Author Topic: Cash Sitting Idle-Where to Invest?  (Read 764 times)

IslandFiGirl

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Cash Sitting Idle-Where to Invest?
« on: May 06, 2019, 08:58:39 AM »
I've got about $150K sitting in a money market account that I really want to invest in (I guess?) a taxable account.  I am not sure where to start.  Of course I want to pay as little taxes as possible but still make decent returns.

My work situation is turning out to be kind of a nightmare and I want to leave within the next year, so I want to invest this money now so I can make it grow as much as possible over time.  (I guess that's kind of obvious?)

A little background if needed:

I have about $430K in an inherited IRA that I have to start taking distributions on next December
I have about $25K in a 403b
I have my Roth IRA fully funded for this year
I have an emergency fund of $20k
I have $1,000 deducted monthly for my 403b
I still have a mortgage at $1k a month.

I want to invest this cash because I can't divert anymore monthly income toward the 403b, so this is the only way I see to invest right now. 

Am I missing anything obvious?  I have my Roth & Inherited IRA w/ Vanguard, so I'd like to open this account with them to keep things all in the same place.  I would love to get some direction if y'all wouldn't mind!

Thanks so much!

PDXTabs

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Re: Cash Sitting Idle-Where to Invest?
« Reply #1 on: May 06, 2019, 09:17:03 AM »
I want to invest this cash because I can't divert anymore monthly income toward the 403b, so this is the only way I see to invest right now. 

Because your payroll department won't let you? That's understandable.

Personally I would open a Vanguard taxable account and put it all in VT, because it is simple.

IslandFiGirl

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Re: Cash Sitting Idle-Where to Invest?
« Reply #2 on: May 06, 2019, 09:31:47 AM »
I want to invest this cash because I can't divert anymore monthly income toward the 403b, so this is the only way I see to invest right now. 

Because your payroll department won't let you? That's understandable.

Personally I would open a Vanguard taxable account and put it all in VT, because it is simple.

Payroll would let me, but I wouldn't have enough money to pay expenses each month if I had more taken out.  I guess I could divert my paycheck to the 403b and use the cash for living expenses.  I am not sure why but I'd rather not do that.  Not sure if that is a bad decision or not...

Thanks for your answer.  I'll do some reading about VT.

MustacheAndaHalf

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Re: Cash Sitting Idle-Where to Invest?
« Reply #3 on: May 06, 2019, 09:55:35 AM »
VT, or Vanguard Total World, is probably the simplest, most diverse equity investment you can make.  It contains thousands of stocks from all over the world, and you own a proportional slice of all of them.  So I'd second that "VT" recommendation.

You might want to view the expense ratio before you invest - that's a good policy in general.  For "VT", the expense ratio is 0.09%.  That includes half U.S., and half international stocks.

When you setup your Roth IRA, did you pick a brokerage firm?  Where did you invest the money inside the Roth IRA?

IslandFiGirl

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Re: Cash Sitting Idle-Where to Invest?
« Reply #4 on: May 06, 2019, 10:09:08 AM »
VT, or Vanguard Total World, is probably the simplest, most diverse equity investment you can make.  It contains thousands of stocks from all over the world, and you own a proportional slice of all of them.  So I'd second that "VT" recommendation.

You might want to view the expense ratio before you invest - that's a good policy in general.  For "VT", the expense ratio is 0.09%.  That includes half U.S., and half international stocks.

When you setup your Roth IRA, did you pick a brokerage firm?  Where did you invest the money inside the Roth IRA?

I have the Roth IRA @ Vanguard and have it in the VTSAX based on all that I've read here.  So far it has been working out great!

PDXTabs

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Re: Cash Sitting Idle-Where to Invest?
« Reply #5 on: May 06, 2019, 08:35:56 PM »
Payroll would let me, but I wouldn't have enough money to pay expenses each month if I had more taken out.  I guess I could divert my paycheck to the 403b and use the cash for living expenses.  I am not sure why but I'd rather not do that.  Not sure if that is a bad decision or not...

I'm not sure what all you want the money for in the future or your timeline to use it. I personally would spend down my savings to max out the 403b, since once it is in the 403b it will grow tax free and is additionally protected from bankruptcy. Or course, you could do both.

MDM

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Re: Cash Sitting Idle-Where to Invest?
« Reply #6 on: May 06, 2019, 09:48:17 PM »
I guess I could divert my paycheck to the 403b and use the cash for living expenses.  I am not sure why but I'd rather not do that.  Not sure if that is a bad decision or not...
With only that information to go by, it does seem a bad decision.

What holds you back? 

IslandFiGirl

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Re: Cash Sitting Idle-Where to Invest?
« Reply #7 on: May 06, 2019, 10:18:31 PM »
I guess I could divert my paycheck to the 403b and use the cash for living expenses.  I am not sure why but I'd rather not do that.  Not sure if that is a bad decision or not...
With only that information to go by, it does seem a bad decision.

What holds you back?

I think because I know I am very ready to quit my job, I'm very close to at the very least FI, so in my mind, having things tied up in a retirement account may not be as beneficial to me as having money in a taxable account.  I could totally be wrong about this though.

MDM

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Re: Cash Sitting Idle-Where to Invest?
« Reply #8 on: May 06, 2019, 10:55:36 PM »
I think because I know I am very ready to quit my job, I'm very close to at the very least FI, so in my mind, having things tied up in a retirement account may not be as beneficial to me as having money in a taxable account.  I could totally be wrong about this though.

Define "tied up" - after reading How to withdraw funds from your IRA and 401k without penalty before age 59.5. :)