What to do with an extra $30k cash

[EchoStache]

Hey gang.  Trying to make sure I make an optimal decision regarding $30k in extra cash that I have due to student loan cancellation. 

Important info:
-7+ years from FI
-$47k in savings including the $30k
-$20k in Ibonds that will possibly serve as part of my emergency fund
-Emergency fund will be $30k

AFAIK, time in the market i.e. lump sum outperforms DCA 75% of the time. I don't want to speculate, but I also don't think it makes sense to blindly follow general rules while completely ignoring current circumstances.  There seems to be an above average chance of recession in the next 6-12 months so perhaps it makes more sense to DCA for 6 months or so while the market potentially declines.

Given the above average chance for recession, maybe it makes more sense to grab the 100% guaranteed current rate on Ibonds with the max I can put in there(another $20k).

I'm ok leaving only $17k in savings for my Emergency fund while the $20k I already have in Ibonds matures for another 6 months or so.

Thanks!

[wageslave23]

I'm confused. Just because your loans were cancelled doesn't mean you have an extra $30k. Don't you just have a few hundred extra dollars every month to invest?

[ATtiny85]

"I don't want to speculate, so let me speculate" - That has cost many billions of dollars of lost growth for many people.

Either you believe the market will go up over time or you don't. I believe it will, so I invest money when I have it. The large sum I invested in equities last year has not looked so good so far, but the ones I bought every month since the 90s up until then surely do. Even though sometimes it looked bad. I have full confidence that even the Dec 2021 dollars invested will look pretty darn good in 25 years when I need to sell them to fund a new toy.

[PDXTabs]

I voted for "$10k into Ibonds and balance into the market" but honestly it kind of depends on some other factors like your total net worth, risk tolerance, monthly expenses, and commitments.

[solon]

I think you're overthinking it. Just follow the investment order. https://forum.mrmoneymustache.com/investor-alley/investment-order/

[EchoStache]

I'm confused. Just because your loans were cancelled doesn't mean you have an extra $30k. Don't you just have a few hundred extra dollars every month to invest?

I was in the process of paying off my student loans.  I started piling up cash instead when cancellation became a possibility.  So I actually do have the $30k in cash that I was holding to pay off the loans if cancellation didn't come to pass.  It's been sitting in savings, along with my "normal" savings.

[BlueHouse]

I'd just dump it all in so you can stop worrying about it. 

[Captain Cactus]

I voted for "$10k into Ibonds and balance into the market" but honestly it kind of depends on some other factors like your total net worth, risk tolerance, monthly expenses, and commitments.

Love that movie quote in the picture…I thought the same thing when I saw the headline ;)

[Captain Cactus]

OP, I was/am in a similar situation.  I have been holding a chunk of cash (several multiples of your amount) that I saved up for a DP on a vacation condo.  Then the real estate world went to bonkers and now I’m sitting on a huge egg. 

A part me me is holding out in case the real estate market sinks but I have a suspicion it’s gonna keep going up in the place I have in mind and know I should just invest it.  Can’t pull the trigger though.