936 paying off parent's debt, DHHF vs VGS, goal setting, career change into real estate + more

Glen James (0:06)

Today on the show, there is a comment that I saw in the Facebook group that was just too juicy not to talk about, and that's paying off parents' debt. We're talking about inheritances, and if we help adult kids now or later, moving from survival mode into flourishing mode. Maybe you've hit a financial goal, and all of a sudden you've got money left over. How do we adapt to that?

We're going to talk about a career change, and also have a look at the ETFs DHHF versus VDHG and VGS, so hang around for that one. I am joined as per my last email by John Pigeon from Envisage Property, host of the This Is Property Show. Welcome back.

John Pidgeon (0:55)

Thanking you.

Glen James (0:56)

Hey, a lot to cover here.

John Pidgeon (0:58)

There is.

Glen James (1:00)

If you are watching on YouTube, John did not get a skin cancer cut out of his nose. What happened, John?

John Pidgeon (1:06)

Well, the old strip on the snozzle got me good and proper. So now, look, I think I chose the wrong type of strip. I should have gone more of the sensitive. So I don't know for those out there just quickly.

They are actually a game changer.

Glen James (1:24)

Right.

John Pidgeon (1:25)

Getting the nasal clear overnight, but took a bit of skin with me in the morning.

Glen James (1:30)

Love it. Okay. This is a bit long one. The team might put it over two slides if you are watching on YouTube.

My dad is in his mid-70s and has been in significant debt for most of his adult life, mainly due to business troubles and poor financial habits. He currently has $95,000 of debt across credit cards, business-related debt, and personal IOUs to family. He has no super, receives a partial age pension, and still works as a sole trader slash doing odd jobs to supplement his income.

I'm about to receive an inheritance of 200k and am planning to clear my dad's debt. For context, the person leaving the inheritance had expressed wanting to do this. So it really is the inheritance for the dad. They left the money to me so that I could deal with it rather than my dad directly. So am I firm in paying, so I am firm in paying it off.

I'm more needing advice on the most sensible, quote unquote, way to go about it, where to get professional help. For various family slash property circumstances, bankruptcy isn't an option we're considering. I don't want the debt to be wiped and have him end up in the same situation again. The plan is to cancel his credit cards. I don't know why they're not already canceled, but call me old-fashioned, and use this as a genuine financial research and have him remain debt-free for the rest of his life. What professionals should we engage with? Financial counselor, probably, debt counselor, potentially, financial advisor or planner, no, won't need that, or something else. Is there someone who can sit down with us to go through my dad's income, expenses, debts, paperwork, and help create a budget? What can be put in place to prevent him with his history of overspending from taking on debt again?

What should I aim to do before I pay off the debt? What support can my dad get after the initial debt is resolved? Any other issues I may have missed? Now, there was John in the comments. The anonymous poster did say, there is a family home that he's owned, and a wife, and they keep their money separate.

John Pidgeon (3:53)

Right. So husband and wife living in that particular home.

Glen James (3:57)

In the family home that they own outright.

John Pidgeon (3:59)

Okay. But doesn't say where the inheritance came from?

Glen James (4:02)

No.

John Pidgeon (4:03)

No.

Glen James (4:03)

Okay.

John Pidgeon (4:04)

And there's no mortgage?

Glen James (4:06)

No, it's owned outright.

John Pidgeon (4:07)

So, okay.

And yeah. Okay. All right. So...

Glen James (4:13)

Like, what are you doing in this sitch?

Well... It got a lot of comments online.

John Pidgeon (4:18)

Oh, it would have.

First of all, it's unfortunate to see someone at that age being in that financial position. There's obviously some bad habits consistently over the years. And we talked about business troubles and everything else. So, it's all culminated in, this is where we're at. Now, we're extremely lucky and fortunate that there is that 200k available to rid some debt. But if we don't change the underlying facts, or the underlying conditions that got us there in the first place, where nothing's going to change, is it? The leopard and the spot. So, yeah, I think the first thing is, and you sort of mentioned it tongue in cheek, is we've got to cut off the source.