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Ask HN: I have $450K cash, what should I do to maximize my return?

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Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#31

Post by IgorPartola »

hedora wrote: post #4

Cash out refi everything you can. At 3%, 30 year fixed, with fed target inflation rates of 2-3%, you’ll need a If you can’t get that with passive investments over the next 30 years, the banks will have bigger problems than your loan. Despite your risk aversion, consider putting some in a robo advisor (mix of bonds, index, foreign index, etc), to hedge against a spike in inflation, or a crash of just the US economy. T…

You are trying to time the market. If your goal isn’t to cash out within a year, don’t look at the prices, just buy S&P index fund like VTI and a bonds fund in some proportion. Rule of thumb is 100 - your age is the percentage that goes into stock fund, your age is percentage that goes into bonds.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#32

Post by crorella »

I am in a similar situation. I ended up investing overseas on a good real state deal with high yields. The tax side of things was simplified by the type of investment (debt investment). I think the pandemic created or accelerated a bunch of business opportunities, some of them out of the US.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#35

Post by fujiters »

https://www.bogleheads.org/wiki/Managing_a_windfall

Use this money to max out all tax advantaged accounts available to you (401k, IRA, HSA), and invest the rest in a brokerage account. When in doubt, invest the money in a target date fund at Vanguard or Fidelity that most closely matches the date you plan to start withdrawing from the account. A total world fund/ETF, like VT, is also a fine option.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#36

Post by gonehome »

This is a good resource: https://www.reddit.com/r/financialindependence/

Long term VTSAX or FZROX are probably good places to hold most of that. You could keep $30k in cash for emergency fund.

The other comments suggesting the bogleheads forums are also right. Most of the other comments are a total disaster I’d be cautious about following any of the advice here (it’s also surprising to me how bad it is).

I also personally do some individual stock picks of companies I know in the field I’m in, but that’s still quite risky and not advised unless you like this kind of thing (Amazon, Apple, PTON, Nvidia, previously tsla). I hold long term for capital gains.

Long term index funds are the best bet, even if the market goes down you can wait it out if you’re young. If the current conditions scare you, you can “dollar cost average” entry which just means buying $X amount each month/week until you’re fully invested. Long term this kind of thing doesn’t matter though.

Are you looking to use the cash soon? If so you may want to not invest it. Being forced to withdraw is where the problems come from.

Don’t listen to anyone on here about bitcoin. That’s gambling, if you want to do that know it’s gambling and expect to lose everything.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#37

Post by throwlogon »

hedora wrote: post #4

Cash out refi everything you can. At 3%, 30 year fixed, with fed target inflation rates of 2-3%, you’ll need a If you can’t get that with passive investments over the next 30 years, the banks will have bigger problems than your loan. Despite your risk aversion, consider putting some in a robo advisor (mix of bonds, index, foreign index, etc), to hedge against a spike in inflation, or a crash of just the US economy. T…

I believe the poster has $450K in cash, in addition to the real-estate holdings, and that is already more money than they know what to do with. I don't know if it makes sense to mortgage "the base" to add more cash to that pile.
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