Email from my dad: What to do with 300K in cash

Just sold ~$300K of municipal bonds.  What should I do with the money?

I think he was asking if he should put it in stocks or bonds or what have you.  That’s not what I answered.  I said:

Buy a house in Portland!

My dad is 74 years old and not quite as spry as he was even a year or two ago.  He’s still in pretty good shape for a 74 year old, but gets worn out much easier than he used to.  He’s cut short several long trips recently (including one to Europe) because he was tired.

My mom is 66 and plans to work another 6 years (this is a change from her earlier plan to die mid-lecture).  She doesn’t have to be in the Midwest in the summer as she can work from anywhere.  My father has always had a lot of wanderlust, so they’re used to living apart for lengthy periods of time.  I suspect their marriage works a bit better that way, in fact.

We don’t know how much money they have saved overall, but we believe it to be quite a lot.  My dad’s lived his entire life like Jacob at Early Retirement Extreme and he’s made sure my mother has saved extra as well.  He’s never been afraid of the stock market.  We also suspect it isn’t enough to say, buy a house in the SF hills.

He asked if I meant Portland, ME or Portland, OR.

Obviously I meant Oregon.  Our family has a West-coast bias.

My parents both grew up in Northern CA.  Northern CA is very expensive these days and doesn’t quite have the same vibe it did back in the 1970s.  We understand that vibe has moved up North to more affordable Oregon.

On top of that, global warming should be making Portland’s weather better every year.  I went to a talk that said it would be like Santa Barbara about a century from now if things trend as predicted.

So buy that retirement home.  Use it as your new base.  Spend summers there.  Travel up and down the West coast.  Go hiking.

That’s what I recommend.

What would you recommend my father do with $300K of recently liberated retirement money?


64 Responses to “Email from my dad: What to do with 300K in cash”

  1. investfourmore Says:

    I would highly suggest real estate as well. Someone younger could buy a lot of cash flowing rentals with 300k.

  2. Bardiac Says:

    Travel! (Assuming they already have a home base they like and no big debts.) Has he been to Antarctica? The Galapagos? Alaska?)

    • nicoleandmaggie Says:

      Well, he actually hates where they live now, but my mom is a humanities professor and intends to continue professing for quite some time (estimates vary between 6 more years and death depending on when you talk to her). He does travel a lot, and has his whole life but has been doing a lot of cutting trips short lately. If he can’t handle Europe (despite being a European immigrant and being fluent in several languages), there’s no way he’s going to do anything more exotic. A tour to China was a traumatic disaster (he was assigned a scary roommate). He won’t ever spend the money to do things comfortably, but he may be getting too old to do the Hostel thing. I don’t know.

  3. Linda Says:

    Buying a house may be a good idea, but hopefully it wouldn’t become a maintenance burden for them. I can’t wrap my head around having that much cash to play with, so nothing occurs to me.

    • nicoleandmaggie Says:

      Well, he is 74 (and spends next to nothing), presumably at that age you’ll have retirement savings too!

      • Linda Says:

        True, I have retirement savings and seem to be “on track” for a decent retirement, but it still seems like a lot of money. I was very happy to see my 401(k) balance just over the $200k threshold recently. Of course, I’m 46 and I know there are others out there with much more saved at this age.

  4. bogart Says:

    I can’t answer your question, as I don’t know your dad. Independent of their own preferences (which qualifier obviously falls in the same general category as “other than that, Mrs. Lincoln, how was the play?”) I’m not a big fan of home ownership (period) for those entering their dotages, and certainly not second-home ownership. Maybe if one has enough money to throw at the problem (i.e. maintenance/upkeep of second house), it makes sense, but I’m pretty much with the cautious note in Laura Vanderkam’s 7/7 post on the subject.

    A quick search on VRBO shows what appear to be nice homes for rent in the $3.5K per month range, in Portland. $300K buys a lot of months (and needn’t be confined just to Portland). Personally, though, if I were going to buy “stuff” (as opposed to just experiences), I’d probably opt for a nice class C motorhome and enjoy the mobility and flexibility it could provide. Though I’m not a city person, and if one wants to visit mostly cities, that would likely be a bad choice.

