Investing dad’s money or your inheritance?

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Q. My father has me his beneficiary, and he has more money saved than he will ever spend, even if he needs long-term care. The funds are all invested in bonds, and I want him to be more aggressive – like I would if the money was mine. Suggestions?
— Planning ahead

A. Messing with your possible inheritance is sticky business.

So that we understand correctly, you want your dad to invest more aggressively so when you get your inheritance, you end up with more money?

“I hate to say this, but it is still his money and he should invest in a manner that he feels comfortable with,” said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton. “The reason why he has this money is that he leads a conservative lifestyle and lives below his means.”

“If he switches to aggressive at this point of his life, when we have a substantial market decline — and we will — it will totally freak him out,” Lynch said.

If his goal is to leave you more, he can still remain conservative and buy a life insurance policy where all the risk is shifted onto the insurance company and not him, Lynch said. This is assuming that he is insurable.

Lynch said a big issue with inherited money is most of the people who inherit it actually “blow it.”

Not “blowing it” would mean, for example, if you inherit $100,000, you invest the $100,000, grow it, live on it and pass at least $100,000 to the next generation.

“Generally if you did not have the discipline to earn your money in the first place, it is highly likely you will fall within this category of it only adding short-term value,” Lynch said. “After the money is gone, the person can often be worse off than when they started.”

Be careful what you wish for!

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NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.