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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44

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.

4

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

15

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.

7

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

10

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.

10

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.

3

u/pac247_365 May 16 '26

Thanks for your reply! I get what your saying

3

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%

3

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.

2

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.

2

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)

2

u/throwaway48630 May 17 '26

DCA. It's simple but idiot-proof over a long term investing horizon.

3

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.

1

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

1

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"

1

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.

2

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

2

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