    My mother recently advised me and my brother she is “out spending our inheritance” (which is actually a fraudulent claim; her home recently got flooded and she is having to pay for remediation, and she has — gasp! — bought a new laptop computer), so I asked her to be sure to send postcards.

    • bogart Says:

      … or if one envisions a noticeable fraction of the travel being solo, maybe just a travel van (class B), or a slide-in camper plus a good truck.

    • nicoleandmaggie Says:

      Portland has some nice-looking webpages for retirement communities that go from community to assisted living to nursing home. I always did promise my mom we’d make sure they got into a nice nursing home. But oddly she didn’t seem excited by the idea.

      My dad is a city person, very much so. City and big national parks. He doesn’t much care for the in-between. Public transportation will also be increasingly important as he ages, and it would be nice to be able to join a more active Sierra club organization. (He started one where they live probably 20+ years ago, but there just isn’t that much nature to enjoy without a long drive.)

      • bogart Says:

        OK. What I’m witnessing (second-hand, but up close, i.e. my mom and local friends of hers) is that by the time you need to be in a retirement community, including the kind you mention (i.e. ones where you might choose to move in relatively “early,”), you don’t meet their requirement, either because you don’t have the financial reserves or because you “show cognitive decline.” So buying into *that* sort of homestead might be a very good move, indeed.

      • nicoleandmaggie Says:

        Yes, I know. And my mom has experience with that as they didn’t get her mom into one early enough (the Alzheimers had set in by the time they got agreement to make the move). But… my mom just laughs and changes the subject. And, of course, she’s still young, but my dad isn’t.

      • bogart Says:

        Oof, I’m sorry re: your grandmother, hope your parents find an arrangement (or arrangements) that leave them well situated, whatever those may be.

      • nicoleandmaggie Says:

        Luckily my sister and I both make reasonable incomes and will be able to figure out something, even if they spend down their own savings.

  5. Linda Says:

    Sounds like he needs a hobby more than he needs an investment. Maybe he should get a dog and train it. There are all sorts of activities one can do a well-trained dog, including competitions that could include some travel. Not all of these sports require a lot of physical demands from him (think of dock jumping, for example).

    I know you like cats, but this is one area where dogs have the upper hand. ;-)

    • nicoleandmaggie Says:

      They have a dog. An Australian cowherder. She’s relatively young too (as my sister’s childhood dog passed on just a few years ago). They also have a cat.

      Neither of my parents are very good at training dogs. They are much more of the spoiling type. They trained their kids, they baby their pets (and their grandkids).

      • rented life Says:

        YES! That is my planned parenting style. Mom always says we’ll be terrible parents because we spoil our pets, but pets don’t become productive members of society. They stay here and make me happy. Kids however need to be productive, good citizens. And it clearly worked well for your parents. This made my day!!

      • nicoleandmaggie Says:

        I’m sure that when your kids are grown, you will never tell them that they’ll be terrible parents! (I hope she was joking.)

      • rented life Says:

        Of course I wouldn’t tell them that. I couldn’t tell you if she was joking. She makes a lot of “strange” (that’s brother’s word) comments that I think is her way of expressing concern without being entirely logical or rational about it.

    • nicoleandmaggie Says:

      Btw, in terms of hobbies, he really enjoyed visiting all the Occupy Wallstreet protests. He also plays with money and does political campaigning stuff for democrats. All things he’d probably be very happy doing in Portland!

  6. rented life Says:

    No advice, after reading his travel experiences, as that would be my first advice for my own parents. (Actually it’d be an international trip for all of us since they keep saying we need to do a family vaca and they want to do Disney and brother and I DO NOT.) Buying a house in Portland makes the most sense.

  7. Chelsea Says:

    Aren’t space flights going for about $100k? That would be pretty cool for a traveler…

  8. MutantSupermodel Says:

    I approve of your recommendation. A house in Portland Oregon sounds lovely.

