Author Topic: What to do with cash now?  (Read 2634 times)

Nash3222

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What to do with cash now?
« on: November 01, 2020, 04:13:39 PM »
60 years old, want to retire NOW ( health care worker burnout going on).

Have about 800k in cash, no debt--ZERO, ZILCH!!!!,,,House car, etc paid off.

Biggest concern is frigging HEALTH CARE COSTS till Medicare eligible at age 65.

Leery of stock market for next 6-12 months due to Election, Covid , mortgage failures etc etc.

So what would you do with that much cash now?

bbqbonelesswing

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Re: What to do with cash now?
« Reply #1 on: November 01, 2020, 05:17:31 PM »

ChpBstrd

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Re: What to do with cash now?
« Reply #2 on: November 01, 2020, 08:54:23 PM »
Cash is earning you nothing.
Bonds would earn you nothing.
Stocks don't sound right for your risk tolerance (e.g. you'd sell if they dropped 30%, I assume, plus you are right at retirement age.)
A lifecycle ETF would just be some mix of the above.

There aren't that many remaining choices, but here are some of them:

1) You could buy a large portfolio of rental properties in many areas of the U.S. that meet the 1% rule. If this is not where you live or you do not want to run a business never mind.

2) You could sell put options at a price where you'd be happy buying. E.g. WAAAY out of the money. This activity could potentially earn you 4-6% a year. E.g. SPY put options expiring Dec.17, 2021 at the 230 strike (current price is 326.54) might be had for 9.58. This would provide about a 4% return on the cash you'd have to hold to secure the option, and you'd only be assigned if the market fell another 30%ish.

3) You could buy call options. For about 10-11% of your money, you could buy the rights to buy as many shares as you could have bought today, in about a year. This gets you through a lot of today's acute risks, while helping you avoid missing out on a potential rally, and only puts 10% of your money at risk. E.g. SPY Dec. 17, 2021 calls at the 327 strike cost about 32.34. All upside and only 10% potential downside.

4) Certain value stocks are cheap, such as nursing home REITs and some banks (e.g. OHI, BNS, NHI). Some of these, like MAA, even have preferred stocks.

cool7hand

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Re: What to do with cash now?
« Reply #3 on: November 02, 2020, 04:16:16 AM »
Try asking Dr. Google about Ray Dalio and his All-Seasons (aka All-Weather) Portfolio. I think you'll research will show that it's a low volatility option. My wife and I have used it for the last five years because it fit our risk tolerance and goals. Maybe it would work for you.

BikeFanatic

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Re: What to do with cash now?
« Reply #4 on: November 02, 2020, 04:26:15 AM »
We need to know your expenses to advise you. I would quit ASAP, if you spend 40 k a year then put 3 years in cash and invest the rest. You can get an advisor that charges by the hour, free ones will try to sell you stock that benefits them financially not you. If you have no idea what you spend, just take one year of checking account statements and add up all the outflow and that is your yearly spend.
You have a paid off house and vehicle so you are fine to quit now
, and after Covid you can pick up something part time if you find you need the money.

PDXTabs

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Re: What to do with cash now?
« Reply #5 on: November 02, 2020, 07:54:08 AM »
Leery of stock market for next 6-12 months due to Election, Covid , mortgage failures etc etc.

So what would you do with that much cash now?

I'm leery of the US dollar. The last thing I would do is leave it all in cash.

Nash3222

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Re: What to do with cash now?
« Reply #6 on: November 02, 2020, 10:38:25 AM »
Try asking Dr. Google about Ray Dalio and his All-Seasons (aka All-Weather) Portfolio. I think you'll research will show that it's a low volatility option. My wife and I have used it for the last five years because it fit our risk tolerance and goals. Maybe it would work for you.

Hey Thanks , I just looked at that, will do more in depth study of it.   

What kinds or annual returns have you been getting?

