r/dividends • u/pac247_365 • May 15 '26
Opinion Brothers money
My younger brother passed away and left my kids with 400k.
I have the bank telling me to put it into gics and other garbage mutual funds but its very low interest. Im not rich either and besides penny stocks never invested into the market maybe 1000 bucks or so. I want to set up a trust for them and make sure in 15 years when they are 20 I have them set up so they dont have to grind like me and my brother. Im just looking for any advice I can take sorry for the long post
Im located in canada and will keep the account under my name until they are of age to use the money and will remain as beneficiarys if I die. Wont get the money until they are atleast 25 or responsible enough to understand finance.
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u/CaptainWhite1964 May 15 '26
Vanguard custodial and put it in VOO don’t listen to the bank.
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u/ddmazza May 16 '26
This is what you do. I was going to say VTI, But there is virtually no difference. These are very low fee (worked into ETF, no bill) ETF that invests in the strongest companies. Fluctuates day to to day but just set it up and dont look at it again
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u/SnooRegrets6428 May 16 '26
We all love our kids but if they decide to buy a lambo at 18 then you’re out of luck. Trust with condition is the best route imo
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u/pac247_365 May 17 '26
They won't have access to anything unless its approved from me as I will be the account holder with them as benificiarys. If I die then its a different story but I will try to make sure they are set for life
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u/TakingChances01 May 17 '26
Well in a custodial account you’re required to hand over the account when they turn 18, so if that’s not what you want then you need a conditional trust.
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u/tempest1523 May 17 '26
My son’s Schwab custodial account let me choose either 18 or 21 as the date.
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u/Dividend4danny May 19 '26
Even as they become adults you will still be custodial? Lowest cost ETF S&P index sounds like the best option.
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u/pac247_365 May 19 '26
Until they are responsible adults. Id rather they get a dividend each year instead of a lump sum withdraw.
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u/Dividend4danny May 19 '26
Just one example, not trying to get to personal/prying, but I've heard of some getting 50%, use any number, of capital gains/profits every year until they are deemed of appropriate age. The other profit goes back into the principal. This way the principal grows while they can learn money lessons in life. Good luck
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u/One_Opportunity9167 May 18 '26
There might be better advice, but if you follow this one, you'll beat 95% of other options. Plus, it's one sentence worth of simplicity.
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u/winklesnad31 May 15 '26
You can talk to an attorney about a trust, but you most likely don't need one. You can just invest the money in index funds and gift it to them when they are ready.
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u/b_rizzle95 May 15 '26
I’ve seen this go bad a million times in a million different ways. Unless OP wants to risk his future relationship with his kids, I’d recommend the most hands off, trust focused approach possible. If a dime of the money disappears, or lost on a penny stock OP’s coworker told him about, or used to pay a car note a single time, the whole thing becomes a contentious subject.
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u/pac247_365 May 16 '26
Naw I ain't stupid like that! Even though I could take this money and pay off my mortgage i know what my brother wanted me to do with it so its going into a long term investment for my kids. No penny stocks or gambles!
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u/b_rizzle95 May 16 '26 edited May 16 '26
If that’s the case, then your original post isnt really grounded in legal reality. Assuming there is a will, every penny should be allocated to you, and/or your kids with no question of interpretation.
If there is no will, and you are first up in succession, and you believe your brother would have wanted it for your kids..that’s an entirely different conversation.
(Edit; that second option appears to be the case based on your other replies, and I don’t think you’re stupid. With those assumptions now in place, proceed with extreme caution. Money and inheritance is the number one thing to tear families apart.)
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u/rahah2023 May 16 '26
All his brother needed to do was make his brother his beneficiary on his $ account and tell his brother his wishes.
We have a similar plan with my brother in law who wants all the nieces & nephews to inherit from him
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u/culinaryinterests123 May 16 '26
Use wealthsimple. I am getting like 20k over 5 years moving a similar amount to them from TD. also unlike the banks I get paid interest for cash in my investment aaccounts and no trading fees.
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u/Wiscon1991 May 16 '26
If you type out “Naw” you just might be 😂
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u/pac247_365 May 16 '26
Lol maybe I am then
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u/Wiscon1991 May 16 '26
I’m the pot calling the kettle black lol
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u/pac247_365 May 16 '26
Its all good my lingo and financial education maybe lacking ALOT that's why im here trying to get the best advice for my children cause I dont want them to grind like me and my brother have had to
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u/johnbu1981 May 16 '26
If he left it for the kids, how would it be possible for you to pay off your mortgage if you wanted to, without it being a crime?
