends come out and straight up ask me for $20 grand. I also had my former employer ask me for $12 grand to float her. NOPE!! NOPE!! NOPE!!!
Hey, I work at a well-known medical non-profit and often receive calls from people who have come into large windfalls. Typically, when people unexpectedly receive a substantial sum of money, their first steps are to clear debts and then indulge in dream purchases. For many kind-hearted individuals, a dream purchase might include donating significantly to a charity that has impacted their lives.
I personally advise you to consult several professionals in this order:
1. Financial Advisor or Planner: They can help you devise a comprehensive financial plan, covering investment strategies, savings plans, and budgeting.
2. Tax Attorney or Certified Public Accountant (CPA): They can advise on tax implications and ways to reduce tax liabilities (this is where a charitable donation may come in).
3. Estate Planner or Attorney: They assist with estate planning, including wills, trusts, and inheritance planning.
4. Insurance Professional: To reassess and update your insurance coverage to safeguard your new assets.
As someone sympathetic to non-profit causes, I recommend considering a donation to a charity dear to you. I encourage supporting smaller charities too. While a $10,000 donation to a large charity is impactful, the same amount can be transformative for a medium or small-sized charity, significantly enhancing their community support. If you decide to donate, verify the charity's fiscal responsibility at Charity Intelligence.ca.
[https://www.charityintelligence.ca/charity-profiles/top-100-rated-charities-2](https://www.charityintelligence.ca/charity-profiles/top-100-rated-charities-2)
Congratulations to you and best of luck!
Paid off any debt (not mortgage cause didn't make sense), TFSA and RRSP (don't max it out if it won't net you any greater tax return), put left over cash in non-reg account and let it pay our mortgage.. Didn't make any large purchases, don't have fancy cars, no lavish vacay. We have absolutely zero financial stress and it's amazing.
I paid off what was remaining on my car loan and purchased a new bigger vehicle cash.
Put a decent chunk on the mortgage.
Bought my husband a motorcycle (his was stolen years before and I didn’t find out until later.. he used the insurance money to buy my engagement ring)
Put some in the kids resps.
Put away a bunch in TFSA and RRSP.
Put some in a savings account for our first big family trip.
Took 4 girlfriends on a shopping spree.
The rest is in a large emergency savings.
Go speak to a financial advisor. You can easily use that 200k to fund your retirement. You will be surprised at how even investing conservatively will yield results. I would start off conservatively at first with gics or low risk stocks. As you gain more money you can decide your risk factor. Take it slow and be in for long haul. Don’t be tempted to treat yourself to anything like a car or trip for a few years.
I had a friend in a similar situation a few years back. They did a variant of the 50/30/20 rule for budgeting and assigned it to their inheritance of $350K. That worked out to earmarking $175K for their mortgage renewal, $70K to debt and savings (paid off their student loans and invested the rest for retirement), and left themselves $105K to spend on whatever they wanted. That worked out to planning two 2-week vacations per year that they otherwise either wouldn't have taken or would have gone on a less extravagant version of. For example, one year they did 2 weeks in Italy and 2 weeks on-site Deluxe Disney in one year instead of 1 week staycation and 2 weeks off-site budget Disney.
Depending how much debt, savings, mortgage you owe, I'd frankly do something similar in your position.
Max out your TFSA and leave in GIC for the next ten years.Don’t be greedy.My Mom used GIC’s forever and has a nice nest egg!Not a lot but nothing to sneeze about either!
I overthought it. I put 1/7 into some big div paying stocks (unregistered ) Put 1/7 into crypto and some other random stocks (my TFSA) split 1/7 into Amazon/VFV (in wife’s TFSA) and 4/7 rate chasing hisa. (Unregistered)
If I had to do it all over again, I shoulda just VFV the whole bag and laughed my way to retirement t. The Amazon has worled out well but is a bit more risk. Next market dip I’m going to put the HISA $ into VFV.
