Author Topic: Sold house - what do with 300K?  (Read 1668 times)

openroadadventure

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Sold house - what do with 300K?
« on: August 03, 2020, 10:38:32 AM »
Hey everyone! We have FIRE'd at the beginning of this year, little did we know what we were in for!

We are about to hit the road full-time in an RV, so we sold our house. Our 401K's are all good, but now I'm about to come into $400K of cash, and I need about $25K of it per year for life expenses. I already have an emergency fund, so I'm thinking I probably need to invest at least 300K into SOMETHING.

Of course the challenge is WHERE to put it right now.  CD ladders were the plan 6 months ago, but now that's a joke. My current plan is to hold it in cash (Ally savings). If the market crashes in the next year (say to under 15K) then maybe make a move there. I think given the current environment that is highly likely.  Anyone have any better ideas on where to park $300K right now?

Thanks!!!

bacchi

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Re: Sold house - what do with 300K?
« Reply #1 on: August 03, 2020, 10:56:21 AM »
Hookers and blow?

Seriously, don't try to time the market. Put $25k into the market each month, if you have to, but get it in the market.

bloodaxe

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Re: Sold house - what do with 300K?
« Reply #2 on: August 03, 2020, 12:54:39 PM »
VTSAX baby!

v8rx7guy

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Re: Sold house - what do with 300K?
« Reply #3 on: August 03, 2020, 12:58:45 PM »
What were you planning on doing with the proceeds of the sale while you were planning your retirement before COVID hit?

Evie

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Re: Sold house - what do with 300K?
« Reply #4 on: August 03, 2020, 01:19:37 PM »
I'm assuming you have researched RV living in a time of COVID-19, but my understanding is that a lot of folks who normally live and travel in RVs have been forced to park at friend's houses because of closed campsites and lack of amenities.

openroadadventure

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Re: Sold house - what do with 300K?
« Reply #5 on: August 03, 2020, 05:22:05 PM »
What were you planning on doing with the proceeds of the sale while you were planning your retirement before COVID hit?

We were going to use CD ladders (when CD's were around 3% for 18 months). Now at 1% its pretty sad.

openroadadventure

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Re: Sold house - what do with 300K?
« Reply #6 on: August 03, 2020, 05:24:19 PM »
I'm assuming you have researched RV living in a time of COVID-19, but my understanding is that a lot of folks who normally live and travel in RVs have been forced to park at friend's houses because of closed campsites and lack of amenities.

Yes, we are definitely not as excited about this as we were 6 months ago. It has kinda been in play since last summer (we already have the RV which is sitting empty and depreciating) so it had too much pre-covid momentum to be stopped :-)

hodedofome

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Re: Sold house - what do with 300K?
« Reply #7 on: August 05, 2020, 01:25:24 PM »
VGT

PDXTabs

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Re: Sold house - what do with 300K?
« Reply #8 on: August 05, 2020, 01:27:45 PM »
VT

Dicey

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Re: Sold house - what do with 300K?
« Reply #9 on: August 05, 2020, 02:57:05 PM »
What were you planning on doing with the proceeds of the sale while you were planning your retirement before COVID hit?

We were going to use CD ladders (when CD's were around 3% for 18 months). Now at 1% its pretty sad.
Hahaha, I'm old enough to have owned CD's paying over 15%, way back in the '80's...

On point, I'd start here: https://jlcollinsnh.com/stock-series/

Coincidentally, we also purchased a new-to-us RV this year. We used it one night before the lockdown occurred. At least we bought it used. I hear that demand for RV's has soared, so it probably isn't depreciating much, which is a small consolation, I suppose.

marcus_aurelius

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Re: Sold house - what do with 300K?
« Reply #10 on: August 06, 2020, 11:32:44 PM »
80% in VTI and 20% in a Fundrise REIT. I have been investing with Fundrise the past 2 years and am happy with their performance.

