Park 300k

[Pearl11]

I have 300k from recently selling stock for a home remodel. I will have a construction invoice every three weeks. Project will be done in six-nine months. Where would you park the 300k to have cash available within two-three days to pay GC, earn some interest? Etc. Thanks for your help in advance.

[shess]

I have 300k from recently selling stock for a home remodel. I will have a construction invoice every three weeks. Project will be done in six-nine months. Where would you park the 300k to have cash available within two-three days to pay GC, earn some interest? Etc. Thanks for your help in advance.

In the current rate environment, the max you're going to manage on that is going to be like $600.

I mean, I'd probably go for it. I use Ally for my cashflow, and it's pretty easy to shift funds from a savings account to a checking account when you know you need to write a check. I'd have no concerns about parking things there for this kind of problem. Their savings rate is .5%, but it'll probably go down some more before it goes back up. You could lock it in with a bunch of no-penalty CD's, also at .5%, just make sure you distribute into $25k or $30k positions so that you can break things piecemeal as you need it.

I probably wouldn't get too intricate with my designs, because there's only so much I'm willing to do to make an extra $100.

[Pearl11]

Thanks boss for the detailed response. So it would be foolish to place in 20-25 dividends stocks?

[hi_there]

"So it would be foolish to place in 20-25 dividends stocks?"

Wait, didn't you just get this money from selling stocks?

Is $300k a lot of money for you, or not a lot of money? If it's a lot of money for you, then put it somewhere safe, since you'd be screwed if risk assets decline. If it is not a lot of money, then keep it similar to your normal asset allocation and withdraw as needed. And then move the slider in between.

[Pearl11]

I sold lots of high risk stocks and cashed in on options. I understand what you’re saying. I don’t have much more than the 300k. So, I do need it but I also just don’t want it in my Savings Account earning barely anything.

[euphonious]

Given current interest rates, you could probably sell SPY puts at less than 1% delta and still earn 10x what you'd get at a bank for an equivalent holding period. Just choose expiration dates about a week before each payment is due to give time for ACH.

[shess]

Thanks boss for the detailed response. So it would be foolish to place in 20-25 dividends stocks?

Guess it depends on what happens if you don't have the cash to make your payments.

[Wiggums]

I sold lots of high risk stocks and cashed in on options. I understand what you’re saying. I don’t have much more than the 300k. So, I do need it but I also just don’t want it in my Savings Account earning barely anything.

I know what you are saying about the low interest rates. It sucks!
Short term money should not be in stocks. So it comes down to risk vs reward if you leave the money in the market. The risk is the potential paper loss of some of the 300k. If the market does not recover when your payment is due and you cannot obtain the payment money elsewhere, you will turned a paper loss into a hard loss. Even bonds can lose money.

i’d leave it the money in cash unless you have a backup plan.

[William Million]

Gonna be hard to beat .5% interest on safe savings account. Citi is offering an incentive to open an account that might be worth it. You'd get $1,500 for a $200,000 deposit for 60 days.

[LeslieSmiley]

park it in saving earning 0.5%

pros:

- capital preservation: zero risk of losing any of the capital

- low/no stress experience: when the home remodeling bills come, you have the fund to pay for them


cons:

- FOMO: if the market doesn't drop, you will be missing out on potential higher yield if the money is in the stock market

- potentially stressful experience: if the market drops and you don't have other fund to pay for the home remodeling bills, you would have to lose money by selling low to pay the bills


ponder the above and decide for yourself as it's highly subjective

[KneePartsPro]

Where would you park the 300k to have cash available within two-three days to pay GC...

I would park it in savings or a six month cd so I could be sure to meet my financial obligation on time.

[sd323232]

I sold lots of high risk stocks and cashed in on options. I understand what you’re saying. I don’t have much more than the 300k. So, I do need it but I also just don’t want it in my Savings Account earning barely anything.

thats the price you pay for stability. if you want money to work for your, you need to put it back into stock market. you cant have both stability and making money lol, but if you know something that does, let me know

[checkyourmath]

Puts or calls on leverage etfs seems like the most stable option here. Please keep us updated on how that goes!

[LeslieSmiley]

I sold lots of high risk stocks and cashed in on options. I understand what you’re saying. I don’t have much more than the 300k. So, I do need it but I also just don’t want it in my Savings Account earning barely anything.

thats the price you pay for stability. if you want money to work for your, you need to put it back into stock market. you cant have both stability and making money lol, but if you know something that does, let me know

count me in too, please!

[shess]

I sold lots of high risk stocks and cashed in on options. I understand what you’re saying. I don’t have much more than the 300k. So, I do need it but I also just don’t want it in my Savings Account earning barely anything.

A year from now, are you going to be worrying about whether your newly remodelled bathroom (or whatever) is earning as much as you could have earned in the market? If you could magically have the entire construction finished tomorrow, would you prefer that, or would you prefer to wait six to nine months so you could continue to play the market? If either of those is "Yes", you maybe shouldn't be doing to construction project in the first place, because you need to get that money back into the market STAT.

[arcticpineapplecorp.]

I sold lots of high risk stocks and cashed in on options. I understand what you’re saying. I don’t have much more than the 300k. So, I do need it but I also just don’t want it in my Savings Account earning barely anything.

so you want to keep money safe but also make money?

this is a common question on bogleheads.

people somehow want to defy the laws of economics.

safety = no growth
growth = you must take risk

if the two were not true then why would anyone take risk if they could make money without taking risk?

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