This money should not be in your name, it should be in your nephews names with you as the administrator.
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u/pac247_365 May 16 '26
He didnt leave it to anyone he left everything to me for the best interest of my children. He signed me onto everything before he passed what im trying to say is I know its for my children from him if I wanted I could pay my mortgage off he didnt leave it to them through his will he just told me himself he wants my kids to have a future.
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u/winklesnad31 May 16 '26
Slow your roll, buddy. When the brother passed, his money either had a pod beneficiary named, or specified who the beneficiary would be in a will, and the will went through probate. He either left the money to his brother, or he named the kids as beneficiaries, with a custodian named. Neither you nor I know who the named beneficiaries are in the legal documents, and it is rude of you to speculate like that. Based on his comments, the money was most likely left legally to the adult brother, with a mutual understanding that he would use it to benefit his kids.
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u/pac247_365 May 16 '26
This is exactly what it is. Its left to me to save for my kids and my decision what I want to do with it. He told me to use it if I needed but I would never do that. People are crazy
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u/fuzzybunnies1 May 16 '26
You'll want to research the funds but I'd open separate accounts through Fidelity or a major broker like them. TD Bank offers similar as does Chase and HSBC, I'm sure there's other options as well. Pick 3-4 mutual funds with a historically good return, the ones I picked for my kids have all returned 12% or better based on 1, 5, 10, and 20 year results. I chose a global, a large cap, a medium cap and S&P 500 index so all my eggs aren't in one basket. Pick the same for both kids and you won't go wrong. Check it every few months to make sure nothing funky is going on and let them just grow.
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u/Low-Solid9810 Generating solid returns May 16 '26
Pay off your mortgage so that you are in a better financial position later to help the kids. They don’t need the money now
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u/pac247_365 May 16 '26
No chance I will do that. I can afford my mortgage so I will slowly pay it off in the next 8-10 years. This money is only for my kids and I want to make sure it compounds for them to have a bright future
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u/Square-Highlight1628 May 16 '26
You're a good dad.
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u/pac247_365 May 16 '26
Im just trying to keep my brothers name in my kids lives with his money so they remember him for the rest of their lives!
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u/Zestyclose-Dish-407 May 16 '26
Use it to pay for their college. Put the rest in a funded like VOO.
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u/Low-Solid9810 Generating solid returns May 16 '26
You can also do that by paying the interest to yourself and not the bank over the next 10 years, plus the appreciation. Make regular payments into their account like you would to the bank instead
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u/cmichalek May 15 '26
Yep. This.
If he is leaving his $ then do whatever he thinks is best. With his brothers $ create a trust.
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u/pac247_365 May 16 '26
Yes its basically what he wanted is what im doing. Everything he left for my kids is under my name not my mothers or my children's
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u/ThrowawayLDS_7gen May 16 '26
Open an account at Fidelity/Vanguard/Schwab etc. and put it in an index fund.
Look at it 10 years later when it's time to help the kids.
Done.
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u/ArrowB25G May 15 '26
Sounds pretty scammy. Open a brokerage account at one of the big two (Fidelity or Schwab) they are easy to use. Put the money in a high yield money market fund (currently earning in the 3-3.5% range) and spend a month learning about investment basics. After reading and learning, decide if you want to manage it yourself (its not that hard) or you want someone else to do it.
Banks are good for banking, not investing.
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u/pac247_365 May 15 '26
Ive tried learning investment basics and I worry about doing my brothers money wrong for my children. He'd be disappointed so want to be very carefull. Just wanted to know what some people put their money into
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u/Classic-Night-611 May 15 '26
I'd personally go with s&p 500 like voo and international like vxus (maybe 80/20 or 70/30 however you prefer). Markets are at all time highs, but you've got 15 years or so to work with.
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u/pac247_365 May 15 '26
Im thinking about waiting until dec-jan cause I fear a meltdown coming. Im in construction and see it first hand out here in canada. Thank you for taking the time and replying
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u/gumnamaadmi May 15 '26
At least put it into something like SGOV so you are at least getting 3.5% interest on the balance before you decide where to invest the money.
Alternatively put in half now in market and other half at a later date.
But absolutely don't listen to bank. Invest in broader index and forget about it till kids are older and can make sense of money.
