What to do with $100k cash?

[ObgynMD]

I like the idea of funding the kids 529. Maybe could even do 25k for each kid in a 529 and 50k for yourself in something like VTSAX.

0.35%!? wow

If I could reverse time, I would have said rent instead of buy if you’re unlikely to stay in a home for < 5 years. But that’s not a huge deal. Many would disagree with me. You are saving >30% and maxing out your retirement funds. Your gonna kill it in the long run 👍. I’m just a few years ahead of you career wise and have hit the two comma club without even knowing it until this year. You are not far behind!! It’s so cool to see how far others on the forum are in their stage of life by just doing the boring-ole index funds in their taxable accounts. I like how ‘boring’ looks.

I’m not so sure about Bitcoin. Dogecoin and catcoin, meh. But if there was a Bobacoin I’d buy it! (jk.)

[endo4jc]

“I've considered just plugging the money into my brokerage, but this feels boring, but likely the correct answer.”

What was your real question?
If you want excitement, tell the wife you plan to save a new downpayment in the next 5 years. Shoot for 20%, Don’t know what interest rates will be.

Fair enough. I suppose my real question is a mental exercise in what the most efficient thing to do with the money is.

To explain why we have so much cash:
-I received a personal injury settlement in February 2020 after I was a pedestrian struck by vehicle. Used a portion of this to upgrade my spouse’s vehicle (paid in full) for the safety upgrades for the baby. I inherited my spouses paid off vehicle. Both Hyundai’s.
-I put the remainder of the settlement in a 13 month 2% Ally CD in beginning of March 2020 as we were earmarking the money for a 20% downpayment last year. Later found out that I wasn’t eligible for a conventional loan since I didn’t have two years of tax returns as an independent contractor. I was even turned down for financing for a physician loan by a company reportedly specializing in physician loans for not having two years of tax returns as an IC.
-Started a 529 for baby #1, just putting $500 a month in until my loans are paid off.

We were planning on staying in the home hopefully through our kids elementary school, but some new developments have led to considering moving early.

[endo4jc]

80 VTI/20 muni bond

Why municipal bonds?

[xraygoggles]

Why municipal bonds?

I dunno, seems prudent, for rebalancing I suppose.

[Hatton]

Why municipal bonds?

You hold them in a taxable account and pay no tax on the interest. OP is a relatively new investor and the money is coming from a CD. Risk tolerance unknown.

[xraygoggles]

Oh, right, I thought OP was asking why have bonds at all...

Yes, munis are always recommended for people in high tax brackets, when placing in taxable account.

[endo4jc]

You hold them in a taxable account and pay no tax on the interest. OP is a relatively new investor and the money is coming from a CD. Risk tolerance unknown.

I understand that. I am relatively new since I’ve been in practice less than two years, but I have read several of the recommended personal finance books. I don’t really see the point of the municipal bonds at my ago (nearly 34) if I still have student loans. Between retirement accounts and taxable, we are putting away greater than $100,000 so far per year.

[Hatton]

I understand that. I am relatively new since I’ve been in practice less than two years, but I have read several of the recommended personal finance books. I don’t really see the point of the municipal bonds at my ago (nearly 34) if I still have student loans. Between retirement accounts and taxable, we are putting away greater than $100,000 so far per year.

I said that because you are untested by a major bear market. 100% equity can panic people into making bad choices.

[Cool Breeze]

Not that you'll listen, but BTC and don't look back.

Or listen to anyone else. You will see.

You're welcome.

[braindoc]

I've recently had a 2% CD mature and am not interested in plunking the money back into a CD. I feel cash heavy at this time. My spouse prefers cash.

I am considering keeping a portion of the money for an EF, using it towards my student loans, investing or speculating.

Summary:
-Less than 2 years into surgical subspecialty practice. Nearly 34 years of age.
-S-Corp
-Saving 30% of gross income towards retirement (backdoor Roth x2, solo 401k, HSA maxed; remainder in brokerage).
-Mostly total domestic and international stocks. A small amount of Apple and Tesla in my Roth IRA (basically what I saved in my Roth during residency).
-Approximately $178,000 student loans at 0.35% interest due in 4 years. Making minimum monthly payment ~$3,773.
-Recently purchased home with physician loan, 5% down, 3.275% interest. Unlikely that we will stay in this home for more than 5 years. Plan to stay local for work unless I'm fired.
-Spouse stays at home. 20 month old child. Second child due June 2021.
-Student loans and mortgage only debt.
-Current net worth is positive.

I don't feel that I need a large cash EF since the brokerage is in the six figures. But this would make my spouse more comfortable, which is wise.

I have considered depleting the cash reserves over the next 14 months and paying off my student loans on my 35th birthday. This is an arbitrary number. Feels silly to pay it off faster than I need to given such a low interest rate, though I do believe that "the borrower is slave to the lender" as noted in Proverbs.

Am I able to get another physician loan (5% downpayment or less) while I currently have a physician loan? This is assuming we transition to a different home in less than 5 years. I don't want to keep the cash in a high yield savings (0.5%) account during that time for a traditional down payment if I can indeed get another physician loan.

I've considered just plugging the money into my brokerage, but this feels boring, but likely the correct answer.

I've considered speculating in Bitcoin/Ethereum, but I honestly haven't even looked into how to purchase this. I would feel pretty stupid if I lost it all.

What would you do?

0.35% interest rate? how?

[endo4jc]

0.35% interest rate? how?

Luck with refinance timing. I refinanced as a resident from 6.8% to 4.85% several years ago. I am an independent contractor less than two years out, and tried to refinance in January 2020 with SoFi, which declined me due to not having two years worth of income statements. I refinanced with Earnest in February 2020 to a 5 year variable date at 1.89%. After the Federal Funds Rate fell to almost 0%, my interest rate slowly fell to 0.35% and has been there for several months.

[ihavenonickname]

What did Earnest need for proof of income? I’m also a IC and S Corp. I’m getting what sounds like the same run around about 2 years tax returns looking for a mortgage

[RJB]

Dave Ramsey would say pay off the loan, "debt is dumb!"

I tend to agree with the emotional argument for paying off debt. When I finished paying off my wife loans, and starting putting that 2G into other places in my budget, I felt like I got a raise, it was great!