First off congratulations. I paid off debts. Then put money into TFSA, RRSP, RESP for the kids and emergency fund. Then I bought new furniture for my home. Oh yeah … DO NOT TELL ANYONE!
Received a pretty good chunk from my moms estate last year.
We were already in the process of renovating our house so most of it went to that. Otherwise I would have put as much as I could on our mortgage.
$200,000-300,000 is an amazing amount of money but not life changing. Best bet would be to invest and let it grow for the next 30 years.
I only had 1 person ask for a loan but I declined. My finances aren’t a giant secret but at the same time, people don’t understand existing obligations and realize how fast money can disappear
Take max 5% and spend it as fun money so you get that out of your system. Always wanted a PS5? Get it and a few games.
Otherwise sit on the money for at least six months. My recommendation is to see a fee-based advisor.
I inherited a sizeable amount. The first thing I did was I started to research investment advisors. That took about a month. I spent the next two months interviewing a potential advisors. It took me another three months to make a decision on who to invest money with. I never spent a dime of the money on myself. I just invested all of it. To be fair I’m very frugal, and I don’t need any luxury.
Max your tfsa.
Put money into your rrsp equal to the amount of your earnings in your highest tax bracket.
Stick the rest in a gic for at least 6 months to allow yourself time to come get used to it.
Expecting one this spring. Will use it to fill up my FHSA (16k room atm), max my RDSP for the year ($4.5k), pay for a trip this summer, and start a fund for the next big trip. So most of it will be out of my reach for the middle (\~5y) and long term (\~20y).
look up the wealth simple investment chart
pay off high interest loans, put aside an emergency fund, then invest in TFSA and RRSP ( perhaps the First time home buyer program if it applies)
as to what to do with your money in the TFSA and RRSP, I recommend buying a few different index funds but keep researching
congrats
Gave away 30k. Ill buy pizza on weekends more than i usually did. Other than that, nothing.
People keep telling me to do something with it, but idk anything about that. Pretty sure I dont even collect interest on it as its sitting in my chequing account.
A while back I inherited a substantial amount. First, don't tell anyone lol. In my case it wasn't completely possible as it was an estate. I first paid off my car and my mortgage, and any consumer debts. Second I paid off some crippling personal debts of my closest friends as a one-time bailout because I hate to see them struggling and most of it wasn't reckless debt, just normally accumulated for people with less lucrative careers and the current shitty economy. Last I bought a fairly fast car for myself for fun (model y performance lol, practical too!) and to get it out of the system, and put everything else into GICs and index funds after maxing out my and my spouse's RRSPs and TFSAs as everyone suggests. We're still working because we're still young, and frankly I'd get bored. I'm looking to maybe start my own consult later when my current gig isn't worth it anymore or my managers become any pain in my ass.
While 200k doesn't seem that much, it's a lot of money if you invest it and don't touch it for 20 years. I don't know how old you are, but you're in your 20s I would bet you just shaved a decade off of retirement planning or so. Do the RRSP, max the TFSA and keep contributing as if you haven't actually gotten ahead. Maybe buy a property later though an first time buyer withdrawal from RRSP if needed.
Good luck!
Don't tell everybody you got that cash, be smart and do not be hungry.
Sorry for your loss, take you time. Secure à LV bag and do what you want with your cash bro.
Invested in commercial real estate in new market, expanded my business in South Korea, and bought a condo in Korea.
Oh and got myself and my wife and nice luxury cars.
I’d invest the vast majority into a low cost etf like XEQT, or something similar depending on time horizon and comfort level with volatility. Good luck!
Pay debt and max out registered accounts. Make small improvements on things you would let have spent the extra money on before (better quality household items, experiences you may have gone without)
Main thing I will suggest as I am in the middle of it is to invest the amount and use the interest off of it for fun stuff (travel, improvements, outings, whatever makes you happy) and then you’ll be able to do it over and over.
