Author Topic: I have $36,000 in cash that will need to be used over next 4 years...  (Read 1815 times)

Spendysaurus

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In 4 years my two older children will be out of highschool so the thousand dollar per month obligation I pay will be gone. In the meantime, I have bills (property taxes).  I would like to pull $4,500 every six months until the money is gone.  What investment vehicle is best for this situation? Thanks and don't be too hard on me. I know, you can't even see stubble on this stache.

Mighty-Dollar

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Re: I have $36,000 in cash that will need to be used over next 4 years...
« Reply #1 on: October 10, 2017, 10:51:30 PM »
This index fund is 40% stocks / 60% bonds. Ultra conservative. Sell off principal as needed. https://finance.yahoo.com/quote/VSCGX?p=VSCGX

NoraLenderbee

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Re: I have $36,000 in cash that will need to be used over next 4 years...
« Reply #2 on: October 11, 2017, 03:51:04 PM »
 This is not money to put in the stock market.
--The timeline is too short. You will use it all within four years; you will use some of it every six months.
--You need a specific amount at specific times, regardless of what the market is doing.

The market is for money you don't need too soon, where you can afford to ride out the lows, and/or be flexible in the amount you choose to pull out. If the market drops and stays down for a year, you'll still have to sell at a specific time, which may mean locking in a big loss; toward the end, you might not actually have as much as you need, if the market is still down. (Your last 9,000 melted into 6,000, what to do?)

Bonds and CDs are designed for this kind of situation. You give up some ROI in return for the security of a predictable return and having it when you need it.

Exflyboy

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Re: I have $36,000 in cash that will need to be used over next 4 years...
« Reply #3 on: October 11, 2017, 07:10:56 PM »
The first year's worth I'd keep as cash. The next two years worth of withdrawals in CD's and the rest in Bonds.

If you had enough cash say last beyond 5 years I'd go with stocks... But only that portion you won't need until 5 years out.

Spendysaurus

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Re: I have $36,000 in cash that will need to be used over next 4 years...
« Reply #4 on: October 11, 2017, 07:59:20 PM »
Hmmm, so very glad to see varied opinions on this.  I wasn't completely off base so I'm glad to actually be learning something lately. 

My credit union does 3% APY for up to $10,000 with their "rewards checking". I suppose first year I can keep in there. And then CD's for the next 2-3 years.

I do have an investment portfolio. It's currently all mutual funds right now but I'm going to add bonds to the mix very soon.  Thank you everybody!

Wayward

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Re: I have $36,000 in cash that will need to be used over next 4 years...
« Reply #5 on: October 12, 2017, 09:34:10 AM »
There is an article by FinancialPanther.co the Mustachian community might interested in about how to get a guaranteed FDIC insured 5% interest from Insight/Netspend.

http://www.financialpanther.co/netspend-account/

I'm relatively new to the community, but it may be worth checking out!