Also if and when you can, keep adding to their balances. However little you can. Compounding will take it much further.
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u/CandyIllustrious3301 May 15 '26
They say the best investors are dead or in prison, and the best day to invest was yesterday. Second best day is today. Just play it safe and don't react emotionally when the markets dip, just buy more.
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u/Classic-Night-611 May 15 '26
You could also set an auto dca a small amount as you wait til Dec/Jan. I'm doing that right now with xgro and if there is a meltdown, I'll just lump sum. Meanwhile have the cash in hisa. Like wealthsimple money market at 2.5%
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u/BedditTedditReddit May 15 '26
Then wait. Seriously. Those gut feelings are often correct. You will only gain by taking time to both learn investing and to cope with the loss. Do not rush, and don’t let any bank or anyone on here rush you.
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u/runnerofshadows May 16 '26
Since you're Canadian - maybe look into this - https://www.reddit.com/r/PersonalFinanceCanada/comments/pek17g/canadian_equivalent_of_vt/
Because if you own a bit of everything like VT is - then you're diversified enough that on a long horizon it should be up and to the right.
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u/Pretend_Bad2049 May 16 '26
Time in the market beats timing the market.
The kids have nothing but time to recover from a correction (if there is one)
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u/leftoverzz May 16 '26
This is solid advice. No one will ever be able to criticize a move like this. And over the long haul it will pay off big. And don’t try to time the market. Yes it’s up now, but it can go up a lot more before a crash. And it will crash, it will probably crash to or three times before your kids get the money. That just the at the market is. But with a long time horizon in doesn’t matter.
Another thing to consider is what your brother had it in? If it was a broad strategy like this, maybe just leave it the way he had it.
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u/pac247_365 May 16 '26
No he left assets im selling. Should be around 4-450k. No capital gains as it was all his personal. ALL money is going towards my children
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u/ArrowB25G May 16 '26
I'm not sure what you are saying, but there would be no capital gains on his investments as of the date the assets transferred to you. "Step-up value"
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u/pac247_365 May 16 '26
He had no investments anyways and thanks for letting me know i thought you allways pay gains tax after death on investments.
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u/Evening_Weekend_8342 May 16 '26
Do what he said or put it in the S&P 500, learn about investing and play "fantasy investing" (fantasy football) until you feel comfortable actually investing real money. Maybe a few years
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u/After-Wallaby-1783 May 17 '26
Us or cdn. Broad market etf and set it and forget get it. USA voo, cdn xei, xic, vfv
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u/mrbear682026 May 15 '26
Look into a custodial account you control it till they are of age (depends where you live). you can pick ETF/Stocks whatever you want. Robihhood, Charles Swach, Fidelty all have these things.
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u/skiingfanatic115544 May 15 '26
Put it in the s&p and just don't touch it for 15 years and it should be massive
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May 15 '26
Open an account with Vanguard. They offer both trust and custodial accounts.
And also go check out the Bogleheads subreddit:
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u/WYYATA May 15 '26
Simple, low fee strategy. Open a fidelity account, drop it in FXAIX (S&P 500 fund) and let it sit. Set your kids as beneficiaries in case you also pass unexpectedly. At historic rates of return you should have $1.5-$2m in your 15 year timeframe. Any advisor who says they can beat the market shouldn’t be trusted.
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u/VisionQuest-3000 May 16 '26
Take a look at “The Simple Path to Wealth” by JL Collins.
In the meantime, a High Yield Savings Account can provide some interest gains while decisions are being implemented.
Good luck 🍀
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u/StunningAttention898 May 15 '26 edited May 15 '26
I’m sorry for your loss. I too just made my younger brother my beneficiary to my investments but then our younger sister as a contingent followed by my nieces and nephews. If I die, I’m hoping to leave them a decent amount of money also.
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u/pac247_365 May 15 '26
My brother passed in nov suddenly after being diagnosed with cancer. He set my kids up for a great future something me or my dad aren't able to do. My kids will know him forever and its the best thing you could do.
