working with my father-in-law

jlev

My new father-in-law loves talking with me about investing, but it's become apparent that while he has lots of knowledge on the topic, his memory for how it all fits together is not what it once was. He's been very successful and I don't want to interfere, but I was hoping to encourage him to go through his accounts and make a record of why he chose to invest in everything he owns so that anyone who might have to follow up on his work after the fact can do so in an intelligent way (His wife has not followed along and they have no financial planner). I know there are lots of resources and recommendations on this general topic, but can't remember what the practice/idea is called. Does anyone have any advice on how/whether to talk this through with him or at the very least, what the practice is called so I can send them some descriptions/templates?

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Old_Joe

Well done, Mo. Very thoughtful, excellent advice all around.

Regards- OJ

Tampabay

On a scale of 1to10 how tough is he about his finances (money) My parents were off the scale and said NO ONE was going to touch THEIR money...
IN My infinite wisdom I knew it wasn't going to work offering HELP..I reassured them they had enough money to make it thru life (their income was greater than their bills)
OF course they made it and PEACE was maintained till the end....Drop the matter if they demand it...its not worth the problems...forget "protecting" THEIR Money....its not yours

jlev

@Maurice that is very good advice. And I am focusing on listening, he has much wisdom to impart and has done very well. I'm also not trying to change what he does, mostly because I don't think it is my place (as you note.) What I am trying to do, is give my wife and her mother some peace of mind, in that they worry about the fact that they don't really understand what is happening and know that he doesn't always remember when they ask him to explain.

Without any prompting he has been moving money (about a third of his portfolio) into indexes the last few years, but still owns many stocks, scattered through miners to biotech and other good ideas that he does not always remember. It's these stocks that cause concern. I'll look into maybe helping him set up a morningstar account for organization, but my major concern is just making sure there is a guide or record for others or himself to follow when he can't explain why certain investments were made.

I very much am wary of the topic, because I don't think it is my place at all to tell him how to invest, but I am trying to figure out how to convince him to keep notes, and I recall reading a couple of things outlining why this was good practice, especially in one's later years, but can't find any of the articles I've read.

jlev

@Tampabay agreed. His major objection when I broached the topic, was that it is not the past (why the investment was started) that matters, but the present/future, so any notes made would be out of date.

Again, he doesn't need advice, and unless something truly unexpected happens they'll be fine.

davidrmoran

Several issues here maybe. No point in interviewing him re origin stories and thinking, I agree. I would forget about notetaking and notekeeping too. Define the goals, as you are starting to do, and of course as you cannot do on your own. Is it what happens when he dies? when he goes dotty? Is it what are the tax consequences? Is it who has PoA FA? Is it are the trusts and wills set up properly and updated and beneficiaries specified? (Sorry not to have reviewed the thread in detail.) Is it appropriateness of investments for remaining lifespan and remaining needs? All of the above?
If he going into indexing, it may be that he is still on top of things. If you had posted that he put 75% in GLD because he just knew it was good timing, that would be major concern unless this is an unusually wealthy family.

Since he has no cfp and does not want one, now is the time to have a review meeting with the trust attorney, assuming there is one, and have him or her make the suggestions. See if there are PoA HCs and trust docs updated, also wills, and perhaps, depending on state, some statement of instructions ('living will'). Plus the PoA FA.

Alas, it is almost certainly not your place to suggest any of this, or do it as lightly as possible and then let it drop for a looong time. Discuss all with your wife; she is in that family. There is only so much you can do now. And a good idea to sit and hear him out, regularly, about anything, almost. If the family can stand paper losses and maintain cashflow and lifestyle, and if there is not a lot of life yet, and if the individual stocks are spec and loss is tolerable, then it may be all good. If he is dottily taking inordinate flyers in a swing for big winners, though, you have an undoable task ahead, yeah. G/l.

BenWP

I did not get to benefit from my father-in-law's investment skills because he was hard to reach. There might have been a clash if I had had to steer him in another direction because he was not computer literate and his principal goal was avoiding taxation of any kind. He read only the WSJ and he and his wife laughed at me when I bought them a 3-month subscription to the Times, saying the blue wrapped paper just cluttered up their place. I read both papers because I like to know what the other side is doing.