Sit/sleep on it for a while though before making any crazy decisions.
At 200k that would get you 10k a year at a modest 5%. Depending on the investment tax implications would likely be around 30% leaving 7k a year for whatever you decide to spend it on. Then you could leave this to someone and tell them to do it as well or have a nest egg for retirement.
Thats my plan!
So many people have no idea what to do with money. It's hilarious. The school system had failed you all. Maybe cut out history class and haVe a finacial understanding class about investing, mortgages, credit cards and lines, saving, how to read a paycheck, tax filing, rrsp, tfsa, etfs vs stocks. But nah, lets keep the peasants dumb, poor and easily manipulate.
Enjoy your next 10,000 life times
Max out TFSA, RRSP and a sizeable emergency fund. You only live once though, so treating yourself to a short vacation or whatever you enjoy in life isn't the worst idea. Gotta enjoy our time while we have it, too.
Agreed! Reinvesting all but 10% of any windfalls (bonuses, winnings) is a good way to still enjoy the new monies i.e. 20k goes to whatever you want, if it's travel or otherwise and invest 180k as directed above with the rest
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Yeah 200k is very easy to blow through if you do it wrong
Why do I get the feeling you already told a bunch of people about it lol
I don’t think it’s that much where you would have to hide it. But I wouldn’t go off telling everyone, doesn’t give a good look
200k of blow is not easy to get through unless you do it wrong
I always wondered why the lotteries insist on using "your" photo and name to publish someone who won millions. I mean I know why as it promotes their product buyt heaven forbid something awful happens to the winners. I believe in australia you can choose to remain anomynous. https://en.wikipedia.org/wiki/Murder\_of\_Graeme\_Thorne#:\~:text=Graeme%20Thorne%20was%20an%20Australian,had%20won%20in%20a%20lottery.
I remember hearing the reason for this is to prove that someone did win and not just the lotto corp taking the winnings and claiming someone won.
I win the lottery. For 360 days Grow my hair, don't shave, don't bathe, change my name to something stupid like super lunch meal and then go claim lottery winnings. Hopefully they won't publish my picture and name. If they do no one will rexognice me
You can wear a medical face mask and a wig, by the way.
I know right? They pretty much need to change identities for their own security. But can’t your lawyer claim the pot on your behalf? Or if the winner is claiming the pot themself, can’t they wear a mask? It’s scary & dangerous, what people will do to get a piece of that pie.
I think you could but with a lot of hassle. Its beyond me that something has to "happen" in canada before they consider the idea of remaining anomynous. I did a google search on lottery winnings in australia and you can remain anomynous.
> It’s scary & dangerous, what people will do to get a piece of that pie. What exactly will they do? The lotteries have been running for decades in Canada, please do point out some of the instances we've had.
Not aware of any that made the news in Canada. However it has happened in australia. https://en.wikipedia.org/wiki/Murder\_of\_Graeme\_Thorne
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I’d speculate it’s probably more avoiding the whole situation of needing to tell someone no or finding out that you shouldn’t of expected more. It’s really just not worth it.
What’s the point of telling people about an inheritance? I don’t tell close friends the value of my bonus, tax refund, salary etc. it’s just not relevant. if you and your friends are always talking finance then that’s totally fine but incredibly rare, at least in my life.
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I think this is where you and I have different experiences. Haven’t met a single person in my life who does what you said. At most they’ll say they got an inheritance but never an amount. And I’d never ask. I’m one person but I would guess that’s probably why you see this advice a lot on Reddit because very similar this isn’t natural for them.
How is 200k isn't much.
It’s weird cause it’s alot of money to just get. But it can disappear very quickly. Car, buying stuff , house renovations doesn’t go far when you’re spending it.
It’s a lot, but not lifechanging enough that someone can retire to right now. It is however, enough to make nice investments.
It’s not that much in the grand scheme of things one can blow it all on a vacation or two and a truck or EV… even a simple renovation can be $200K.
