Investing for retired mother in law

[JimNasium]

My mother in law recently sold some land, so she has come into a bit of a windfall from it. My wife is asking me for investing advice. It seems like such a waste to just have it sitting in a bank, so I’m wondering what your guys advice would be.

The situation as far as a I know it:

Mother in law, about 65 years old. Her husband recently passed, so they are starting to sell off some of the property they had. She has her own house fully paid off, and, like a lot of the older generation here, is extremely insured. I wasn’t told how much she sold the land for, but if I had to guess I would say between 700-800万円. She has a decent pension and a low cost of living.

So what would your advice be to do with it? She’s retired, so I’m not sure if it’s the right move to invest it. If she does decide to invest, should she just set up a regular investment fund? Or wait until NISA changes next year and max it out until the amount is fully invested? Also, what do you think a proper stock to bond ratio should be for someone retired?

[beanhead]

Probably best to try and understand her attitude to risk before you suggest anything. If she has no experience with investing, it may not be a good idea to recommend products which are somewhat volatile.

[Beaglehound]

Probably best to try and understand her attitude to risk before you suggest anything. If she has no experience with investing, it may not be a good idea to recommend products which are somewhat volatile.

This, plus what the main purpose is: to provide cash which she will need soon? To provide cash which she will (or may) need further down the line? Or to preserve/increase capital to pass on through inheritance?

[RetireJapan]

Personally I would be very wary of getting involved.

People who don't understand something often react badly to setbacks.

As others have said, what is the purpose? For many people, if they can live off their pension having some cash in the bank is basically an emergency fund.

This is what my wife's parents have basically. Enough pension income to live comfortable, a fair amount of money in the bank in cash, no investments. They are in their 90s though.

I would recommend the MIL reads a book or two. This might be a good fit (after all, 65 is the new 50, right?): https://amzn.to/3kIAcvc

If she is not willing to do that she probably shouldn't be investing her money, and doing it for her is likely to cause problems down the line.

[captainspoke]

Similar to the comments on cash in the bank, and in contrast to the side of things where your might 'get involved' in a financial planner/advisor kind of role...

...it's probably equally or more important to protect against things like poor advice (buying various insurance products), bad advice (let us churn your money away in our stock picks), and outright scams.

[sutebayashi]

My mother in law recently sold some land, so she has come into a bit of a windfall from it. My wife is asking me for investing advice.

Most important is what your MIL wants and her overall position, which sounds comfortable from what you note.

If she is happy to stash it under a mattress, that’s her business.

If she doesn’t need the money and would hand it down when she passes away in the distant future, maybe she should gift a share to you both and then you can invest it according to your future needs directly.

Or something in between, but if it’s to remain her money she had better be comfortable handling it by herself.

[Bubblegun]

If it they didn't ask, and her direct family aren't interested, I would let them enjoy the cash. Nothing worse than giving advice and they end up loosing money. A lot of animosity could come raining down, and bring stress into YOUR MARRIAGE. For me the marriage would be the best investment for you, the wife and the MIL..

[JimNasium]

Thanks for the advice everyone. Lots to think about here. I’m worried about, like captainspoke said, her getting bad/predatory advice, so I want to steer them in the right direction.

[Gulliver]

For the amateur Japanese investor finding an easy/profitable investment is difficult right now.

Is there anywhere your mother-in-law has always dreamed of going? A luxury family vacation to somewhere like Hawaii, for example, could be seen as an investment in family unity and happiness.

[beanhead]

Thanks for the advice everyone. Lots to think about here. I’m worried about, like captainspoke said, her getting bad/predatory advice, so I want to steer them in the right direction.

This makes sense. Also, as RJ alluded to, at 65 she could live another 20 years or more.
So keeping everything in cash is probably not going to be the best idea if she is around for another 2 or 3 decades. But she needs to come to that realization herself, I feel, rather than being pushed there by you or your wife.
Delicacy is needed.