  9. plantingourpennies Says:

    My MIL was just talking about their house down here this weekend and I was surprised that she does regret the purchase a bit. She has another year or two before retirement, while FIL retired in ’00 and though she’s also tenured faculty and can do everything remotely much of the time (she’s even skyping in for thesis defenses), she talked about how wasteful it felt to maintain two places to live. And this is coming from someone with more than enough money for it and who rarely has any qualms about the environment, but she still felt te extravagance of having a second home in fL was too much in hindsight.

    • nicoleandmaggie Says:

      Hmm, he does have plenty of qualms about the environment. He’s owned multiple houses before, but only as rental properties. (He would fit right in with the pf community in Portland!)

    • rented life Says:

      If he wasn’t in the house full time, could he “rent” it out some weeks/weekends? There are two cities we’ve been torn between when we think about a future second home (that’s so far away that we’re just dreaming here, but why not dream?), but in each case we’d encourage friends/family to use it when we can’t. For one, I don’t like the idea of leaving property unsupervised for long, for another, if we don’t do one in Canada then the other home would be pretty accessible to our loved ones. (We’re the only one with passports.)

  10. scantee Says:

    I’m insanely curious. Can you say more about your parents being apart for lengthy periods of time and how that worked for them? Recent events have proven that my spouse and I differ quite drastically on our desire to roam (I am the wanderlustful one, he just wants to stay put) and I’m wondering how we make our relationship work while meeting both of these needs.

    • nicoleandmaggie Says:

      I don’t know there’s much to say. My mother is a humanities professor and has never had much choice of where to live. My dad’s had various jobs and bouts of unemployment and self-employment. I think all of his jobs have required extensive travel.

      My partner and I are totally codependent so living apart doesn’t work for us, but it works for my parents. My parents also have separate offices, but my partner and I share one because when we had separate offices we ended up together anyway.

    • bogart Says:

      Haha, I can tell you that when I was working ~3 states (10-hour drive) away from my DH at a SLAC (new job for me, while he stayed at his old job), and new colleagues would ask about my spouse, etc., what I noticed was that those who had been married for <5 years or had small children would get a horrified look on their face, while those who met neither of those criteria would (sometimes) appear envious. "Oohhhh," they would say dreamily, "so … sometimes you live WITH your spouse, and other times you are … APART."

      How wanderlustful are you? At the time of the above, I fell in the first category (married <5 years), wanted to join the second, and really wasn't happy about living apart, plus we lacked the financial resources to make it work easily. But now that we are living together and raising a small kid, I pretty frequently do some wandering that doesn't include DH. Since DS was born I've made 2 trips to Europe without DH (both involved visiting family) and several shorter weekend trips (all driving) with DS to visit others I wanted to see. DH goes once or twice every year on a roughing-it fishing trip that I don't join (I likely would sometimes were it not for DS but he's still little enough it would be a hassle to tag along and take him), and I took a work trip this year and extended it a bit in order to get away from both of them (DS and DH). This is familiar for me; my father didn't travel (I mean this literally; in my entire childhood he never once slept a single night anywhere other than in our home. He would go places that could be visited on day trips, but nothing more), but my mom took me and my brother and went, well, everywhere — to visit her family (DC, various parts of Europe), to NYC, Boston, summer camping trips. That was part of what was actually a pretty unhealthy relationship between my parents (since ended through divorce), but not so much the travel/not-travel part, more the "everything else."

      And while there's lots I do enjoy about traveling with DH, there's lots I enjoy about being solo (or just me + kid). I travel much lighter, and much more carefree than does DH; DS and I can (and will!) sleep anywhere and eat pretty much anything and don't require real meals (though DS does require a lot of food, but is fine with most of it being snacks rather than sit-down).

      So, yeah.

      • scantee Says:

        We’ve been together nine year, married six and we have two kids ages 3 and 5.

        This difference really became apparent around a year ago when I proposed moving from our frigid Midwestern city (the frigidest of the frigid Midwestern cities) to the (it never snows and is close the the mountains AND the ocean!) Bay Area. What happened around that time that sparked my desire to move is that the positive change that marked our early times together as a couple sort of died down after the end of the infancy of our second son and as I looked out over the next decade and a half of our lives and I just felt really bored by the thought that we would be doing the same ol’ thing for that amount of time. So I proposed the idea of moving and it turns out he is totally fine doing the same ol’ thing for, pretty much AFAICT, forever.