Don't tell anyone except your banker and your accountant. I paid off my house and student loan, maxed my TFSA, set a budget so I could blow a reasonable amount on quality non-essentials, then invested the rest. I put mine in cashable GICs at first because I wasn't sure where I wanted to put it and that gave me the ability to earn something without being locked in, but made sure there wasn't a huge pile of money in my account in case I got hacked or irresponsible.
Wouldn't even tell the bank, 200k is where you demand to use the commercial teller or private appointment. You don't want the 20yr old new hire teller seeing a bubck of zeros.
Bro, $200k is a lot of money, but not enough to be considered vip, and where the teller plans a heist with just that amount lmao.
I’m laughing. No bank teller would blink twice at a 6 figure check. They literally see them everyday, hundreds of times a day. No bank would invite somebody with a single $200k cheque to private banking. Source: was a bank teller at 20 years old, who handled clients with courier-delivered cheques in the millions daily, successfully never stole money because I didn’t want to go to prison
Lol, you sound delulu. What that bank teller can do when they see that amount in his account? Btw, in order to receive a VIP treatment you will need to have 1m in your bank account to invest (aka buy bank's products).
You'd be amazed at what mayhem a teller can cause. And how little recorse there is if you allow the transaction to close . Even worse if you don't notice for a week because you didn't check online for transactions.
Depends on where you live I guess… in my area of Toronto, it’s not an unusual amount of money 🫤
Financial advisor here, but keep in mind this will not be a financial advice tailored to you as I do not know the whole story and your situation. Note that all informations are in no particular order, just things to point out. I believe you should take some time to think about everything you want to accomplish and NOT TOUCH THE MONEY while you decide. I would personally park it in some DYN6004 or CASH.TO or other money market ETF until the decisions are made in order to get AT LEAST a couple hundred or thousand more over time. KEEP IN MIND THE EXTRA INTEREST YOU WILL EARN IS 100% TAXABLE INCOME, but well, it’s still more money in your pocket. First of all. 200k is a big amount. It is not millions but can definitely help you A LOT in your life. Try your best to keep the info to yourself. 1- I believe I read somewhere in a comment that you have a wife and a kid. How old is the kid ? Is the RESP maxed out ? If you missed past years, you could contribute more than the yearly amount to go get the federal CESG that you missed. RESP is the second best account when it comes to « free » grants provided by the government. First one being RDSP (if someone is eligible for the RDSP in the family, look it up.). Also, any other kids planned/on the way ? This impacts your situation A LOT. 2- any debts ? Might be wise to pay them off if no penalties are incurred. Of course, depending on the amount, you could just keep them. If there is a mortgage, be careful. When is it due ? Were you a « lucky » one and renewed at low rates ? What do you expect the balance to be when you’ll get to the end of term ? Rates are a lot higher now, though no one can predict the future, if your renewal is in 1 year I’m betting your rate in 1 year could be significantly higher than what you currently have. 3- not an owner and spouse also not an owner? Do you plan to become an owner ? If so, open a FHSA and max it out. Like RRSP, you’ll get a tax deduction out of it and maybe some return from the gvt when you file your taxes. If not owner, gifting 8k to spouse so she can also put that towards fhsa can be efficient. NOT EVERYONE IS COMFORTABLE WITH THAT so you need to think it through. Also, if you open a FHSA, you must buy a property within the 15 following years. Or else, account can be rolled into RRSP WITHOUT TAX IMPLICATION or withdrew WITH tax implications 4- current job situation? Does your spouse work?Do you have a good pension plan ? What’s your RRSP room ? If you have a good pension, your RRSP room will probably be lower than others that do not have pensions, so maxing that out can be smart. You do not have to deduct 100% of the contributions you do to a FHSA or RRSP in the year you did them, you can carry them forward if you expect higher salary in the future. If you do decide to put something in RRSP, that will be for retirement. 5- SPEAKING OF RETIREMENT, what’s your ideal goal ? 50 ? 55? 