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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: LmoArk on August 20, 2015, 07:15:36 AM

Title: Sold two homes...keep it in cash or invest short term?
Post by: LmoArk on August 20, 2015, 07:15:36 AM
My family recently had to relocate due to a layoff and a new job in a lower COL area.  We had to move before we could sell two houses and as a result are now renting and sitting on a $550k pile of cash.  We would like to purchase something within the next 6-12 months, but so far are very disappointed with the market offerings in the area, so it could be longer.  It feels very odd to have this much cash sitting around and earning a measly .99%, but am leery of putting it into the market or in bonds if we're only going to pull it out again in a few months.

What should we do?  Keep it where it is?  Go for a bond fund to get slightly better returns?  Help?!
Title: Re: Sold two homes...keep it in cash or invest short term?
Post by: Zaga on August 20, 2015, 08:00:58 AM
I'd say to leave it in cash, but in more than one bank  because of the FDIC insurance limits.
Title: Re: Sold two homes...keep it in cash or invest short term?
Post by: Thinkum on August 20, 2015, 08:08:10 AM
I would not put it in the market. Divvy it up between 2-3 different banks so that like Zaga pointed out, it is covered/insured.
Title: Re: Sold two homes...keep it in cash or invest short term?
Post by: LmoArk on August 20, 2015, 08:58:22 AM
I would not put it in the market. Divvy it up between 2-3 different banks so that like Zaga pointed out, it is covered/insured.

On it!  We had an account in DH's name for 8 years so that's sitting right around $250k and I opened up a joint account elsewhere so that the FDIC insured limit jumps to $500k because we're both on it.  It also gets better interest so I'm going to load it up.

Thanks for the input.  It's what I had assumed, it just still feels strange to have that much in cash.
Title: Re: Sold two homes...keep it in cash or invest short term?
Post by: Wile E. Coyote on August 20, 2015, 10:36:41 AM
I'd keep only as much as I planned on putting into the house in cash. Do you really plan on putting that much into your house?  If not, go ahead and invest the rest.  Mortgage rates are low, so I'd prefer a mortgage and investments versus $550k of equity in a house.