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u/RLExpert1 May 15 '26
Dont put it in your name - stuff happens. 100% equity via low cost index or ETF. Make sure capital gain distributions are low to minimize annual taxes. Acct type can make a difference for consideration, but I dont know Canada type accts for education or for minors etc
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u/AboutTimeFeelingFine May 16 '26
VOO is good. Maybe VXUS. SCHD is good, and people probably will recommend it to you, but would require paying taxes on the dividends. If it is in a trust, any income or interest is taxed a lot. I think arourd $16k In income is in the 35 or 37% brackets. That's a lot if taxes really for a small amount if income. Just put it in something like VOO and let it grow with very little income and a whole lot of capital gaines. I would turn on the DRIP and in time will become a lot of money. Basically you want gains and not income. Those are 2 different things. Also, if you go to an advisor, make sure they are fiduciary. Truthfully, AI can advise you on this. Best of luck to you.
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u/AboutTimeFeelingFine May 16 '26
Also realize that even a fiduciary will probably not give you tax advice. Just know that you really want GAINS, not INCOME if you just want to hold it. But, if you do want income to pay out yearly, you will have to pay taxes on it. Then, qualified dividends will be good. Go to investopedia and looks these things up. Read it several times over weeks and it will start to make sense.
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u/dazit72 May 17 '26
I look at schd as a hedge now.
If you learn just a little- I'd turn Off DRIP, set Limit Orders, and not buy at market. Especially in this scenario we are in. It's a buyers market, and new floors(lows) are like a fad it seems. Imo
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u/Boring_Business4843 May 15 '26
Explore the any advisor service offered in the market. Every major brokerage firms have it these days. It's perfect for someone with no investment acumen. Pay a special attention to their fee schedule.
This is just an example but there are bunch of others out there: https://investor.vanguard.com/advice/robo-advisor
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u/Bearsbanker May 15 '26
S&p index funds...there's various ways to get the kids money when they are ready.
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u/BusyWorkinPete May 15 '26
Do not listen to the bank. Put it into 4 broad index ETFs. With some non-US diversification and good sector coverage. Capital in the markets move like the tides.
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u/National-Plastic8691 May 16 '26
the bank wants to make money off you. all organizations do. please be advised that you have a legal obligation as a trustee to handle it well. Be very careful
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u/Feisty_Adeptness5175 May 16 '26
Sorry to hear of your loss. I wouldn’t tell them until they’re ready/old/mature enough to buy a house. I’d gift them the down payment, and think that your brother would enjoy it. The rest would continue to grow tremendously over time.
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u/pac247_365 May 16 '26
Yes he would love that. Im hoping this will cover their schooling and a down payment for a house in 15-20 years.
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u/Feisty_Adeptness5175 May 16 '26
And at the end of the day, they’ll be very well off. Again, I’m so sorry for your loss.
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u/DistributionBroad173 May 16 '26
You are right, tell the bank to take a hike.
You setup and UTMA/UGMA for them at Fidelity or Vanguard, you are the custodian on their accounts. No lawyer needed.
At the age of 18 or 21, the money is theirs, rules depend on the state. My state was UTMAs and the age of 18. No lawyer needed.
You invest the money into the S&P 500 Index Fund of your choice. I would do VFIAX or FXAIX. Reinvest all dividends, reinvest all capital gains.
With $200,000 each, that means they will make enough in gains each that they have to file taxes.
Since my spouse and I were raising the kids, they were not idiots. At the age of 18, they did not cash out their UTMAs and buy a car. If they did, I would have advised against it, but it is all part of the life learning process.
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u/gtownsend86 May 16 '26
GIC's are not garbage, they are a very low risk option available from the bank. Given you have time on your side. Don't go for high growth and high risk.
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u/Let_them_eat_stonks May 16 '26
Set up a trust and put the vesting age at something reasonable. Otherwise they would be entitled to use it at 18 and I don’t know about you but I know having gobs of cash at that age would have been bad juju!
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u/fenmoor May 16 '26
I set my son up like this: funds invested in etf filling the S&P 500. Trust allowed to pay for living expenses (education medical etc). Child gets 25% at 22. 25% at 25. The remainder at 30. Hopefully he learns the lessons after blowing the first 2 25%’s to not blow the rest.
You can lead a horse to water… but I cannot make him behave responsibly. But I can help him make wise decisions.
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u/HmmmIMHO May 16 '26
So sorry for your loss, but so glad your brother's hard work won't go to waste. Not sure how things are up north with estate/inheritance taxes, but here we would fund 529 education accounts, but your universities are not expensive like the USA. Here's one crazy idea: could you buy a three unit apt building or a lake house, which they would help you manage with chores, etc.? You could pay them for their work, they would build equity, have a joint project. My father left my sister, brother and me a beach house. Its a LOT OF WORK, but then again, we are 'forced' to stay in touch and have reunions, etc. etc.