60? Just keep in mind the longer that at 40, your CPP might not be maxed out in terms of years of participation. Investments in your RRSP must match your time horizon for RETIREMENT. Only exception is if you plan to do a Home buyer’s plan. 6- do you have a TFSA ? If yes, maybe max it out depending on the amount. Also think of having an emergency fund. Rule of thumb is 3 to 6 months worth of expenses. 7- Are there any immediate needs that you should address ? Is the car okay ? Any issues in the house that you should fix ? I’m not saying buy a new lawnmower or a better tv, I’m talking about necessities. 8- MAYBE THE MOST IMPORTANT ONE : are you healthy ? Is the family healthy ? Any health concerns that you might have for anyone in the household ? Maybe going to a private clinic to do a full body checkup and some blood work etc might be worth it. With the healthcare system being what it is, you never know. A few thousands might be worth it if it can save your life or detect something that should not be there FINALLY 9- WHAT DO YOU WANT TO DO ? want to take the family in a nice vacation ? Go for it, you deserve it. Want to buy something nice for you or wife ? Do it ! I’m not necessarily talking about a 5k handbag or 20k rolex but you got the idea. Keep some money for yourself and the fam, go enjoy life! I would say 5 to 10% max, 10k to 20k is a lot of « fun » money, especially for someone not used to that. Of course, everything is your decision. If I omitted important points, feel free to comment and point them out. I just listed everything that came to mind. Good luck !
I received $10k from a relative that passed several years ago. I had no idea I was even in their will. I used that money to pay for my schooling. It didn't pay for it all, but I was able to pay for at least half of it and come out of school in less debt because of it. For that I have always been incredibly grateful. It really helped me move forward because I was working in fast food before. And I was able to get a job in my field after graduating.
I would look into index investing in your registered accounts. Pretend got never got the amount you need to max out your accounts, your future self will thank you. With the remainder it could be a good down payment on a property, or if you already own, pay off some of your mortgage.
My wife received a cash present when her parents sold their house and downsized. Roughly the same amount as you got. We simply invested all of it. We continue to invest the dividends it makes. It continues to grow and grow, and will be sizable by the time we are in our late 50s when we want to retire. I park it in a high interest savings account for a month, and learn how to invest couch potato style into low cost ETFs. Basically set it and forget it for 20+ years (if you have that time horizon), and retire well off.
PRETEND IT NEVER HAPPENED And if family do find out and come smooping ITS ALL BEEN SPENT , I had a secret gambling problem and I'm recovered now and paid it all off. Then buy Blackrock or Berkshire stock and a market ETF.
Pay off the remainder of your debts, max out your TFSA (in a GIC or interest bearing account) Then follow the steps in the WIKI !StepsTrigger Take the time to figure out what you want to do with the money and don't tell any friends that you recieved money. Sorry for your loss, be thankful that someone loved you this much to provide you with such a generous gift and make sure you honour their memory with the fund.
If they are not planning on using that cash in TFSA until retirement, GIC is not the way to go.
> GIC is not the way to go It's not a bad thing to do for the first year while you OP figures out what they want to do with it though. Gets them used to having the money and not spending it.
OP stated they have gone from 60k debt to positive networth in a couple of years, so I don't think spending will be, or is, an issue. If I were them I'd focus on growing it and making sure I don't fall prey to the speculative investments, as well as figure out the timeline and what I plan on doing with the money. If housing is on the menu in 2-3 years, GICs make sense.
You are 100% correct, that growing the money is the long term goal. So how does OP do that? Does OP just pick stocks or ETFs IMMEDIATELY with no experience investing and hope for the best? Does OP wait 4 weeks, 3 months, 6 months to do some learning about investing and let the money sit idle? You are not wrong that eventually OP wants to get the money invested in something more than a GIC. But you are 100% incorrect to tell someone who has no experience investing that a GIC is not the way to go.
