120k in cash

[Anonymous]

Where in God's name do you live that $120K isn't enough for a down payment for a family of 4?

[Anonymous]

Anonymous wrote:Where in God's name do you live that $120K isn't enough for a down payment for a family of 4?

That's a 20% down payment on a $600k house at best. So someplace like inside the beltway with good schools.

When you grow up poor you can be irrationally conservative, and fear taking on debt , even mortgage because of the trials you saw it could cause your family of origin.

[Anonymous]

Anonymous wrote:You have 120k

Take 3-6 months of expense and (that's your emergency fund) and then add the money you need in less than 5 years

Put that in a municipal bond fund

If there is anything that is leftover put around 1k a month into a broad based fund

Something like this

https://investor.vanguard.com/mutual-funds/lifestrategy/#/

The reason you only put 1k a month is dollar cost averaging (look that up :-p). You don.'t want to invest all your money when the market is really high and then have it tank on you

Good Luck

This would be a great idea if she didn't want to use most of it for a down payment in 2 years. It's short term money. Shouldn't be invested.

[Anonymous]

Anonymous wrote:Need advice on investing. DH and I come from dirt poor families and have managed to save 120k over the course of our 20s and early 30s. It is sitting in the bank currently and we would like to invest it in something that yields more than the pittance banks are currently paying. At the same time, we hope to buy a house in the next two years. (We live in a ridiculously expensive area, so we still don't have enough for a downpayment on anything that can fit our family of 4).

We know little about savings and investments. We know enough not to put this in the stock market because this is all we have in the world, apart from retirement savings. I was thinking that a mutual fund makes sense, but are some riskier or better than others? I have heard of Vanguard, but there are multiple Vanguard funds. Are there low risk options other than mutual funds that still generate a decent return? Or should we keep it in cash.

TIA.

You've done a great job saving this money and having retirement savings. You should learn about savings and investments, that's just as important as actually doing the savings. Not just for this but also for your retirement funds. Here's a good place to get started:

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

As for this money, if you want to use in a few years, don't put it into anything risky like stocks. An online savings account or a CD would be best.

[Anonymous]

We are so similar to you, OP. Big savers, low spenders, but know next to nothing about investing and finance. We followed some online advice (check out mrmoneymustache.com) and some friends' advice. We split our 100K savings, put half in Vanguard's VTSAX (easy to do, all online, extremely low fees.) For the other half we went with Schwab, talked to a financial adivsor, and opened a managed brokerage account. We add to each account similarly, but the Vanguard is a much simpler process and easier to manage at tax time (one statement vs. multiple from Schwab, arriving well into March) and after about 5 years, has earned more than the Schwab.