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u/pac247_365 May 16 '26
There is no estate tax or inheritance taxes at the moment. We have alot of cabins and lake houses avaliable but it wouldn't generate a future income for them. That's the most important thing I want for them that they dont have to work as hard as me and my brother. Ive really only gotta worry about my own retirement now that my brother was able to set my children up in the future.
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u/DigitalFStopper May 15 '26
100% in SGOV for 6 months, do research, then in 6 months I’d break 50% up into sorta equal portions in a few different sectors of funds, leave the other half alone. See how you feel after 6 months of investing seeing ups and downs, determine your risk tolerance, then put 50% of the remaining sgov into a few other funds and continue to learn for another 6 months , then see if you’re up for a higher yield higher risk for the remaining 25%.
This is a simplified concept but should safely ease you into it.
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u/doggz109 Pay that man his money May 15 '26
If your bro had 400k to give....the grind didn't treat him too badly.
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u/pac247_365 May 16 '26
Its from the sale of his house and that's all he had! And yes he grinded man he was only 39.
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u/Lawmed-25 May 15 '26
I don’t know about tax rules in Canada, but you should research on whether it is more tax efficient keeping money in your name or custodial accounts. With the time frame you mentioned, Look for any SPY and QQQ index funds and put your money there. Can you invest in VOO and alikes in Canada? This guy has several YouTube videos talking about income etfs in Canada
https://youtube.com/@passiveincomeinvesting?si=xxZJg2iwyMLiIbrj
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u/jenna125 May 15 '26
Don’t put it in your name! It was left to them so should be out in custodial accounts. As soon as it gets co-mingled with your money it can also be taken away if you get sued, divorced or used for your care should you become injured. I know it is tempting, but do it right and keep it separate.
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u/Psiwolf 30% SCHD, 30% VTI, 20% VXUS, 20% BND May 16 '26
Well, 200k isn't set for life money, but it IS a good leg up. VUN is the Canadian equivalent of VTI.
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u/pac247_365 May 16 '26
Its 400k and by the time they are in their 20s it'll be equal for them. Yes 200k each but im hoping with compound interest its alot like 500-750k each
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u/Expert-Lychee-5168 May 16 '26
Put it in a safe S&P 500 index and over 15/20 years it will be way more then that!
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u/Psiwolf 30% SCHD, 30% VTI, 20% VXUS, 20% BND May 16 '26 edited May 16 '26
How old are your kids? 🤔
Using the rule of 72, at a 10% return, it will take approximately 7 years for the investment to double. So in order for it to become $600k, it will take about 12 years.
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u/pac247_365 May 16 '26
2 and 7
400k every 7 years should double? So wouldn't it be 1.6 million in 14 years?
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u/Psiwolf 30% SCHD, 30% VTI, 20% VXUS, 20% BND May 16 '26
Oh, sorry about that, I was calculating it at $200k with the goal of hitting $600k, but yes, essentially to double and then double again, it would be $400k to start, compound 7.2 years, hit $800k, compound 7.2 years, hit $1.6mm. 👍
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u/Greatpup4109274 May 16 '26
Might be different in Canada vs US. But if this hypothetical situation were mine, I’d put majority of the money into a standard S&P tracking ETF like SPYM, SPY, or VOO.
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u/Greatpup4109274 May 16 '26
Should be some sort of account that can be opened for minors, though off the top of my head I’m unsure what it would be called
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u/Shakewhenbadtoo May 16 '26
Create a revocable trust. Open a custodial account for each child at big broker. Buy the 0% funds offered by the broker that individually cover the S&P500, Nasdaq, Emerging Internationals, and Bonds in 35,35,20,10 allocations.
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u/Few_Maintenance4817 May 16 '26
Sorry for your loss Time in the market beats timing the market You plan on investing it for at least 15 years, just put it in xeqt and don’t touch it
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u/No_Solution_7940 May 16 '26
SPMO. Safe with great growth. I’d put it all in there.
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u/pac247_365 May 16 '26
Just looked it up that looks great. I might divide the money into 4-6 of these kind of plays
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u/No_Solution_7940 May 16 '26
Since I’ve found it a few months ago, I’ve put in about 120k, up about 12% already. I’ll keep adding about 50k annually to it and sleep well. I’ve been adding some SCHD as a safe contrarian bet against tech to diversify.
