InvestorQ : Where should I invest the excess money my parents have in their hands after retirement?
krithika Saxena made post

Where should I invest the excess money my parents have in their hands after retirement?

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Anisha Awate answered.
6 months ago

Well, to be honest, one thing that you should avoid doing with your parents’ money shall be, not to treat it as one of your money managing projects. It is best that the money your parents have shall be invested by them, as these decisions are crucial.

However, it is not wrong being a helping hand to your parents, this simply means that you can offer them your advice and guide them along the journey to choose the right investment option for them. For this, you need to understand all the available options along with their pros and cons and accept one thing that not every investment is suitable to all. So, you will have to choose the options accordingly.

You have to be extra careful and not jeopardize their investment with your hefty investment choices.

Here are a few of the reasons why you should avoid doing it:

  1. The risk appetite of your parents is not as same as yours. For eg, you may consider volatility in your portfolio as a great exposure, however, for a retiree, this should not be a good choice. For you, a conservative portfolio may mean 70% equity, but for your parents, it could be even 20% equity. And people who are closer to retirement generally prefer fixed deposits as the safest investment option.
  2. It is always easier to put someone else’s money at risk rather than own money, be it of our parents. Yes! You read it right, no matter how prudent is, we are extra cautious about our things and less careful for others’. So, choose wisely and if you can’t decide the best, let a professional take over for you.
  3. Your parents might hesitate in asking you about how their portfolio is performing.
  4. If you lose their money, it would hit them hard.

So, what you should do is, assist them in choosing the best investment option for them and provide the best help you can, just do not force your decisions over them and do not try to over-convince them as per your choice of investment.