Thanks.

bthewalls

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Re: What to do with cash now?
« Reply #7 on: November 02, 2020, 03:14:36 PM »
Biggest concern is frigging HEALTH CARE COSTS till Medicare eligible at age 65

Live off cash unless thereís a huge dip and put it in? Re health, retire in Northern Ireland as state provides full medical benefits for free to entire population?.....only a thought

cool7hand

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Re: What to do with cash now?
« Reply #8 on: November 02, 2020, 03:21:03 PM »
Try asking Dr. Google about Ray Dalio and his All-Seasons (aka All-Weather) Portfolio. I think you'll research will show that it's a low volatility option. My wife and I have used it for the last five years because it fit our risk tolerance and goals. Maybe it would work for you.

Hey Thanks , I just looked at that, will do more in depth study of it.   

What kinds or annual returns have you been getting?

Thanks.

Thanks for asking about performance. We don't track performance down to the penny. That works for some, and drives others like us crazy. Just eyeballing May 2019 to May 2020, we were up 12% notwithstanding Covid. But based on your interest, you should Google for those who backed tested the All Seasons Portfolio. (Here is one: https://awealthofcommonsense.com/2014/11/back-testing-tony-robbins-weather-portfolio/.)  As I recall, it was quite competitive with lower volatility.

What has been particularly rewarding is how well it performed during Covid. While the stock market was dropping, we hit our all time high as everyone ran to bonds and gold and those holdings ballooned in value. When the market was down 30 plus percent, we were down only 10. We also rebalanced as much as weekly during high volatility, and as you would expect, the math had us buying stocks as everyone ran from them. Suffice it to say that this has been an amazing year.

kenmoremmm

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Re: What to do with cash now?
« Reply #9 on: November 03, 2020, 01:31:16 PM »
I'm leery of the US dollar.
elaborate?

PDXTabs

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Re: What to do with cash now?
« Reply #10 on: November 04, 2020, 12:09:32 PM »
I'm leery of the US dollar.
elaborate?

Between political uncertainly from the elections, economic uncertainty from COVID-19, and possibly massive deficit spending and associated Fed help I would rather hold equities than US dollars in case we continue to see the dollar devalued.

Hawaiian

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Re: What to do with cash now?
« Reply #11 on: November 13, 2020, 06:09:47 AM »
I'm leery of the US dollar.
elaborate?

Between political uncertainly from the elections, economic uncertainty from COVID-19, and possibly massive deficit spending and associated Fed help I would rather hold equities than US dollars in case we continue to see the dollar devalued.

I'm with you on that and I'm sure there are many others that are wondering what to do with their cash and investments right now and throughout this entire year!

Anyone else have suggestions where to hold cash or investments? I was about to dump some cash into index funds but I'm also leary of that too right now.

cincystache

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Re: What to do with cash now?
« Reply #12 on: November 20, 2020, 05:45:35 PM »
regarding healthcare... if you quit wouldn't your income go to zero and you would qualify for some massive subsidies from the ACA? I'm always confused when I hear people complain about high health insurance costs during early retirement. If all you have is 800k in cash earning 8,000 per year in interest, at best, your health insurance through ACA would very cheap (less than $100 per month probably after subsidy)

I confess I've never been on ACA but for those that are, is this how it would work or am I missing something?


bthewalls

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Re: What to do with cash now?
« Reply #13 on: November 23, 2020, 02:26:11 PM »
I'm leery of the US dollar.
elaborate?

Between political uncertainly from the elections, economic uncertainty from COVID-19, and possibly massive deficit spending and associated Fed help I would rather hold equities than US dollars in case we continue to see the dollar devalued.

I'm with you on that and I'm sure there are many others that are wondering what to do with their cash and investments right now and throughout this entire year!

Anyone else have suggestions where to hold cash or investments? I was about to dump some cash into index funds but I'm also leary of that too right now.

Iím just building the monthly deposit into the trading account and set up trade order...