Context- My husband and I recently bought a new house for $285,000, and put 20% down, for a mortgage of $228,000 @ 15 years. We also put about $50,000 into the new house to rehab it. We sold our old house and walked away with $230,000. Our original plan was to put all that money into the new house, and pay our mortgage down to $48,000 after the rehab, and be debt free quickly. After doing some more research, we have decided to invest some of that cash instead of putting it all towards the house. Statistically, we know that with a 3.875% loan, we are most likely better off putting that money into a taxable account (we alrontext- My husband and I recently bought a new house for $285,000, and put 20% down, for a mortgage of $228,000 @ 15 years. We also put about $50,000 into the new house to rehab it. We sold our old house and walked away with $230,000. Our original plan was to put all that money into the new house, and pay our mortgage down to $48,000 after the rehab, and be debt free quickly. After doing some more research, we have decided to invest some of that cash instead of putting it all towards the house. Statistically, we know that with a 3.875% loan, we are most likely better off putting that money into a taxable account (we eady max out my husband's 401K, traditional IRAs for both, and HSA accounts). However, our risk tolerance is not high enough to go whole hog into a taxable account, so we have landed at putting about half of it towards the house, and half towards a taxable investment account. We are both in our early 30s, so we have some time to let it grow. But, we have never had a taxable investment account, and know nothing about it. We are currently in the 22% tax bracket.
1. When do you pay taxes? When you sell or when/if you make a profit at the end of the year?
2. Any way to not pay taxes until after retirement, when planned income is lower?
3. Suggestions for taxable investment accounts? Right now we moved our IRAs to Vanguard in VTSAX? Should we "diversify" index funds? Is that a thing, or is going in on the same index fund with our investment account fine?
4. Any alternatives out there that pay out some sort of bonus- never had this much cash to invest- so I like the idea of getting something for it?