What to do with money in moneymarket account

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Topic Author
SmokeyBonez
Posts: 8
Joined: Sun Apr 08, 2018 10:02 am

What to do with money in moneymarket account

Post by SmokeyBonez » Thu May 21, 2020 2:31 pm

Based on previous advice here, I have maxed out my 401k on both mine and my wife's account. Next question I would like to get thoughts on. I have 60 grand in money market account that I know need to do something with. Also have another 25k in another money market / cds as emergency fund. I understand it is impossible to time the market, but surely there are times where it is wise to not jump into market (or is that timing the market too :oops: ) Options:

Mortgage 240k at 4% just bought house at 295k 6 months ago. Paying this down is an option. Obviously better to get 4% return than a 1.35% in money market. However worried about having no liquidity.

start 529 plan ( wanted to superfund it but seems too risky given market even though oldest kid is 4)

Maybe do both? Or something else I am missing? Thoughts? Anything is welcome, I understand i am new and not good at this.

Thanks
Last edited by SmokeyBonez on Thu May 21, 2020 2:36 pm, edited 1 time in total.

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Cheez-It Guy
Posts: 844
Joined: Sun Mar 03, 2019 4:20 pm

Re: What to do with money in moneymarket account

Post by Cheez-It Guy » Thu May 21, 2020 2:33 pm

Where are you getting a 1.6% return in the money market?

Topic Author
SmokeyBonez
Posts: 8
Joined: Sun Apr 08, 2018 10:02 am

Re: What to do with money in moneymarket account

Post by SmokeyBonez » Thu May 21, 2020 2:35 pm

sorry, 1.35% live oak bank.

tashnewbie
Posts: 192
Joined: Thu Apr 23, 2020 12:44 pm

Re: What to do with money in moneymarket account

Post by tashnewbie » Thu May 21, 2020 2:42 pm

Welcome!

It might be helpful to follow the format detailed here to give a better picture of your overall portfolio and financial position: viewtopic.php?f=1&t=6212


Do you have Roth IRAs? Have you funded for 2019 and 2020 for you and your wife?

hudson
Posts: 2709
Joined: Fri Apr 06, 2007 9:15 am

Re: What to do with money in moneymarket account

Post by hudson » Thu May 21, 2020 5:15 pm

SmokeyBonez wrote:
Thu May 21, 2020 2:31 pm
Based on previous advice here, I have maxed out my 401k on both mine and my wife's account. Next question I would like to get thoughts on. I have 60 grand in money market account that I know need to do something with. Also have another 25k in another money market / cds as emergency fund. I understand it is impossible to time the market, but surely there are times where it is wise to not jump into market (or is that timing the market too :oops: ) Options:

Mortgage 240k at 4% just bought house at 295k 6 months ago. Paying this down is an option. Obviously better to get 4% return than a 1.35% in money market. However worried about having no liquidity.

start 529 plan ( wanted to superfund it but seems too risky given market even though oldest kid is 4)

Maybe do both? Or something else I am missing? Thoughts? Anything is welcome, I understand i am new and not good at this.

Thanks
SmokeyBonez,
Consider readings some books in the Boglehead's list in the Wiki. I like Ferri, Swedroe, and W. Bernstein.
Are your Roth's maxed out?
Have you maxed out IBONDS?

annu
Posts: 595
Joined: Mon Nov 04, 2019 7:55 pm

Re: What to do with money in moneymarket account

Post by annu » Thu May 21, 2020 11:17 pm

4% is a lot. Look into refi, we got 2.5% for 15 year, 320k.
If not possible try to payoff mortgage.
Also keep of money separate. If you are making your 401k already, beforebstarting 529, might be good idea to make a dent in the mortgagr

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btq96r
Posts: 123
Joined: Thu Dec 26, 2019 3:46 pm

Re: What to do with money in moneymarket account

Post by btq96r » Thu May 21, 2020 11:19 pm

SmokeyBonez wrote:
Thu May 21, 2020 2:31 pm
Mortgage 240k at 4% just bought house at 295k 6 months ago. Paying this down is an option. Obviously better to get 4% return than a 1.35% in money market. However worried about having no liquidity.
If your emergency fund is stout enough, you shouldn't have to worry about liquidity. To me, the point where the worry goes away is when you've got enough for emergencies. That's how it works for me anyway...mileage may vary in others.

Knocking off 25% of your mortgage is hard to argue against if you think the home you're in is where you'll be sending the kids out into the world from. Any other debts that could come first like a car loan? Maybe earmark half of it for the next car you or the wife get, and put it into a bond fund to get a better than Money Market return. That way you can pay cash for the next car if that's not your habit.
Moderation is for Canadians.

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