What to do with extra cash?

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fittan
Posts: 278
Joined: Wed Mar 30, 2016 1:58 pm

What to do with extra cash?

Post by fittan »

Dear bogleheads,
I have saved up some cash about $100K that I don't need anytime soon. I have maxed out 401k, roth and even iBonds. Emergency fund is all set and I have no debts except for mortgage which is manageable. Can you advise what else I can do with extra cash? I am 40 years old, married. Thank you.

Fittan
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Bogle_Feet
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Joined: Tue Jan 14, 2014 6:56 pm

Re: What to do with extra cash?

Post by Bogle_Feet »

80% in SPY , 20% in BND. Rebalance as need to maintain your bond/stock allocation ratio.
CoAndy
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Joined: Thu Jun 06, 2013 4:45 pm

Re: What to do with extra cash?

Post by CoAndy »

At what rate is your mortgage?
Topic Author
fittan
Posts: 278
Joined: Wed Mar 30, 2016 1:58 pm

Re: What to do with extra cash?

Post by fittan »

CoAndy wrote:At what rate is your mortgage?
I refinanced in 2012 to 15 year. 2.875%
Topic Author
fittan
Posts: 278
Joined: Wed Mar 30, 2016 1:58 pm

Re: What to do with extra cash?

Post by fittan »

Bogle_Feet wrote:80% in SPY , 20% in BND. Rebalance as need to maintain your bond/stock allocation ratio.
Hi, so you suggesting to DCA using 80/20 split? Should I use mutual funds or ETF (I have never invested with ETF). Heard a lot of good things about ETF though.
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whaleknives
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Re: What to do with extra cash?

Post by whaleknives »

Since you've filled your tax-advantaged space, it looks like your new investments will be in a taxable account. You should review the Wiki's Tax efficiency of various asset classes, and use something like total stock index funds in taxable. Treating all your accounts as one portfolio, you can put more bonds and less stocks in your tax-advantaged accounts.

International funds are popular in taxable for the foreign tax credit: ". . . international funds have a small tax advantage over US funds, because they are eligible for the foreign tax credit."

If your tax-bracket is high enough, you might use municipal bonds in a taxable account.
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."
t3chiman
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Joined: Wed Mar 18, 2015 12:34 pm

Re: What to do with extra cash?

Post by t3chiman »

fittan wrote:... advise what else I can do with extra cash?...
Buenos Aires is nice this time of year. Rent an apartment for a month in an upscale neighborhood; drink fine wines; enjoy the culture; travel around: glaciers, waterfalls. Probably run you $20k for two. A lot of money, but an unforgettable experience. [full disclosure: I recently returned from such a trip.]

The purpose of money is to enjoy it.

As for investing for pure monetary gain, I see the dramatic progress being made in treating previously hopeless cancers. Companies like Exelixis, Calithera, Kite Pharma are prime examples. You could look at the IBB index for lots more. Vanguard's health care funds are one way to work the technology trend.[More disclosure: it's what I have in my IRA.]

Congrats on your good fortune.
Hope this helps.
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BL
Posts: 9565
Joined: Sun Mar 01, 2009 2:28 pm

Re: What to do with extra cash?

Post by BL »

What is your AA? You could buy total US or international stock funds in taxable (maybe some muni bonds) and move some stocks to bonds in tax-advantaged accounts.

Search the Wiki for 3-fund portfolio. You don't need to get into sectors if you do total stock index funds instead. Read a Boglehead book on investing.
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ruralavalon
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Location: Illinois

Re: What to do with extra cash?

Post by ruralavalon »

fittan wrote:Dear bogleheads,
I have saved up some cash about $100K that I don't need anytime soon. I have maxed out 401k, roth and even iBonds. Emergency fund is all set and I have no debts except for mortgage which is manageable. Can you advise what else I can do with extra cash? I am 40 years old, married. Thank you.

Fittan
I agree with t3chiman's suggestion to spend some of that on an nice vacation or something else that you will enjoy :D .
fittan wrote:
CoAndy wrote:At what rate is your mortgage?
I refinanced in 2012 to 15 year. 2.875%
What is your marginal tax bracket, both federal and state?

Is your tax filing status married filing jointly?

Do you both have Roth IRAs, and are you both making maximum IRA contributions?

What funds are you using in your 401k and IRAs? Please give fund names, tickers and expense ratios.

What is your desired asset allocation?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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