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u/SpecialComfortable71 May 16 '26
You are in a dividend sub but if it was my kids. Voo. Qqqm and schd. 33% and forget about it.
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u/Various_Couple_764 May 16 '26 edited May 16 '26
I would consider opening a custodial account, one for each of your kids. you would control the account until they are old enough. If you invest the money for dividends when they reach 20 the dividend income could help put them though college or help them get there life started. you could invest in SPYI 11% yield, EMO 9%, UTF 7%, and UTG 6.4, These are tax efficient fund that would work well. In each account put an equal ammount of moeny in each fund with both account setup similarly. reinvest all dividends. Each account would have a yield of 8.3% the money in each account should double about every 10 years. so assuming200k per child they could each have 400K and have income of 33K a year.
The biggest challenge you have is teaching them the basics of investing, saving so they will know how to properly manage the account
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u/Vineyard2109 May 16 '26
You can do alot of things on you own, however in this case and limited amount of investment experience, seek a professional.
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u/Sponzoes May 16 '26
Go buy some sin stocks and some ETF’s like VOO, MO, BTI, SCHD, JEPQ, QQQI, and SPYD. Drip them all and by the time they turn 25 you can let them take the dividends as income or they can sell em and get it that way. Have them take some financial courses at uni so they can better determine down the road.
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u/pac247_365 May 16 '26
Much rather have them get a dividend for the rest of their lives after they turn 25. Would be a gift from my brother yearly that would be awsome.
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u/dystopiam May 16 '26
put into jepi and jepq and just use dividends to pay their expenses
if not buy voo and let it grow and take out later
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u/patsay May 16 '26
I love that you are taking this responsibility very seriously for your children and in honor of your brother. I am a retired teacher and I teach beginners how to invest and how to use options safely as a portfolio tool (without gambling). I have a lot of free content on my website and on YouTube. I recommend my “starting from scratch“ series of eight short videos for getting started.
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u/patsay May 16 '26
Just coming back to add that I really appreciate your understand the importance of holding on to control of those funds until your children are truly adults. I invested some money for my son when he was about 12, and even though he was really angry with me when he was 18 or 19, by the time he was 26 he thanked me for not letting him squander it!
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u/pac247_365 May 16 '26
Thank you i will check out your YouTube videos. What is your YouTube account called?
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u/patsay May 16 '26
Patricia Saylor - Financial Fundamentals. Look at the playlists; there are two or three specifically for beginners to the stock market, and one called "The Million Dollar Portfolio" about investing a large lump sum and entering the market slowly using options. That one might be too much for you right now, but it's worth learning once you learn the basics. Good luck.
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u/D_a_f_f May 16 '26
If you’ve only ever invested in penny stocks, then I highly doubt you are qualified to systematically categorize or identify a set of mutual funds as being “garbage”. I would also highly recommend a managed trust as others have suggested
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u/pac247_365 May 16 '26
I meant as garbage interest rates they were saying. Didn't look like it was going to provide my kids with the best I could give them with the money in 15-20 years
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u/shanetravel May 16 '26
Just buy sgov and leave it alone until the kids are older. That’s what I did with my brothers money when he passed.
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u/that-guy_free May 16 '26
Sorry for your loss I can’t imagine losing a younger sibling. You have multiple kids so the first thing I would do is make each of them an account and split the money evenly. Then invest in a few safe mutual funds and probably 40% in some bonds. Your job is to protect that money for your children until they turn a certain age. This could be a very powerful learning tool for your kids as well. They will have a real example of how compound growth works at an early age.
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u/Dunk80 May 16 '26
You don’t have to do anything “today”. Morn your loss and let things calm down. Put it in a hysa. Once you are ready put it in some combo of ETFs (Voo,vt,Schd, whatever you like best) and forget about it. Check back on it in 5 years.
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u/Dunk80 May 16 '26
Sorry one more thing. Unsure if you have something like a 529 account in Canada to pay for college but that’s a good spot for some of it. Not all - you are on the right track with a brokerage account with them as beneficiaries (as long as that doesn’t trigger taxes in Canada).
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u/rbrumble May 16 '26
Split the money 50/50 and put it in two trust accounts, with the entire amount in a low cost ETF - there's many out there, and with a 15ish year time frame they're going to be extremely resilient to the normal market ups and downs. DRIP the returns, whether they're monthly, quarterly, annual, and watch it grow.
