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Home 20% down vs. investment

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  • Home 20% down vs. investment

    Hello all,

    We are looking for advices in where to put our available cash of $50,000.
    Two options are on the table, (1) use it as a 20% down payment for a house ($250,000) at 30-year fixed rate of 2.625%, and (2) invest the amount in the market with 60-40 stock - bond ratio with 8.7% return (we hope ?). This "8.7%" is from the blog post (https://www.whitecoatinvestor.com/de...-stocks-bonds/).

    Thank you very much!

  • #2
    At these current rates I would put down as little on a home as you can. I know you didn't ask this question but since you are a resident, I would think long and hard about buying a home, especially since you are strongly considering going back to Canada in 5 years.

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    • #3
      Well that boat is already sailed. The house is being built from the ground up as we speak. Yup, I read the blog post on that after we signed the papers.
      So from this point forward, we are wondering what we should do with available resources on hand.

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      • #4
        I would put as little into home equity at this point as possible. Are you planning on investing in a taxable account or in one of your pre-tax accounts? Make sure you have a proper emergency fund and putting the money in the correct place.

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        • #5
          We are thinking (1) 6 month emergency fund. (2) taxable investment account in my wife's name (we are on J visa and have to file separately). Since she does not work, we figure the income taxation would be lower in her name (is this correct?).

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          • #6
            Put in in Vanguard (VTSAX) and move on.

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            • #7
              This is a bit more complicated since you are moving back to Canada after residency. I know you are planning on speaking with someone that has some expertise in this area but I'd still be hard pressed to believe not putting it into a pre-tax or Roth account wouldn't be better than a taxable account in this situation. Again, your situation is a unique one that not many here likely have experience with.

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              • #8
                you definitely need an emergency fund.

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                • #9
                  Aren't you using it to buy a Tesla?

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                  • #10
                    Haha. No, I am going to drive 2015 Honda to the group before buying anything new.

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