Author Topic: Recommendation for Mid Term investment  (Read 635 times)

Octotat

  • 5 O'Clock Shadow
  • *
  • Posts: 7
  • Location: Eastern Tennessee
Recommendation for Mid Term investment
« on: April 24, 2017, 08:22:06 AM »
Hey all,

I am planning to FIRE next year, and I currently have a lump sum of cash (approx 100k) that I want to invest for income.  I'm 52, and plan to retire at 53.  I really need this to add to some income until I can start to take out small portions of 401k and IRA investments.  My main source of income will be a post-FIRE business with a big ? on what that income will be.  I will also be living rent free at the new locations (hotel business) and will have approx 2k / month from my house rental.
 
Things bouncing around in my head are a single mutual fund (but which one?), several funds, maybe some REITs and bond ETFs.  I am hungry for yield, but don't want to risky considering the 7ish year time frame.   

Would love some thoughts and ideas.

Thanks,
Octotat
 

L.A.S.

  • Bristles
  • ***
  • Posts: 342
Re: Recommendation for Mid Term investment
« Reply #1 on: April 24, 2017, 09:10:54 AM »
I think lots of people are hungry for yield these days.  From my point of view, I see a huge wave of baby-boomers leaving the work force and deciding they just can't stomach stock volatility after watching what happened during 1999-2002 and 2007-2009.  So they are bidding up bonds, fixed income, and bond-like investments.  This is a bad omen in my opinion.  Investors are also going for longer terms, and lower credit quality buy buying long dated bonds and high-yield (i.e. junk) bonds in order to reach for higher income returns.  The result is that these types of assets are possibly richly valued right now.  There could be an extended period of low returns, or a sharp correction in prices as the yield on these investments and spreads revert to the mean.

I would suggest that you should invest this lump along with your pre-determined asset allocation.

Perhaps look into taking a 72(t) withdrawal from the retirement accounts if you are certain you have enough money to FIRE except for the fact that it is tied up in retirement accounts.  If you need to hold off on drawing from them entirely, perhaps you're not ready to FIRE?

Car Jack

  • Bristles
  • ***
  • Posts: 412
Re: Recommendation for Mid Term investment
« Reply #2 on: April 24, 2017, 11:26:05 AM »
I can tell you how to get 2.3% in 5 years.  Better than that, I only know how to scatter the money around to various accounts that give you good returns (5% plus) on the first portion of your investment and nothing beyond that.  Good luck.