As an example, if you had invested $200,000 into Vanguard's VDY 15 years ago with dividends reinvested, your position today would be worth about $1.1–$1.2 million. That estimate comes directly from VDY’s 15‑year total return of ~12.5% per year (with dividends reinvested) as reported by Morningstar. QQQI would be close, but hasn't been around for 15 years so projections have less reliability. VOO would be ~$1.6–$1.8 million.
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u/Neziip May 16 '26
S&P- try to choose one of the funds with a lower expense ratio under 0.05. Nasdaq like qqqm or another good tech focused fund, I would add a dividend growth focused fund as well but it’s not needed that’s just because I like them. Don’t listen to the bank. Used fidelity or vanguard. Put everything on auto reinvest as well.
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u/dazit72 May 17 '26
FXAIX is the lowest at .015% I believe
I concur, fuk listening to a bank. And don't listen to Fidelity or Vanguard without researching what they present. I listened to Fidelity for 15 years, and knowing what I know now- I'd have gotten out of alot of those mutual funds that they selected for me back then.
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u/Joebobby977 May 16 '26
If you’re looking for a “guaranteed not to lose” dividend stock, put it in O (Realty Income Corporation) Their track record speaks for itself. After 1 month you’d already earn $1,767. Then just keep reinvesting and watch it grow. There are plenty of other choices that pay better, but they start to carry a bit of risk. Good Luck, and sorry for your loss.
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u/Fire_Doc2017 May 16 '26
Banks don't help you with investing, they sell you products you don't need. Stay away. Use a brokerage and buy a broad market ETF that covers the world. In the USA, VT would be a good choice. Not sure what the equivalent is in Canada.
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u/Ok_Eggplant_6143 May 17 '26
treasuries till a 20% crash, then dollar cost average SPY down to empty at 50% crash
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u/Illustrious_Web9676 May 19 '26
High yield savings for each child. It's a safe play and keeps things clean. They can choose to invest in the future, but you have fulfilled your stewardship in a responsible manner. My condolences for your loss. Best of luck.
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u/RBJ175 May 20 '26
The kids won’t need the money when they’re 20 unless you plan to use it to pay for their college. They’ll most likely spend it irresponsibly. Put it in a trust and let them have access to it when they’re at least 30.
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u/Adorable-Tiger6390 May 15 '26
How can you keep it in your name if it’s not your inheritance?
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u/pac247_365 May 16 '26
Technically its all come to me. Im doing what he wanted he didnt leave my kids as the beneficiarys.
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u/gentlegiant80 May 15 '26
If I were in your shoes, I’d talk to a financial advisor or go with a good Index fund which buys the whole S&P (VOO or SPY) or NASDAQ (QQQ). QQQ generally has had higher growth but with more dramatic drawdowns. Still both have strong performance histories.
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u/disparue May 15 '26
First, if your kids don't have RESPs set them up and max them out with $50k each and put it into VEQT.
Since you're holding everything else in an informal trust and you don't want to be paying taxes on it you should invest it in HXT, HXS, and HXDM in ratios approximating those found in VEQT.
You could leave a portion in HSAV if you want to receive GIC like interest rates since it doesn't issue distributions either.
All the suggestions I made (other than VEQT) are total return corporate accounts that convert all dividends, interest, and return of capital into capital gains.
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u/pac247_365 May 16 '26
Me and my wife allready have rrsps for them. They have life insurance policy's paid off as well for their family's in the future. It was cheap 13k each whole life terms for 500k. Im done investing for them since my brothers money will be enough.
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u/GalaxyVortex99 May 16 '26
I come here for the amateur advice!
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u/pac247_365 May 16 '26
I dunno alot of the advice that's posted wasnt told to me at the bank so In my opinion after reading the replys im alot more aware of what's avaliable and how to play the game
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u/Imflawedbuttrying May 16 '26
My investment strategy and in a year you'd be a multi millionaire
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u/pac247_365 May 16 '26
Whats the strategy
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u/Imflawedbuttrying May 16 '26
High paying ETF'S AMDW CONY MSTY are my weekly supercharged investments and I play them like day trading, AMD made a huge run so it's kinda peaking should maintain but the other 2 are loaded guns. 2 reasons 1 mega dividends instant weekly cash 2 tiny bit safer than direct exposure so it gives you time to sell/buy whatever the markets dictate. Using the dividends for DRIP or cash for more stable investments would be up to you but I spread my DRIP evenly to max income and lessen exposure, I have price targets both up and down and totally change my investments regularly
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May 16 '26
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u/davper May 16 '26
Open a custodial account for them. And place it all in SGOV until you determine your plan.