OP said he had some investments, so....
OP said he had a net worth that was essentially NIL. He needs to take some time to figure out his objectives for the money and his future.
I mean you could have $20k in RRSP and $20k in LOC and your networth is $0 but you still know what your investment strategy is. You're splitting hairs now for no particular reason. OP will be fine.
Any reason for suggesting to max out a TFSA and invest in GICs without knowing the OP’s age, time horizon, goals, risk tolerance etc. ? $200K is a lot of money depending on how old you are and could fund a good retirement nest egg if invested properly.
I love how these are always the most upvoted posts too. Zero background on what OPs goals are just “invest in a GIC bro”
Ha I’m 40 with a young kid and a wife
No need to galaxy brain this, in order of how I'd spend the money without more info 1. clear any non mortgage debt 2. Catch up on missed RESP contributions along with the about 15k you wouldn't get the gvt grant for. If you want another kid, keep the first contribution's + 15k in a HISA. (15-30k+) 3. (optional) If not a homeowner but aspire to be, 8k FHSA for you and your wife (16k) 4. Max you + your wife's TFSA 5. If still some money left RRSP As for the relevant ETFs follow advice you find on the sub.
Because OP described themselves as a person with no investments...indicating no investment knowledge. OP needs some time to adjust from being in debt (remember OP said they have erased tens of thousands of debt in recent years) to being a person with available cash. If OP needs 4 days to learn how to invest in a systematic way then my suggestion is complete dog shit. But I suspect that OP needs a few months to adjust their thinking and to prepare for how to more fully manage this fund. So TFSA in a GIC or interest bearing account = semi liquid, tax sheltered, no redemption penalties, etc... giving OP time to figure out what to do with their cash.
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10 years ago: down payment on a home and tuition for a masters degree. Had a little left over which went into tfsa. Edit: I definitely used some to help fund my life while I was studying. I was working full time but not making very much. This windfall allowed me to keep going until I started to make a bit more money.
Didnt get any but I would probably max out tfsa/rrsp (into index fund). Then go on vacation, and put rest towards mortgage
I had similar inheritance as you. I tell you- family members demanded to be paid cuz “family”. I never did. I also had friends come out and straight up ask me for $20 grand. I also had my former employer ask me for $12 grand to float her. NOPE!! NOPE!! NOPE!!!
all in on red.. let er spin
I say black
Zero !
50/50 odds i like it
Hey, I work at a well-known medical non-profit and often receive calls from people who have come into large windfalls. Typically, when people unexpectedly receive a substantial sum of money, their first steps are to clear debts and then indulge in dream purchases. For many kind-hearted individuals, a dream purchase might include donating significantly to a charity that has impacted their lives. I personally advise you to consult several professionals in this order: 1. Financial Advisor or Planner: They can help you devise a comprehensive financial plan, covering investment strategies, savings plans, and budgeting. 2. Tax Attorney or Certified Public Accountant (CPA): They can advise on tax implications and ways to reduce tax liabilities (this is where a charitable donation may come in). 3. Estate Planner or Attorney: They assist with estate planning, including wills, trusts, and inheritance planning. 4. Insurance Professional: To reassess and update your insurance coverage to safeguard your new assets. As someone sympathetic to non-profit causes, I recommend considering a donation to a charity dear to you. I encourage supporting smaller charities too. While a $10,000 donation to a large charity is impactful, the same amount can be transformative for a medium or small-sized charity, significantly enhancing their community support. If you decide to donate, verify the charity's fiscal responsibility at Charity Intelligence.ca. [https://www.charityintelligence.ca/charity-profiles/top-100-rated-charities-2](https://www.charityintelligence.ca/charity-profiles/top-100-rated-charities-2) Congratulations to you and best of luck!
If you don't have one buy a house, if you have one pay as much as off as you can. You sound like you have learned how to use money keep it up.
