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One Size Does Not Fit All
April 2023 by Sally Pessin, Esq., CRPC
A 65-year old client said to me, “My Aunt Lily said I should take my million dollar inheritance and invest it in real estate.” I asked the client if he knew what investing in real estate involved. Having just bought his first house at age 65, he was clueless. My client’s Aunt Lily, in her 80s, could rely on her doctor husband’s income to enable her to dabble in real estate; she became both a successful realtor and investor over a 40-year period. She understood her local market, could save commissions by acting as her own broker, and had cultivated a list of contractors who could perform maintenance and repairs at a moment’s notice at reasonable rates. Although investing in real estate made sense for Aunt Lily – for her 65-year neophyte nephew, my client, not so much. He had no pension and needed to plan for an investment that would provide consistent and secure income to supplement his Social Security benefit for living expenses. Becoming a first-time landlord at age 65 is not a good idea.
Another client with a very modest amount of assets e-mails me after every phone call with her financially savvy brother-in-law. “He said he’s putting all of his money in gold and urged that I do the same,” she told me. She and her husband, struggling financially, needed to be more aggressive with their wealth to support a multi-decade retirement. I point out that her brother-in-law is in a different financial position than she is. It turned out the well-meaning relative was unaware of my client’s precarious financial situation when he made this recommendation. Remember, your financial situation is completely unique, and you should act accordingly with your money.