My wife’s grandfather passed a while back and we’ll be getting a piece of his estate.
I’m a “put it away and don’t worry about it” kind of person, so I don’t plan to day trade with it. Right now our mortgage rate is 3.7% and we have about $200K left on a $700K property (payoff date is 2030).
What kind of risk and reward do you want?
Gold bars and sew the cash into a jacket, of course.
How much are you getting?
Index fund.
Somewhere in the low 6 figures.
What kind of risk and reward do you want?
Low risk.
We both have a decent amount in our 401K’s, and they’re fairly diversified. I don’t mind taking the risk of being in a bubble as we’re cost averaging over the long term.
I would, however, hate to dump a lump sum into something only to find out that I’d have been better off sticking it into a matress.
What kind of risk and reward do you want?
Low risk.
We both have a decent amount in our 401K’s, and they’re fairly diversified. I don’t mind taking the risk of being in a bubble as we’re cost averaging over the long term.
I would, however, hate to dump a lump sum into something only to find out that I’d have been better off sticking it into a matress.
Consider ladder of treasuries for say 70% and then SPY for the balance
How long is the investment horizon, and how liquid does it need to be?
Low risk - you can get 5% on a high yield savings right now
Higher risk - S&P index ETF
A little higher - NASDAQ ETF
Or best, split it three ways.
Would you take out a loan/ home equity line of credit on your house to invest?
If not, put the money against the house.
The most conservative and reliable way to invest any amount of money is to get out of debt regardless of the %. My opinion is to stop paying people money you dont have to. Any “investment” is a gamble that the market will continue to perform.
Think of how much money one could invest if there is absolutely zero debt. It is also mentally freeing, career wise, to know that you are not 100% beholden to the company to pay for the house. Pay off the house in the next 18-24 months and then invest the amount that was the mortgage payment. If stuff goes crazy again (you know lockdowns, layoffs, etc) you can be financially immune.
Just the .02 from a guy who “retired” at 42.
How long is the investment horizon, and how liquid does it need to be?
5-10 years.
Not liquid at all.
Pay off the house. If anything is left buy ETF’s.
Paying off the house gives you the security of always having a roof over your head. You look at work/life balance differently when you don’t have a mortgage hanging over your head.
Given current rates, it’s hard to look past a money market fund. Most funds are yielding over 5% currently.
I agree with Ironed, pay off or pay down the mortgage. There are probably better ways to make money but a secure investment of 1 or 2 hundred thousand isn’t going to make you rich.
However, living without a mortgage is the best feeling in the world!
+1 for paying off the mortgage. I didn’t retire at 42 (those pesky kids!) but did pay the mortgage off six years ago at 42. Huge weight off our minds knowing we don’t owe anything to anybody, and not having monthly repayments has allowed us to increase how much we’re saving and investing.
Treasury yields are at 16 year highs. You have to pay Federal taxes on interest income but they are exempt from state and local taxes.
Given current rates, it’s hard to look past a money market fund. Most funds are yielding over 5% currently.
That is what I would suggest. The only risk is inflation which I don’t think is going to push past return minus taxes.
Venmo it to me.
Done.