Reply to What to do with an extra $750K?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]"This is the the worst advice ever. The OP is coming into a windfall, and you guys are giving her advice that keeps her in debt or worse, puts her in MORE debt"

I'm the pp who wrote this and would like to add - instead of these options, 
1) pay off your student loans, all of them
2) pay off your mortgage

You are now debt free in DC with a comfortable HH income.  Congratulations!  Now, take the money you were putting towards your student loans and mortgage and start aggressively saving for your addition, your new car, and your children's tuition.  [/quote]

And hope and pray that all that money you just plowed into loans and now is illiquid doesn't suddenly become horribly necessary to you in that time you are building reserves back up.

[/quote]
That's quite a bit of anxiety, IMO. Why would OP suddenly need hundreds of thousands, if the family is financially stable, insured etc? I've seen people's money turn to dust overnight, literally. So having tangible assets seems like a much more prudent way to preserve wealth at this time. It is astonishing how much trust you have in banks and markets... I'm all for playing with money some, but not all of it, with kids and all...[/quote]

* House burns down, is destroyed in Superstorm Sandy 2.0, or some other act of God
* One spouse becomes horribly ill and incapacitated, requiring massive amounts of care not covered by health insurance (and perhaps requiring the other spouse to stop working)
* Both spouses lose their jobs

In at least two of those, good luck tapping a home equity line or increasing it. Yes, you won't lose your house if it's paid off, but where will the money come from to fund your life while you're trying to reestablish? Not out of your equity. If you have hundreds of thousands in liquid assets, and not necessarily invested in stocks, it could be in CDs for heaven's sake, you can still pay your mortgage and all of your expenses for many months while getting righted.

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