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Learning, Sharing, and Teaching => Case Studies => Topic started by: kcore2000 on December 19, 2019, 07:11:18 AM

Title: Case Study – Sold House, Where to Invest Short-Term? (≈3-5 yrs) and Long-Term?
Post by: kcore2000 on December 19, 2019, 07:11:18 AM
Current situation ... I'm engaged :) and money is flying out accounts for wedding planning. :(

That being said. I sold my house and moved in with my fiancé. After the sell I have around 60K in equity that I would like to invest both short-term and long-term. I would like to invest 50K short-term that we would use to buy or build a house in ≈3-5 years. Then I would like to put 10K of it long-term ... below is my current asset allocations percentages.

AssetPercentage
CASH41%
Employee 401k - 2050 Portfolio (Roth)23%
Vanguard Total Stock Market Index Fund (Roth) (VTSAX)23%
Vanguard Total Stock Market Index Fund (Roth) (VTIAX)7%
American Funds Capital World Growth and Income Fund® Class F-1 (CWGFX)3%
American Funds SMALLCAP World Fund® (SCWFX)2%


Thanks in advance!
Title: Re: Case Study – Sold House, Where to Invest Short-Term? (≈3-5 yrs) and Long-Term?
Post by: waltworks on December 19, 2019, 11:00:52 AM
Without more context, it's impossible to say. What are your combined incomes? Do you think you'll have kids in that timeframe? How much does RE cost in your preferred area? How much other money do you have invested?

In a 3 year timeframe, you probably are stuck with CDs or high yield savings account. Everything else is too risky.

But that's where the context comes in. If you're both doctors and will be making $500k/year, your $50k is meaningless. Dump it in some target date/lifestrategy fund and forget about it. If you're going to be penniless grad students for another decade, you might want to put it all in a CD.

-W
Title: Re: Case Study – Sold House, Where to Invest Short-Term? (≈3-5 yrs) and Long-Term?
Post by: waltworks on December 20, 2019, 07:05:02 AM
Quote from: kcore2000 on December 20, 2019, 06:12:05 AM
Quote from: waltworks on December 19, 2019, 11:00:52 AM
Without more context, it's impossible to say. What are your combined incomes? Do you think you'll have kids in that timeframe? How much does RE cost in your preferred area? How much other money do you have invested?

In a 3 year timeframe, you probably are stuck with CDs or high yield savings account. Everything else is too risky.

But that's where the context comes in. If you're both doctors and will be making $500k/year, your $50k is meaningless. Dump it in some target date/lifestrategy fund and forget about it. If you're going to be penniless grad students for another decade, you might want to put it all in a CD.

-W

Combined income of around 210K and within that time frame we plan to get a family started. RE isn't bad, but we live in IL so RE Taxes are ridiculous. I currently have the 50K in an employee credit union account that gets 2.00%, so It might make sense just to keep it in there?

With that combined income, $50k is meaningless in both the medium and long term. If you have short term concerns, you either have a terrible spending problem, or you have unstable jobs/lives where you shouldn't be buying a house anyway. Invest it all for the long term.

As an aside, I would not buy property in Illinois right now. I look at the financial situation of the state and think... Detroit all over again.

-W
Title: Re: Case Study – Sold House, Where to Invest Short-Term? (≈3-5 yrs) and Long-Term?
Post by: Linea_Norway on December 20, 2019, 01:29:08 PM
Try to keep those wedding costs down. If you book stuff, everything with the word wedding in front of it, is twice so expensive as without the word wedding. Like dress versus wedding dress. Flowers versus a wedding bouquet. Try to be creative and DIY whenever you can. I got married in a nice dress that was not a wedding dress and cost half wedding dress price. Nowadays I would buy second hand or let DH sew a dress.
Title: Re: Case Study – Sold House, Where to Invest Short-Term? (≈3-5 yrs) and Long-Term?
Post by: LifeHappens on December 20, 2019, 03:08:18 PM
If you have the bandwidth for it, you can use that $50K as seed money to chase bank bonuses. There are a few threads here about this. Doctor of Credit is a good source of the latest offers.
https://www.doctorofcredit.com/best-bank-account-bonuses/ (https://www.doctorofcredit.com/best-bank-account-bonuses/)