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Where to put house sale money

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  • Where to put house sale money

    I'll be selling my house and get a 500K check. The house is paid off. We will use the money to buy another house in 2 years and rent in the meantime. Where is the best place to put the money for 2 years?

  • #2
    Do you plan on paying cash for the house or would you consider a mortgage?  I assume you do not have other high interest debt and assume you are fully funding your retirement accounts.

    We are still near historic mortgage rate lows.  If I were in your shoes, I would put about $150,000 into a high yield savings account so it will be there for as a down payment for the next purchase.  I would invest the rest in a taxable account (something like a 3-fund portfolio).

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    • #3
      No mortgage. No debt. Financially independent nest egg with portfolio that needs no attention.

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      • #4
        wow, need a lot more information to answer a question like this, i think.

        generally if you need the money in two years, market is not advised.  if you look at threads, there is a lot of uncertainty about market right now in particular.

        mortgages are still cheap but no idea in two years where they will be.  if you don't mind taking some risk, and having a mortgage should things not go as anticipated, index funds may be reasonable.  however, look at all the threads asking if we have the stomach for 50% reduction.

        i say all the money goes into high rate cd or savings account given the (limited) information you have provided.

         

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        • #5
          Do you plan to move to a different area?  Do you plan to buy a more or less expensive house?

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          • #6
            Wouldn't invest it. You'll likely need to split the money across 2 banks to insure it (FDIC). Usually 250K limit.

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            • #7




              No mortgage. No debt. Financially independent nest egg with portfolio that needs no attention.
              Click to expand...


              hmm.  maybe you should be telling us where the rest of us should be putting our money.  

               

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              • #8
                Ha! The forum isn't for beginners only, although there is a thread for beginners.

                Just looking for advise on best place to park 500K for 2 years. Savings, CDs, MMA, ultrashort munis, other?

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                • #9
                  Do you know where the winds will take  you in two years?  perhaps finding a property now instead of then?

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                  • #10
                    We for sure will be renting for 2 more years.  Will probably buy a little more expensive house (200K more) but will cover the difference with some of work pay for the next 2 years.

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                    • #11
                      AMEX Personal Savings 2 accounts 250K x2 @1.17% +/- Peer Street in 100K tranches @ 9%(out of Cali) look at defaults. Or XOM @4% @76.50 if you can get it. CDs 2.nothing % locked in at 5 years is painful. Get your 1.something % or deploy @ Peer Street or Market @ 5%

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                      • #12
                        Really??

                        This is America. If we really have to worry about the FDIC cap, I'd think we have much larger problems to deal with.

                        I mean, I agree with you 100% in theory... but if that's really an issue, yikes.

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                        • #13


                          If you managed to MFJ and get 500k tax free.. that's awesome. Otherwise 1031 into another property?

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                          • #14
                            If you are in the top tax bracket and will be needing the money in 2 years, go for tax free muni's.  The returns should be around 3% tax free.

                            The even more conservative route is Ally Bank or something similar at 1.5% interest, but it is fully taxable so not much earnings left there after tax if you are still employed and not retired.

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                            • #15
                              I'm not so sure about the munis.  While there probably isn't much principal risk, there is interest rate risk if you go with an intermediate duration bond fund, which could reduce returns in a two year window.

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