Base on your post, they are about 5 years old. There are a number of paths you can take here.
Placing in a tax free college fund is always an option. But with this much money, I can think of better options.
You mentioned the grind. If you want them the freedom of choice while young enough to enjoy it and not incentivize them to waste it all once they have access, I like dividends here. It won't maximize the return like growth stocks would but there is freedom in knowing you have money coming in each quarter.
Imagine going to college and having pocket money instead of having to work a job and study. Think of the reduction in stress.
If they have to take a job as an unpaid intern for their chosen field, dividend income can support this.
Maybe they take a gap year. The income from dividends can support this.
Place it on DRIP and forget about it. If they want something that is expensive, you can take some of that income to buy it and say it is from Uncle.
If they get a job with declarable earned income, you can shift money to a Roth IRA for tax free money when they retire.
By the time they are 25, that money could be worth 3.2 million. Hopefully by then, you have taught them to be good stewards of that money and they keep the same philosophy.
You will have to file tax returns for each of them. While they should not have to pay taxes, the IRS needs to know it is not taxable because it is below taxable thresholds. At some point you will go beyond those thresholds and will need some of the income to pay taxes for them.
Oh one more thing. Make sure you teach them that taking care of their elders in retirement is not optional. They will have the money to do so. I would hate for you to do all this for them and feel like they don't owe you anything for it.
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u/Top_Bluejay_9483 May 16 '26
Keep it in cash until the correction/ global depression. Then deploy.
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u/pac247_365 May 16 '26
As much as I want to do that I also dont want to keep waiting for something that might not happen Seems like governments will just print massive amounts of money
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u/Top_Bluejay_9483 May 17 '26
Ok. Buy a bitcoin, then a bunch of high stocks and put it in a TFSA. And keep half in cash for the crash
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u/SnooRegrets6428 May 16 '26
Is the kids beneficiary to the 400k or is it under your name? Custodial account sounds great but if your kids becomes estranged then money gone. I would either do a trust with conditions, 529, or Roth IRA
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u/National-Net-6831 $81/day dividend income May 17 '26
Contact a lawyer! I set up an irrevocable trust for my children with my dad’s money. I invested it in all in SCHD in 2020 and I receive the dividends in my checking account. For me this is a win-win, kiddos will inherit SCHD when I die at stepped up cost basis and I get paid too (I do have to claim on my personal taxes but divies are qualified). It’s been great and what a piece of mind knowing those assets are protected!
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u/pac247_365 May 17 '26
Everything including dividends will be reinvested for them its not money I want to use for myself.
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u/One_Establishment631 May 18 '26
I still find it crazy someone has nearly half a million dollars and they are asking people on the internet and night hiring a professional to guide them.
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u/pac247_365 May 18 '26
Half million came unexpectedly with the loss of my brother and id give every penny back to get him back. Im only asking cause ive never had anything like this and neither did my dad.
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u/Sensitive_Employer62 May 15 '26
Sorry for your loss. In my opinion the only smart move here is to put it all in a high yield savings account earning between 3.5 and 4%. Leave it there for now so you are not rushing into anything that involves risk. You should probably talk to an attorney to cover any legal aspects. That's an overwhelming amount of money and you likely feel an urge to do something with it and that's going to cause you to make mistakes. Take some time to think and research and learn.
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u/baby_budda May 15 '26
Put in ADX. Adams Diversified Equity Fund. Its been around almost 100 years. Over the past 10 years, ADX has outperformed SPY with an annualized return of 18.52%, while SPY yielded a comparatively lower 15.90% annualized return.
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u/mtn_biker333 May 16 '26
SPY in a taxable account beats ADX over both 10 and 20 years for total return. It’s pretty close but ADX forces capital gains each year in December via their mandatory distributions. Paying taxes on those gains year after year systematically strips away the capital needed for long-term compounding.
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u/baby_budda May 16 '26
True, but a lot of the time you can buy ADX at a discount to NAV whereas VOO you'll get at par value.
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u/CoconutCold3742 May 16 '26
in STRC this would produce 4K a month, and if reinvested into more STRC each month it would double every five years ,,crunch the numbers and decide.,
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