Hey all,
Looking to get some advice on what to do with $80k of cash, but first some background:
Background:- Soon to be married (end of next year)
- Combined salaries: $170k
- Maxing 401k ($18k each) and HSA ($3,350 each) each year
- Combined spending approximately $60k per year
- After taxes, have approximately $35k of money in taxable accounts after expenses, per year
In prior years, we had lots of student debt, and did not start maxing our pre-tax contributions until recently. Thus we have saved up ~$80k that we have already paid taxes on. We should have ~$35k of after-tax money a year to invest outside of our pre-tax investments, and we are looking for some investment ideas.
We are currently renting an apartment. We live in a small Midwest town that has basically one major manufacturing company in the area. If this company ever ran into trouble and entered bankruptcy, the entire town would likely default and become a ghost town. As a result, we are terrified of buying a home here as that is a lot of capital tied up essentially in the success or failure of one company.
Thus we were trying to decide what to do with the extra money:
- We will start contributing to a ROTH, but that still leaves some money to be invested
- We could buy a rental home
- Buy near our town, but in a more attractive market, in order to do maintenance if needed?
- Buy in a location we would like to retire in?
- Buy more index funds, after tax?
- Something more unconventional like SoFi?
What do you guys do with your funds after you have maxed out your pre-tax investments? Are we thinking correctly about the risk associated with buying a home in our area?