Hi all,
I'm asking the following questions on behalf of my parents who are very hard workers but unfortunately were not provided with the education to learn about how to best manage their finances, as they have spent their whole lives fighting to survive. They are currently assessing their options as they are both retired and have no income. They have spoken to a "financial advisor" who has told them to stay away from property but would like to hear your thoughts on their situation so they know what other options are out there:
- 55 and 64 years old
- Both retired (one is establishing a business at present but nothing stable)
- Own PPOR - worth $1.3M
- $250k cash
- No income streams
They would like to use their equity to create a passive income but are unsure of how to do this and if it is possible given they have no income at present. I assume equity is as good as cash and they could possibly go out and buy a high yielding commercial property in cash/equity?
Also, to throw another spanner in the works, one of my parents is in a court case which has been dragging on for some years. Against my advice, they will not drop the case as there is literally nothing to gain, but on principal they will not drop it as they have been hard-done by. They have mentioned they would like to mortgage the PPOR so that if the other party sues back then they cannot get anything. However, my understanding is that if there is a mortgage then the house would have to be sold, with the funds owing to the bank paid, with the remaining funds going to the other party? So mortgaging the property makes no difference to this.. I have told them to speak to their accountant and lawyer but it wouldn't hurt to gather your thoughts on this also...
I have established my investment strategy and done plenty of research pertaining to this but unfortunately none of this information helps with regards to my parents' situation. My parents do not have the capacity to research this themselves; unfortunately because they are so warm-hearted, they are often taken advantage of and I would like to do all I possibly can to guide them to ensure that they have not worked all their lives only for it to be wasted away because of bad advice or someone else's ulterior motive.
Any help would be much appreciated on this one.
John
I'm asking the following questions on behalf of my parents who are very hard workers but unfortunately were not provided with the education to learn about how to best manage their finances, as they have spent their whole lives fighting to survive. They are currently assessing their options as they are both retired and have no income. They have spoken to a "financial advisor" who has told them to stay away from property but would like to hear your thoughts on their situation so they know what other options are out there:
- 55 and 64 years old
- Both retired (one is establishing a business at present but nothing stable)
- Own PPOR - worth $1.3M
- $250k cash
- No income streams
They would like to use their equity to create a passive income but are unsure of how to do this and if it is possible given they have no income at present. I assume equity is as good as cash and they could possibly go out and buy a high yielding commercial property in cash/equity?
Also, to throw another spanner in the works, one of my parents is in a court case which has been dragging on for some years. Against my advice, they will not drop the case as there is literally nothing to gain, but on principal they will not drop it as they have been hard-done by. They have mentioned they would like to mortgage the PPOR so that if the other party sues back then they cannot get anything. However, my understanding is that if there is a mortgage then the house would have to be sold, with the funds owing to the bank paid, with the remaining funds going to the other party? So mortgaging the property makes no difference to this.. I have told them to speak to their accountant and lawyer but it wouldn't hurt to gather your thoughts on this also...
I have established my investment strategy and done plenty of research pertaining to this but unfortunately none of this information helps with regards to my parents' situation. My parents do not have the capacity to research this themselves; unfortunately because they are so warm-hearted, they are often taken advantage of and I would like to do all I possibly can to guide them to ensure that they have not worked all their lives only for it to be wasted away because of bad advice or someone else's ulterior motive.
Any help would be much appreciated on this one.
John