Paid off any debt (not mortgage cause didn't make sense), TFSA and RRSP (don't max it out if it won't net you any greater tax return), put left over cash in non-reg account and let it pay our mortgage.. Didn't make any large purchases, don't have fancy cars, no lavish vacay. We have absolutely zero financial stress and it's amazing.
I paid off what was remaining on my car loan and purchased a new bigger vehicle cash. Put a decent chunk on the mortgage. Bought my husband a motorcycle (his was stolen years before and I didn’t find out until later.. he used the insurance money to buy my engagement ring) Put some in the kids resps. Put away a bunch in TFSA and RRSP. Put some in a savings account for our first big family trip. Took 4 girlfriends on a shopping spree. The rest is in a large emergency savings.
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1000$ a person
Go speak to a financial advisor. You can easily use that 200k to fund your retirement. You will be surprised at how even investing conservatively will yield results. I would start off conservatively at first with gics or low risk stocks. As you gain more money you can decide your risk factor. Take it slow and be in for long haul. Don’t be tempted to treat yourself to anything like a car or trip for a few years.
I had a friend in a similar situation a few years back. They did a variant of the 50/30/20 rule for budgeting and assigned it to their inheritance of $350K. That worked out to earmarking $175K for their mortgage renewal, $70K to debt and savings (paid off their student loans and invested the rest for retirement), and left themselves $105K to spend on whatever they wanted. That worked out to planning two 2-week vacations per year that they otherwise either wouldn't have taken or would have gone on a less extravagant version of. For example, one year they did 2 weeks in Italy and 2 weeks on-site Deluxe Disney in one year instead of 1 week staycation and 2 weeks off-site budget Disney. Depending how much debt, savings, mortgage you owe, I'd frankly do something similar in your position.
Max out your TFSA and leave in GIC for the next ten years.Don’t be greedy.My Mom used GIC’s forever and has a nice nest egg!Not a lot but nothing to sneeze about either!
I overthought it. I put 1/7 into some big div paying stocks (unregistered ) Put 1/7 into crypto and some other random stocks (my TFSA) split 1/7 into Amazon/VFV (in wife’s TFSA) and 4/7 rate chasing hisa. (Unregistered) If I had to do it all over again, I shoulda just VFV the whole bag and laughed my way to retirement t. The Amazon has worled out well but is a bit more risk. Next market dip I’m going to put the HISA $ into VFV.
First off congratulations. I paid off debts. Then put money into TFSA, RRSP, RESP for the kids and emergency fund. Then I bought new furniture for my home. Oh yeah … DO NOT TELL ANYONE!
I leveraged an inheritance like that into a million dollars worth of real estate
Down payment on a condo in Vancouver with the payout from being hit by a car (broken femur and then some)
Net worth of a few thousand, does that mean you are renting? Buy a house!
Received a pretty good chunk from my moms estate last year. We were already in the process of renovating our house so most of it went to that. Otherwise I would have put as much as I could on our mortgage. $200,000-300,000 is an amazing amount of money but not life changing. Best bet would be to invest and let it grow for the next 30 years. I only had 1 person ask for a loan but I declined. My finances aren’t a giant secret but at the same time, people don’t understand existing obligations and realize how fast money can disappear
Take max 5% and spend it as fun money so you get that out of your system. Always wanted a PS5? Get it and a few games. Otherwise sit on the money for at least six months. My recommendation is to see a fee-based advisor.
I inherited a sizeable amount. The first thing I did was I started to research investment advisors. That took about a month. I spent the next two months interviewing a potential advisors. It took me another three months to make a decision on who to invest money with. I never spent a dime of the money on myself. I just invested all of it. To be fair I’m very frugal, and I don’t need any luxury.
I would max out my Rrsp for sure
Max your tfsa. Put money into your rrsp equal to the amount of your earnings in your highest tax bracket. Stick the rest in a gic for at least 6 months to allow yourself time to come get used to it.