        We’re still discussing the moving idea so it is still a possibility but I’m also trying to figure out what I’ll do to stay sane if we do end up staying here. He is fine with me travelling by myself but I’m not sure that is enough for me. I want to live in a new place AND I want to travel (by myself, with him, and with all of us as a family). If you want all the finer details of this story, maybe the Grumps can host my question as their very first (I think?) Ask the Readers submission!

        I love my husband and want to stay together but I absolutely do fantasize about spending time apart so that I can scratch my wanderlust itch.

      • nicoleandmaggie Says:

        Sure, shoot us an email if you’d like a friday ask slot.

        I do have to say though, there are SO MANY places to travel in the SF bay area. It’s so much easier to experience new things when you’re living in CA than when you’re living where we’re living now or have lived most of our lives. So you’d get the best of both worlds– staying at home and traveling to great places. We’d both like to move back there ourselves, as would our partners! If only we were independently wealthy.

        So we’d be hard put not to endorse moving to SF Bay area. We haven’t done it though, but mainly because we’re credit constrained– our jobs are not in the SF bay area.

      • scantee Says:

        Awesome. I just emailed you.

      • nicoleandmaggie Says:

        Great! It looks epic.

      • scantee Says:

        Sorry about the length! I knew it was getting long but I didn’t know what to cut. Will this be this Friday or another one? I want to make sure I’m around so I can promptly provide even more private details about my family life.

      • nicoleandmaggie Says:

        hahaha! probably this friday, but I have to wait until leechblock lets me in to make sure what we have already scheduled isn’t important/timely

      • nicoleandmaggie Says:

        For you, we will bump an ask the grumpies on gender and publications. :)

    • Revanche Says:

      Fantastic, I deleted my comment but I did find the blogger that you reminded me of:

  11. delagar Says:

    Maybe buy a condo somewhere? That comes with maintenance so they wouldn’t have do any of the upkeep. There are various levels of condo, from what I understand, and three hundred k would buy a lot of condo.

    But yes, me, I would travel on it. WTF, he can’t take it with him.

  12. Rita P @ Digital Spikes Says:

    I support buying the retirement house but buy it with 60% of amount and invest remaining in stocks and keep some as saving for emergency fund

    • nicoleandmaggie Says:

      You think he should carry a mortgage or just have a cheaper house?

      This isn’t his entire retirement savings, just the part he had been holding in municipal funds. So he’s got an emergency fund and lots in stocks.

  13. Zee Says:

    You know there are those international cruise ships that you can ‘buy’ an apartment in, and live in the them or not whenever you want meeting up with the boat where ever they are in the world. The boat is on a forever trip around the globe. It might be a fun, safe, low impact adventure for someone like him.

    • nicoleandmaggie Says:

      He’s cut short several long trips recently (including one to Europe) because he was tired. His trip to China also didn’t go well. I think he wants to do less international travel, not more.

      • Laura Vanderkam (@lvanderkam) Says:

        It makes sense that traveling gets tiring. On the other hand, it sounds like he was trying to travel in exhausting but cheap ways. A weird roommate? Pay the single supplement! Hire a private guide. I’ve traveled to South Africa under two different sets of conditions. In one I flew coach, my husband and I drove ourselves around, booked hotels on the fly, etc. In the second version, we had business class tickets, a lodge at a nice hotel in a game reserve that we were whisked off to, meals prepared, etc. The latter was a lot more relaxing. Over the next 5 years, $300k could buy major upgrades to relaxation on trips.

      • nicoleandmaggie Says:

        Lady, you’re preaching to the choir. However, my father is a 74 year old Depression baby who isn’t going to change his ways any time soon. Like I said, he makes Jacob from Early Retirement Extreme look like a wuss. The only thing he spends lots of money on, the only thing he is actually physically capable of spending lots of money on, is charity.

