I would say my job is pretty stable but it's also politically sensitive and you rely on a good manager to back you up. Recently I have gotten a manager whom is a 180 from my last, not trustworthy, trashing people on reviews, lying, micro-managing, etc. Needless to say I am not sure how much longer I will last. I may stick around long enough to find another option, transfer, and/or just quit if it doesn't get better.
That being said, we have been shopping for a house for awhile, put out several above asking price bids and been shot down. With how uncomfortable/unhappy I am at my job, I just don't think we can rely on my income anymore. I may want to quit within the next few months and go back to school or pursue a different career(I don't have all this figured out yet).
Question is What should I do with the down payment money? We have been trying to buy a house for almost a year(very competitive market here) and it's definitely been painful watching it accrue 1% interest only rather than race up with the stock market. But we all know that could have gone the other way and then I would have been looking at 30% less down payment right.
Now that I may be pausing for 6 months to a year....to who knows it could be another 3-5 years(if I go back to school)....is it best to put the money in the stock market? Or....since I'm not sure on the exact timeline would a 60/40 fund be a reasonable way to risk a little but not the whole thing?
Thanks for any help. I have posted our life situation below:
Life Situation: IRS filing status Joint, no dependents, live in collegetown in the northwest. Was a low cola but this is changing fast. Used to be you could get a luxurious house for $250,000 but now anything that is in this price range is going to be in a less desireable area, super small, or super crappy.
Gross Salary/Wages: Together we make $115,000 year gross wages. (Me: 77k. Her:38k
Pre-tax deductions/Savings: Currently we are doing 18000 on her deferred comp(maxing out her paychecks). She has an 8% contribution with a 5% match. I have a 5% match with a 5% contribution. Since we could live off of our down payment money I am thinking it may be a good idea to just max everything out and live frugally, and if we needed a few thousand bucks over the year we could always access the down payment money. Thoughts?
Other Ordinary Income: None
Qualified Dividends & Long Term Capital Gains: None
Current expenses: I would estimate we spend about $2000-3000 a month on regular monthly fixed expenses and pleasure expenses. We are frugal on big things like car(one 14 year old car and 825/mo rent) but maybe go out for fancy drinks more than we should :P
Assets: No assets other than a $3000 car. We are shopping for a newer used car now but not really in a hurry. Our car is a 2003 Toyota Corolla.
Liabilities: No loans. No debts.
Specific Question(s): Here is my situation:
Currently we have about $83,000 saved up for a down payment(cash/liquid act) and about $5,5000 in a Roth Account ear marked for emergencies. I also have another 2500 in a deferred comp account from an old job(so it can be cashed out at anytime--we will have to pay taxes).
Our retirement accounts approximate about $120,000.(Mostly traditional tax deferred accounts(TSP, 403b, TIRA, deferred compensation for wife.). I can break this down more if anyone wants. In the past we have mostly been piling into our down payment savings so we could really get a good down payment. So our retirement savings aren't as strong as they could be. Recently I have ratcheted that up and am fully depositing my wife's paycheck into her deferred comp, while she is also doing 403b of 8%(employer matches 5%), and I am doing 5% into TSP(employer matches 5%) I think we are pretty good savers but maybe not as extreme as some in the FI community.
At this point I anticipate we will have saved about $34,000 in tax-deferred savings by end of year. We definitely could do more if we were less focused on the house.
Other details:
Current rent: 825 a month(our landlord is quite generous and does not raise rent so we are locked into pre-housing boom rates)
Average rent for similar house as we are considering buying: $1400 to $1600
Incomes: Both are generally stable. I don't see huge jumps in income but steady steps. My job is stable but sensitive at times due to political nature of my work.
Future: We plan to have 1-2 kids starting within the next year. We may wait for my income/job situation to stabilize a little here.