Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: I've saved up $80k USD. What should I do with it?

news.ycombinator.com

Post reply on HN
Print view View original

91–100 of 112 posts

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#91

Post by forgingahead »

basch wrote: post #74
forgingahead wrote: post #46

I would actually keep holding it in cash -- that is maybe 2 years of emergency funds if you are married/have a family? Keep it in cash, pretend you don't have it (create a separate account that is just this sitting there), continue earning and saving. Anything extra you earn after this 80k base you can invest (simple things like index funds, dollar cost average in slowly).

You could put 80K in the stock market, and if you have an emergency borrow against it at 2%.

This is terrible advice. Cash is cash, you can pay bills, buy food, get through hard times without needing to do anything but access it. Coronavirus should be showing everyone that random insane things can happen, so be conservative with emergency funds.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#92

Post by oldsklgdfth »

cityzen wrote: post #51
sneak wrote: post #10

Short answer: Dump it all in VFIAX and ignore it for about 30 years. Alternately, wait for the housing market freefall that is scheduled to hit about 180 days from now, and buy a foreclosure or two. EDIT: Cosigning the above recommendation about maxing out a Roth IRA each and every year as well, and of course maxxing out any company-matched 401(k) options.

The problem (for me) with index funds is that you end up participating in stocks for companies you may not want. For example, I don't want a penny of my money to go to Facebook, Amazon, Google, etc. Here's the VFAIX top ten holdings: Microsoft Corp Apple Inc Amazon.com Inc Facebook Inc A Berkshire Hathaway Inc B Alphabet Inc Class C Alphabet Inc A Johnson & Johnson Visa Inc Class A Procter & Gamble Co It has always b…

What do you do for retirement? Do you not have a 401k that invests in some index fund?

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#93

Post by rayhendricks »

stevekemp wrote: post #23
sneak wrote: post #10

Short answer: Dump it all in VFIAX and ignore it for about 30 years. Alternately, wait for the housing market freefall that is scheduled to hit about 180 days from now, and buy a foreclosure or two. EDIT: Cosigning the above recommendation about maxing out a Roth IRA each and every year as well, and of course maxxing out any company-matched 401(k) options.

Even if there were to be a massive freefall in housing it would take the banking system months, and probably years, to get round to processing all the mortgages which were in arrears. Foreclosure is a slow, slow, slow process even at the best of times. People can avoid paying their mortgages and still be living in a property for many years. If you're imagining something that covers a significant amount of property th…

It will be 180days + unemployment + CARES act unemployment (13w) so the better part of a year before the real defaults start. Not that it won’t happen it will be much more slow motion that most people will be comfortable with.

BTW I just lost out on buying a house, the market is still there but it is much lower.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#94

Post by rayhendricks »

neilgodwin wrote: post #9
uhnuhnuhn wrote: post #3

Nobody can answer that seriously without knowing your situation in life. Age, family, job, etc.

30, no family, software engineer, male

As someone in a similar situation, just throw it all in VTSAX vanguard or FZROX fidelity and let it sit for the next 30-40years. Dollar cost average over the next year maybe if that makes things less nerve wracking.

Obviously we are in a really crazy market right now, and while that might be disconcerting it is the case that s&p 500 has existed through 2 world wars and a Great Depression and still delivered returns.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#95

Post by Leherenn »

andrewmatte wrote: post #48

I used to be a stock broker. But right now I am not your stock broker. This is not advice. Great fundamental wisdom is that you can't (consistently) time the market but you should try to Buy Low, Sell High. That said, we experience a massive COVID crash. It's a great time to buy, but we don't know how long it will last or whether it will be long recession afterwards. Index investing through ETFs is a great way to get…

What's the reason for splitting it in 10 if you know you're going to invest it this way already?

I would assume to be more flexible and be able to change strategy if something goes wrong?

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#96

Post by imakwana »

ForHackernews wrote: post #2

https://www.schwab.com/resource-center/insights/content/does... Just invest in a broadly diversified index fund. Start here if you're a total beginner: https://www.bogleheads.org/wiki/Getting_started

Thanks for mentioning this. Bogleheads Wiki [1] is a goldmine of index investing and asset allocation insights for every stage of an individual investor's lifecycle. Highly recommended.

