Author Topic: $100K Suggested Investments  (Read 3515 times)

Rollin

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$100K Suggested Investments
« on: May 01, 2014, 08:57:21 AM »
As a continuation of this thread - http://forum.mrmoneymustache.com/real-estate-and-landlording/another-rent-vs-sell-scenario/ - I wonder where I should start researching on what to do with the majority of my house sale (rental house #3) proceeds.  I know I am counting my chickens before my eggs hatch (haven't sold home #3 yet), but the information I gain here will help me solidify my decision to sell (or possibly keep as a rental for one more year).

Home/house #1 - where I live, keeping
Rental house #2 - rented out, keeping
Rental house #3 - likely selling with proceeds exceeding $125,000

I'd like to keep the number even for discussion purposes at $100,000.  So, where can you all direct me to invest this?  Should I go with tax sheltered or not?  Break it up into increments? Etc.?

Here is some information that may help you point me in the right direction to do more research:

Age today: 52.5
FIRE Goal: 57 (4.5 years)
457K (retirement plan): $250,000, adding $17,500/year until 57 and may increase by $5,000/year, with goal of $400,000 at 57.  No penalty for withdrawl at 57 if needed, only pay taxes.
DW's IRA: $15,000 total
Social Security planned to be taken at 62
Employer Sponsered Retirement: $24,000+/year at 57
Life Insurance Annuity: $16,300/year tax free 'till I die (still alive at 105! is my goal)
Rental house #2 (after selling the one I'm discussing): net $6000/year
Current taxable income: $145,000/year
DW's potential income goal: $24,000/year starting next year at age 53 to 62 (she will work after I retire)
Debt (after sale of rental house #3 and pay off $44,700 LOC): $190,000 on primary home/house #1, with 14 years left at 2.85% (no deduction on interest since I don't have enough personal deductions to exceed standard deduction).  Value is $275,000.
No other debt

Expenses ??? Good Question - Face Punch me baby!, but definately less than income/take home pay even with family of 5, I bike to work regularly (and take the bus), no TV cable, have an 11 YO van and a 8 YO SUV for the DW, solar on the roof, etc.

Need any additional information?

What do you say fellow Mustachians??
« Last Edit: May 01, 2014, 12:25:16 PM by Rollin »

matchewed

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Re: $100K Suggested Investments
« Reply #1 on: May 01, 2014, 09:19:20 AM »
Come up with an asset allocation and investment policy which will help you get to your stated goal. Invest the 100k accordingly.

Rollin

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Re: $100K Suggested Investments
« Reply #2 on: May 01, 2014, 02:44:56 PM »
Come up with an asset allocation and investment policy which will help you get to your stated goal. Invest the 100k accordingly.

Sounds quite simple. :)

I didn't include my goals for the money - that would relate to my desired assest allocation, so thank you for pointing that out.  As far as an investment policy, I do not know what you are referring to.

I would like to maintain as much capitol as possible and am not very risk tolerant with this.  My investment horizon short-term at 5-years.  Based on some of the comments in my other thread, I was looking for something that was better than paying down my mortgage and saving 2.85%.  So, that tells me I'm looking for a conservative investment, and one that does not provide an income since I will be working during this time.
« Last Edit: May 01, 2014, 06:18:02 PM by Rollin »

matchewed

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Re: $100K Suggested Investments
« Reply #3 on: May 01, 2014, 03:50:05 PM »
http://www.bogleheads.org/wiki/Investment_policy_statement

Basically a plan or project outline. Think of your FIRE as a long term project. The investment policy statement is designed to be your framework for that project.

hodedofome

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Re: $100K Suggested Investments
« Reply #4 on: May 01, 2014, 07:59:39 PM »
Conservative is a relative term, but to me, I'd be hard pressed to find a conservative investment that paid almost 3 percent a year for 5 years after taxes.

Rollin

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Re: $100K Suggested Investments
« Reply #5 on: May 02, 2014, 01:45:15 PM »
Conservative is a relative term, but to me, I'd be hard pressed to find a conservative investment that paid almost 3 percent a year for 5 years after taxes.

I wouldn't mind something above 3% after taxes as a starting point.  If I pay down my mortgage that would mean 2.85%.

clifp

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Re: $100K Suggested Investments
« Reply #6 on: May 02, 2014, 07:10:16 PM »
Above 3% after taxes, you are pretty much limited to equities, and fairly long 10-20 year muni bonds of medium credit.  The muni bonds carry interest rate risk, and some modest credit risk.

RapmasterD

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Re: $100K Suggested Investments
« Reply #7 on: May 04, 2014, 05:35:16 PM »
Come up with an asset allocation and investment policy which will help you get to your stated goal. Invest the 100k accordingly.

Type this on a PowerPoint slide, blow up the font size to 50 point. Center it. Print it out. And live by it.