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  • Zaphod
    replied




    Dear WCI and forum readers,

    I am a newly graduated attending and I plan to purchase our first house. I hope you can give me your opinions. This is a question of what to buy, and not a question of rent vs. buy.

    I have a husband and no children. We have no debt, are maxing out our retirement accounts, and have about 300k in saving in a 1% high yield saving account. Now that I am more familiar with low ER index funds, we plan to slowly roll our savings into an equity portfolio, perhaps at a rate of 5k a month, instead of just dumping everything in at once in case the market crashes (is that a good idea?). We have two options in purchasing a home:

    1) Buy a 300k new house which is more than big and comfortable enough for us or any potential small children right now. Put down maybe 100k, pay the rest with a low interest monthly payment, and slowly investing the rest of our current saving and my additional monthly saving into a portfolio. In 5-6 years, we will most likely need to change to a bigger house if we were to have any children that grow to school age (such houses value around 500-600k now, but probably a lot more in 5 years to buy/build). I like this idea because we do not need a bigger house now, the smaller house has less tax, free up more cash inflow each month for investment, and also the smaller house would be much easier to sell if I were to leave my job in the next few years.

    2) Buy that 500-600k house now and live in it for the next 10+ years.

    I know there are many factors in place, but any comments would helpful. Thank you,
    Click to expand...


    You guys sound disciplined and are already off to a great start. There are a few things to consider with your questions.

    As for rolling some of your savings into a taxable account, this is a good idea overall. Whether to put it in all at once or slowly is just really trading one risk for another. In most cases, its better to just get it over with especially if you have a decades long outlook on it, it actually doesnt matter if it goes up or down initially if the ending price is the same when you withdrawal. A bear market could come tomorrow or years from, if we had any idea when we wouldnt be here of course. Though you certainly need to do more than 5k/month as it will take 5 years at that rate.

    If there is any reason you would be leaving a job in a few years you shouldnt buy any house, no matter how cheap. If the reasoning for the move is schools and not just a bigger place, its always best to buy in the better school districts in the beginning. Those are the areas where people want to be and its easier to buy/sell there than anywhere else.

    I'd do some soul searching and see which of your above options makes the most sense for your family long term, either way Im sure you guys will be good.

    Leave a comment:


  • Farfetched
    started a topic Home purchase question

    Home purchase question

    Dear WCI and forum readers,

    I am a newly graduated attending and I plan to purchase our first house. I hope you can give me your opinions. This is a question of what to buy, and not a question of rent vs. buy.

    I have a husband and no children. We have no debt, are maxing out our retirement accounts, and have about 300k in saving in a 1% high yield saving account. Now that I am more familiar with low ER index funds, we plan to slowly roll our savings into an equity portfolio, perhaps at a rate of 5k a month, instead of just dumping everything in at once in case the market crashes (is that a good idea?). We have two options in purchasing a home:

    1) Buy a 300k new house which is more than big and comfortable enough for us or any potential small children right now. Put down maybe 100k, pay the rest with a low interest monthly payment, and slowly investing the rest of our current saving and my additional monthly saving into a portfolio. In 5-6 years, we will most likely need to change to a bigger house if we were to have any children that grow to school age (such houses value around 500-600k now, but probably a lot more in 5 years to buy/build). I like this idea because we do not need a bigger house now, the smaller house has less tax, free up more cash inflow each month for investment, and also the smaller house would be much easier to sell if I were to leave my job in the next few years.

    2) Buy that 500-600k house now and live in it for the next 10+ years.

    I know there are many factors in place, but any comments would helpful. Thank you,
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