[1] https://www.bogleheads.org/wiki/Main_Page

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#97

Post by basch »

forgingahead wrote: post #91
basch wrote: post #74

Earlier quoted context omitted.

You could put 80K in the stock market, and if you have an emergency borrow against it at 2%.

This is terrible advice. Cash is cash, you can pay bills, buy food, get through hard times without needing to do anything but access it. Coronavirus should be showing everyone that random insane things can happen, so be conservative with emergency funds.

And borrowing can be same day, same as cash. Or within 30-45 days to pay off a credit card, using it as free float.

The nice thing about borrowing against stock is not having to sell the stock while its down, unless you borrowed so much to hit a margin call. If it's allowed, you could borrow against treasury inflation-protected securities to protect you against runaway inflation. TIPS are up 8% on the year. I'd take 8% gain for 2% cost and peace of mind that my cash isnt losing value.

80K is a lot to have in an emergency fund. Borrowing even a quarter of it should be no problem, without risk of short term margin calls.

I believe pure dollar cost averaging to be a worse choice than picking and filling an allocation with low start date sensitivity and high baseline long term returns. Even averaging in over a year isnt enough time to tackle start date sensitivity, you are better off with an array of stable equivalents, and contributing into just stock allocation over time, as you make more, than holding just cash and waiting to buy stock. Cash by itself is a sure fire way to lose money over time. https://portfoliocharts.com/portfolio/portfolio-matrix/

Some combination of total world stock market, small cap value, reits and bonds/tips, gold, cash, bitcoin. Rebalance quarterly. You'll be much more diversified than holding cash, or holding a cash plus a mutual fund with 90% stock, and cash will still be instantly accessible. It's really not that different in concept than a HELOC, except your collateral is much more diversified than your house.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#98

Post by andrewmatte »

Leherenn wrote: post #95
andrewmatte wrote: post #48

I used to be a stock broker. But right now I am not your stock broker. This is not advice. Great fundamental wisdom is that you can't (consistently) time the market but you should try to Buy Low, Sell High. That said, we experience a massive COVID crash. It's a great time to buy, but we don't know how long it will last or whether it will be long recession afterwards. Index investing through ETFs is a great way to get…

What's the reason for splitting it in 10 if you know you're going to invest it this way already? I would assume to be more flexible and be able to change strategy if something goes wrong?

Dollar cost averaging means you aren't trying to time the market.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#99

Post by tjansen »

basch wrote: post #75
tjansen wrote: post #56

Right now is a very risky time to invest. It could be that it turns out to be a good time, because stocks are about 20% below the all-time high. But there could also be a second crash, when investors realize the real impact of the economic crisis caused by Covid-19. In addition to that, there's the risk of inflation caused by government bailouts. What I'm doing right now is keeping about 1/3rd in gold ETF as inflatio…

Are you familiar with https://portfoliocharts.com/portfolio/golden-butterfly/ 20% Total Stock Market 20% Small Cap Value 20% Long Term Bonds 20% Short Term Bonds 20% Gold You could replace short term bonds with Cash, TIPS, CDs, Bitcoin.

Not this portfolio, but I don't see the point of buying bonds anymore, at least when you invest a relatively small amount of money. Low interest, risk is relatively high compared to what you can earn, and no inflation protection.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#100

Post by alexmingoia »

rambojazz wrote: post #84
alexmingoia wrote: post #82

I would keep 1-2 years worth of living expenses, then take the rest and put it in an index fund, and keep putting new savings into the index fund. I would also move to a country with 1/4 the cost of living so that you're instantly 4x wealthier, and use the extra to take time off and enjoy life and build your own company.

He has 80K, not 80M.

I left San Francisco to live in a country where 80K can last 6 years without working. IMO, arbitraging cost of living is the smartest thing to do with your money if you’re an engineer and can earn USD anywhere, especially since OP is single with no kids.
Post reply on HN