DEAR BRUCE >> I am a 69-year-old widow. I own 18 rental apartments and a home with no mortgage. All of my properties amount to around $1 million.
I manage the rentals myself and I enjoy it. However, I would like to sell sometime in the near future. I have around $75,000 in a savings account. All my assets are willed to my daughter.
Will the monies from the rental be enough for my daughter to live off of with her modest retirement and Social Security? I don't want to invest the monies with any risk.
DEAR S.N. >> You mentioned that your property amounts to around $1 million in value and that's impressive, but what you failed to tell me is what sort of monies the rent is generating. It may be doing very well, it could be in the toilet or anyplace in between.
Making the assumption that the property is earning a gross of 15 percent, which is a very modest income, and the expenses are running 10 percent, you will have 5 percent, or $50,000, net on your million dollars worth of real estate. While not impressive, it is certainly sufficient, along with your $75,000 to support your daughter, with an income of $50,000 a year, without ever touching principal.
You also mentioned you don't want to invest money with any risk and that's unfortunate because you'll be obliged to accept a smaller return. Even at 3 percent, which still amounts to well over $30,000 a year, coupled with your daughter's modest retirement and Social Security, that should make her very comfortable.
I would urge you to consider a modest risk. Please make an appointment to speak with a broker.
DEAR BRUCE >> I am 43 and would like to start reading about finance as I feel I should understand more about economics and the stock market. Do you have any recommendations? I have no background in finance.
DEAR S.D. >> You are very wise to start reading about finance, particularly if you have money to invest or expect to have money to invest. I suggest that you start reading the finance sections in newspapers and a couple of magazines, such as Money, Forbes, etc. Don't expect to cover everything in a day or two. You'll be surprised, if you just read the items suggested, that after six months, all of a sudden you'll realize that you learned a great deal.
At that point, if time permits, you might want to look at the local junior colleges and see what kinds of courses are available.