Author Topic: Best Untouched Cash Stash for 24-36 Month?  (Read 1964 times)

apricotfuzz

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Best Untouched Cash Stash for 24-36 Month?
« on: January 01, 2020, 12:56:33 PM »
Hey Moustachios,

Long time reader, first time poster.    My wife and I are in a ridiculous lucky position to be debt-free, maxing IRA contributions and recently sold a home.

Proceeds of home are headed into 529s for newborn kids and a -eventually- an addition for our home.  We're not in a hurry, we plan to remodel summer of 2022 or 2023.  Money is currently sitting in ~1.78% savings account (Barclays). 

Question:  Given that we're unlikely to touch this money for 2-3 years, is there a better option?

Thank you all and mightily appreciate the wisdom I've already gained here!

Rob_bob

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #1 on: January 01, 2020, 04:57:06 PM »
Well if you don't mind some mild volatility you could look at PIMCO's short maturity bond fund, MINT, currently yielding 2.71%

Or Wisdom Tree short term, SHAG, yielding 2.74% which also has a slightly lower ER.

apricotfuzz

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #2 on: January 01, 2020, 07:18:57 PM »
Thank you sir!  Those were not on my radar- will definitely look into.

TheAnonOne

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #3 on: January 02, 2020, 10:37:58 AM »
Hey Moustachios,

Long time reader, first time poster.    My wife and I are in a ridiculous lucky position to be debt-free, maxing IRA contributions and recently sold a home.

Proceeds of home are headed into 529s for newborn kids and a -eventually- an addition for our home.  We're not in a hurry, we plan to remodel summer of 2022 or 2023.  Money is currently sitting in ~1.78% savings account (Barclays). 

Question:  Given that we're unlikely to touch this money for 2-3 years, is there a better option?

Thank you all and mightily appreciate the wisdom I've already gained here!

As long as you are not "in a hurry" and don't really have a defined timeline for this. I would just dump it into VTI/VTSAX. If it goes down, you postpone the remodel, with a decent chance of it growing 20-30% in that timeframe.

apricotfuzz

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #4 on: January 02, 2020, 08:17:29 PM »
@ TheAnonone

I've considered it.  Have to convince my spouse to postpone if it goes down.  I'm more flexible on the timing then she.  But the allure of that sort of potential return may turn the tide...

Thanks for your thoughts!


shinn497

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #5 on: January 03, 2020, 04:32:05 AM »
I have a betterment account. It allows you to have a personalized automatic target date fund. Basically you set a date (only goes in yearly time frames for now), and the fund will automatically adjust from stocks to bonds as you close in on your liquidation date. FWIW, on the backend it also optimizes for taxes, with your entire portfolio . This is , I think, the best way of saving for short term goals.

If you don't want a betterment account to do this, you could also do it manually. But I also think it is better, behaviourally, to have it automated.

ChpBstrd

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #6 on: January 03, 2020, 09:38:53 PM »
Is the house remod a necessity or a want? If it is a want, I too would be tempted to ride at least part of it in equities and make my plans accordingly.

MustacheAndaHalf

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #7 on: January 04, 2020, 09:58:13 AM »
Or Wisdom Tree short term, SHAG, yielding 2.74% which also has a slightly lower ER.
SHAG achieves a higher yield with lower quality corporate bonds, 55% of them in the lower half of investment grade.
I'd recommend safer, higher quality bonds, and then get return with diversified equities.

If "not in a hurry" means you can delay a home remodel a few years, then you can take more equity risk.  What will your wife think if the stock market tanks, and you have to delay the remodel?  I'd suggest limiting the equity risk, maybe 1/4th or 1/3rd in equities.  Even better, diversify with something like Vanguard Total World ETF.  You can buy it at Vanguard, Schwab, or any place offering $0/trade for ETFs.  It holds half U.S. stocks, half international.

apricotfuzz

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Re: Best Untouched Cash Stash for 24-36 Month?
« Reply #8 on: January 27, 2020, 08:23:12 PM »
Thanks for all the thoughts here.  Specifically asked my better half about her risk tolerance and she said 'very low'.  Remodel is definitely not a necessity, so trying to make the best of it.

Thank you all!