What to do with an inheritance ?

Oct 3rd, 2016 – 1 Comment

Make it a loucrative day!


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hello Mr. Schizas

A big Thank You right off the bat to you and everyone at AM640 for sharing your knowledge and opinion on air , as it helps me form my own opinions and has helped me out in my day to day life.

Lou, I just inherited $100,000 dollars on a house sale closing on September 7, and soon after I thought what would Lou Schizas do. pay off my debt to visa right away for sure. I intend to move out of T.O. to London On, and put a big down payment on a house , and continue in the h.v.ac trade with the intent of starting up on my own in future. Thanks Again And All The Best To You And Yours Lou !

Robert

 

Hey Robert,

Thanks for listening to AM640 and for your kind words. It gives me great pleasure to know that we are contributing to our listeners success!

On the issue of inheritances I have always advised that one should look at the transfer of wealth as found money intended to improve the recipients life and prospects. It should also be top of mind that it took the benefactor a lifetime of effort to accumulate the assets that you have been gifted. Finally the departed could have consumed the assets themselves but decided to leave something for their descendants use the gift wisely.

You seem to be on the right path in terms of managing your inheritance. Paying off debt is a thing to consider but only if it comes with the commitment to never let it run up again! Consumer debt is extremely expensive and runs counter to the logic of only taking on debt to acquire tangible assets like a home. If you have unused RRSP room – you might consider slapping cash into the plan to generate a tax rebate you can use to pay off debt – then after the requisite waiting time use the money in the plan to finance the downpayment on a principal residence if its your first home.

Moving to London, Ontario will introduce you to a land where housing can be found at lower prices than in the GTA and its a big enough market to make a go of your career and possibly a business. With that in mind look to purchase a house that will meet your short and mid term needs. Interest on a principal residence is not taxable deductible but the capital gains are tax free.

In addition think about how you might use your skill set in the trades to expand your contacts in other trades. In the future you may find it advantageous to purchase rental real estate or commercial space. You can then deduct the interest paid on the mortgages applied to those properties however the capital gains are taxable.

Your occupation in heating, ventilation, and air conditioning is one that travels easily and if you chose to go it on your own has low barriers to entry. A truck, some tools, and moxie will help you meet your self employment ambitions.  After a lifetime of self employment I can tell you with certainty that when you work for yourself you really get that the boss is a bastard.

 

Make it a loucrative day and happy capitalism!

 

 

 

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