Dicey

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Re: Sold house - what do with 300K?
« Reply #11 on: August 07, 2020, 12:14:45 AM »
80% in VTI and 20% in a Fundrise REIT. I have been investing with Fundrise the past 2 years and am happy with their performance.
NopeNopeNope. Given the success of WFH during the pandemic, the outlook for commercial RE isn't exactly rosy, is it? It's pretty obvs. the retail sector is going to take a colossal hit. Restaurants are closing. Populations are starting to shift. NFW would I invest that much of my portfolio the way you suggest. Past performance does not guarantee future success. This pandemic changes everything.
« Last Edit: August 08, 2020, 03:22:03 PM by Dicey »

mrmoonymartian

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Re: Sold house - what do with 300K?
« Reply #12 on: August 07, 2020, 02:12:13 AM »
Buy a house.

vand

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Re: Sold house - what do with 300K?
« Reply #13 on: August 07, 2020, 03:59:16 AM »
Should've thought about that before you sold it.

nobody

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Re: Sold house - what do with 300K?
« Reply #14 on: August 08, 2020, 12:08:14 PM »
I don't have that amount of cash on hand, but this is what I felt comfortable with...  I have been DCA (dollar cost averaging) in the market, once a week, mostly in VTSAX.  When there was quite a dip in the market starting around March of this year, I bumped up the DCA amount quite a bit from March-May.  I have since bumped it back down, and will bump it back up once the market goes back down.

Dicey

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Re: Sold house - what do with 300K?
« Reply #15 on: August 08, 2020, 12:09:41 PM »
Should've thought about that before you sold it.
We try to be helpful here. How does this response help the OP?

vand

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Re: Sold house - what do with 300K?
« Reply #16 on: August 08, 2020, 02:23:05 PM »
Should've thought about that before you sold it.
We try to be helpful here. How does this response help the OP?

OK, can I revise my answer?

VTSAX.

</stock-response>

Glenstache

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Re: Sold house - what do with 300K?
« Reply #17 on: August 08, 2020, 02:40:35 PM »
On point, I'd start here: https://jlcollinsnh.com/stock-series/


I'm likely to be in a similar situation of having a chunk to invest in several months and have been debating how to handle it given the market volatility and recognition that I have no ability to time those changes. The decision isn't about how those funds would be allocated between different accounts, but whether to dollar cost average or front load it all at once. I like the jcollins point in his blog about how DCA with a large chunk of cash actually can change your asset allocation. That is pushing me towards the front loading strategy, at least also in part because I have a 10-year timeline before it would be coming out and there is pretty likely to be some bumps between here and then anyways, so whether it happens in 3 months or 3 years needs to be accepted up front. Adjust your psychology to your investment strategy, not the other way around.

BicycleB

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Re: Sold house - what do with 300K?
« Reply #18 on: August 08, 2020, 06:18:48 PM »
There's a thread elsewhere in the forum that illustrates the value of diversification. It's called "Idiots vs Gurus". From 1970 to today, in multiple countries, it appears that "randomly" picking a wide variety of investments that include many stocks but also several other investment types has delivered a better return than most of the portfolios carefully selected by experts. The diverse portfolios were especially good at avoiding really bad downturns. They suffered in bad times, but not as much as the narrowly selected portfolios of the experts.

https://forum.mrmoneymustache.com/investor-alley/portfolio-design-idiots-v-gurus/

Investing this way would take a bit of learning at first (it's initially a confusing read). After that, probably a bit more tax work than a single-asset choice. But you could do the whole thing in an afternoon a year pretty easily if you wanted, and you might get a better risk/ reward ratio than just a stocks n bonds mix.

If I recall correctly, the menu of "random" choices had a proportion of roughly:
35% US stock
37% foreign stock
15% bonds
13% real assets (gold, REITs...)

Cash was option too. I don't think it's crazy to have some of the bonds portion in cash with interest rates so low. In any case, it seems that diversifying within the stock portion was helpful and diversifying within the non-stock portion was also helpful. By doing both, in the past the high-ish stock % was safe enough to do well despite occasional dips.

No one can be sure of the future. Diversifying gradually myself. Already FIREd with stash of surprisingly similar size, though owning a house. Good luck!
« Last Edit: August 08, 2020, 06:21:29 PM by BicycleB »

GHG7F0

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Re: Sold house - what do with 300K?
« Reply #19 on: August 09, 2020, 09:50:07 AM »
I had the same decision in late May as I sold my houses and Iím now renting until I retire. I ended up going with a 60/40 in using VTI and the G Fund. Iím up 40K so far. I only wish I sold in early April.😀

openroadadventure

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Re: Sold house - what do with 300K?
« Reply #20 on: August 17, 2020, 11:39:46 AM »
Should've thought about that before you sold it.

Well, we already have the RV. The housing market is on fire and the windfall we are getting is really good (and the house is far bigger than I need since the kids are gone). So keeping this house was just not in the cards. The way things are going, the housing market could be crap next year, along with the entire economy.