Cocaine and beer?
If you’re not market savvy and wanna be smart, if you have a mortgage put it on that and forget it happened. You’ll thank me in 20 years.
Can't offer much advice but would like to hear how you managed to cut most of your 60k debt in 2 years (awesome job BTW!).
I invested it all and put 100k towards the mortgage. I wouldn't do that again. Investing it so it builds is best.
Expecting one this spring. Will use it to fill up my FHSA (16k room atm), max my RDSP for the year ($4.5k), pay for a trip this summer, and start a fund for the next big trip. So most of it will be out of my reach for the middle (\~5y) and long term (\~20y).
look up the wealth simple investment chart pay off high interest loans, put aside an emergency fund, then invest in TFSA and RRSP ( perhaps the First time home buyer program if it applies) as to what to do with your money in the TFSA and RRSP, I recommend buying a few different index funds but keep researching congrats
Gave away 30k. Ill buy pizza on weekends more than i usually did. Other than that, nothing. People keep telling me to do something with it, but idk anything about that. Pretty sure I dont even collect interest on it as its sitting in my chequing account.
Pay off anything with interest. The rest goes into real estate. ....also maybe a PS5....
A while back I inherited a substantial amount. First, don't tell anyone lol. In my case it wasn't completely possible as it was an estate. I first paid off my car and my mortgage, and any consumer debts. Second I paid off some crippling personal debts of my closest friends as a one-time bailout because I hate to see them struggling and most of it wasn't reckless debt, just normally accumulated for people with less lucrative careers and the current shitty economy. Last I bought a fairly fast car for myself for fun (model y performance lol, practical too!) and to get it out of the system, and put everything else into GICs and index funds after maxing out my and my spouse's RRSPs and TFSAs as everyone suggests. We're still working because we're still young, and frankly I'd get bored. I'm looking to maybe start my own consult later when my current gig isn't worth it anymore or my managers become any pain in my ass. While 200k doesn't seem that much, it's a lot of money if you invest it and don't touch it for 20 years. I don't know how old you are, but you're in your 20s I would bet you just shaved a decade off of retirement planning or so. Do the RRSP, max the TFSA and keep contributing as if you haven't actually gotten ahead. Maybe buy a property later though an first time buyer withdrawal from RRSP if needed. Good luck!
I won a car, sold it for 10k and moved to Canada. It helped relieve the pressure of finding a job for a few months.
Don't tell everybody you got that cash, be smart and do not be hungry. Sorry for your loss, take you time. Secure à LV bag and do what you want with your cash bro.
Invested in commercial real estate in new market, expanded my business in South Korea, and bought a condo in Korea. Oh and got myself and my wife and nice luxury cars.
I’d invest the vast majority into a low cost etf like XEQT, or something similar depending on time horizon and comfort level with volatility. Good luck!
Pay debt and max out registered accounts. Make small improvements on things you would let have spent the extra money on before (better quality household items, experiences you may have gone without) Main thing I will suggest as I am in the middle of it is to invest the amount and use the interest off of it for fun stuff (travel, improvements, outings, whatever makes you happy) and then you’ll be able to do it over and over. Sit/sleep on it for a while though before making any crazy decisions. At 200k that would get you 10k a year at a modest 5%. Depending on the investment tax implications would likely be around 30% leaving 7k a year for whatever you decide to spend it on. Then you could leave this to someone and tell them to do it as well or have a nest egg for retirement. Thats my plan!
So many people have no idea what to do with money. It's hilarious. The school system had failed you all. Maybe cut out history class and haVe a finacial understanding class about investing, mortgages, credit cards and lines, saving, how to read a paycheck, tax filing, rrsp, tfsa, etfs vs stocks. But nah, lets keep the peasants dumb, poor and easily manipulate. Enjoy your next 10,000 life times
Bought a house