      • Bardiac Says:

        Laura’s question (above or below) hit the nail on the head. If he wants to travel, then maybe there are ways that are less exhausting? For example, rather than a tour with a roommate, how about a more extended visit to just one place? (though perhaps less time overall?) So, instead of a two week tour to this and that place with lots of packing and moving, a one week stay in Venice or something?

      • nicoleandmaggie Says:

        The only tour he’s done is the China one. He usually just goes someplace and decides what to do once he gets there (generally to the youth hostel). This hasn’t been much a problem in say, NYC or Santa Monica or San Jose. But trips farther afield haven’t been working out.

        My mother suspects it isn’t actually exhaustion but that he misses home and it’s too far away, but we can’t say for sure. It is true that he can’t do the long hours of driving like he used to be able to, and he’s actually been buying plane tickets places, something he never did unless he absolutely had to before a few years ago. Chances are he’d have stayed in Europe or China if my mom had gone with, but she didn’t want to and she still has to (wants to) work.

        I think the travel thing is a red herring… he doesn’t need to do more of what he’s already doing (which is a lot, and has always been a lot) and we can’t change how he travels. Also he probably has enough income to fund the travel he’s doing absent of the $300K.

  14. Savvy Working Gal Says:

    I’ve read Eugene, Oregon is a great college town to retire in. I actually jotted it down for myself. My husband is 11 years older than me. My job doesn’t allow a lot of time off for travel and I fear by the time I retire he will no longer want to travel. If I retire early we will be too poor to travel and I will go stir crazy sitting around the house.

  15. Funny about Money Says:

    How about launch a campaign to convince his wife to quit teaching at the earliest possible moment? If they have enough to live on — and could even move to some garden spot in Oregon, for hevensake — why on earth keep tormenting herself by continuing to trudge to a job? If she wants to be in the classroom, she can teach adjunct; and as an established scholar with a track record, she undoubtedly can get herself in the door of any state university library she pleases. Or as emeritus, just keep using the library at her school and have their ILL send her stuff to the nearest public library.

  16. First Gen American Says:

    Well, if he really is of the extreme frugal type, he’s more likely to spend money on you or your kid’s 529 than spending it on himself. My mom has no problem giving money to me if I need it, but hates spending on herself. To the frugal mind, it’s pretty wasteful living somewhere only part time so it’s unlikely the extra house thing will fly. Does he like to tinker? Maybe a project that can double as an investment might be fun. An old car or fixer house or a little business that needs TLC that he can resurrect. Just the challenge of finding that diamond in the rough might be exciting especially if he has an entrepreneurial spirit.

    Regarding the wanderlust side topic, I’ve gone on vacations without my husband and vice versa..often during the same week he goes somewhere. A lot of people think it’s weird but sometimes we just want different things so we split up and do our own thing where we’re both happy instead of one person being miserable half the time because they’re being forced to do something they don’t want to do. It’s totally fine as long as both people are okay with it. We also got married later in life, so we were used to being pretty independent about that sort of thing. I’ve always had jobs that required travel so my wanderlust gets satisfied with my work travel. Perhaps a jet setting job is an option?

    • nicoleandmaggie Says:

      Yes, you totally understand. The thought would be that it would be his full-time home-base and my mom would eventually move. It’s really amazing how little he likes to tinker (except with his investments), especially given my sister’s proclivities for tinkering. He’s also been getting rid of his last business because he’s ready for full-retirement. (And, thank goodness, he *finally* got a hearing aid.)

      Jet-setting job is one of the things we suggest on Friday’s post. :)

  17. Carnival of Personal Finance #426, where did the summer go? - Reach Financial Independence Says:

    […] Nicole from Nicole and Maggie helped her dad consider where to invest $300K in cash. […]

  18. kathleen Says:

    I LOVE your answer! :)

  19. andrew kim Says:

    he should kill himself only 300k and over 70? hes f*cked why bother living

    • nicoleandmaggie Says:

      Can’t tell if you’re just a troll or not, but you have a serious reading comprehension fail. Read the post again and note that 300K in cash is not the same as 300K in total retirement savings. Next time you sentence someone to death, make sure you’ve got the facts straight first.

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