Where to invest funds from home sale?

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save4kollege
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Joined: Sun Mar 15, 2015 4:48 pm

Where to invest funds from home sale?

Post by save4kollege » Mon Feb 12, 2018 9:36 pm

I'm in the process of selling my 86 year old mother's home. Closing is scheduled for early March 2018 and we will see a check for around $170K. She lives in a senior community and currently has enough funds in her savings, annuities and Social Security to last at least 12 months.

What ideas does the BH community have for a good place to park these funds, and when the time comes to easily access for her living expenses?

Thanks.

Starchild
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Joined: Fri Feb 09, 2018 9:01 am

Re: Where to invest funds from home sale?

Post by Starchild » Mon Feb 12, 2018 9:49 pm

I’m in a similar boat and was gonna ask a similar question to the board.Sold moms house who passed, and will eventually use the money to purchase a new house, maybe in a year. I’d like to recoup some of the closing costs in the meantime. My plan is to just leaving it in a capital one money market at 1.4%. My other thought is to dump at least some of it in a Pimco income fund that yields over 5% a month (over 8% ytd). I guess in your situation, it depends how long you want to keep it for.

chevca
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Re: Where to invest funds from home sale?

Post by chevca » Mon Feb 12, 2018 9:58 pm

How much does she need for yearly living expenses? A CD ladder setting aside the yearly amount at least for each step would be a good way to go.

MotoTrojan
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Re: Where to invest funds from home sale?

Post by MotoTrojan » Mon Feb 12, 2018 10:00 pm

Starchild wrote:
Mon Feb 12, 2018 9:49 pm
I’m in a similar boat and was gonna ask a similar question to the board.Sold moms house who passed, and will eventually use the money to purchase a new house, maybe in a year. I’d like to recoup some of the closing costs in the meantime. My plan is to just leaving it in a capital one money market at 1.4%. My other thought is to dump at least some of it in a Pimco income fund that yields over 5% a month (over 8% ytd). I guess in your situation, it depends how long you want to keep it for.
There is no such thing as a fund that will yield 5%/month for any significant time-span. If so, I'd be a billionaire.

123
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Re: Where to invest funds from home sale?

Post by 123 » Mon Feb 12, 2018 10:02 pm

At her age I would just use CD's. It doesn't seem appropriate to take any risk. Why bear any risk of loss?

Edited to add:
Some of the internet bank insured money market savings accounts pay 1.4% or more so you can put some there if you want to see what happens with interest rates.
Last edited by 123 on Mon Feb 12, 2018 10:07 pm, edited 1 time in total.
The closest helping hand is at the end of your own arm.

Starchild
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Re: Where to invest funds from home sale?

Post by Starchild » Mon Feb 12, 2018 10:05 pm

MotoTrojan wrote:
Mon Feb 12, 2018 10:00 pm
Starchild wrote:
Mon Feb 12, 2018 9:49 pm
I’m in a similar boat and was gonna ask a similar question to the board.Sold moms house who passed, and will eventually use the money to purchase a new house, maybe in a year. I’d like to recoup some of the closing costs in the meantime. My plan is to just leaving it in a capital one money market at 1.4%. My other thought is to dump at least some of it in a Pimco income fund that yields over 5% a month (over 8% ytd). I guess in your situation, it depends how long you want to keep it for.
There is no such thing as a fund that will yield 5%/month for any significant time-span. If so, I'd be a billionaire.
That’s what I’m getting now. Look up yields of PONDX over the past decade

MotoTrojan
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Re: Where to invest funds from home sale?

Post by MotoTrojan » Mon Feb 12, 2018 10:10 pm

Starchild wrote:
Mon Feb 12, 2018 10:05 pm
MotoTrojan wrote:
Mon Feb 12, 2018 10:00 pm
Starchild wrote:
Mon Feb 12, 2018 9:49 pm
I’m in a similar boat and was gonna ask a similar question to the board.Sold moms house who passed, and will eventually use the money to purchase a new house, maybe in a year. I’d like to recoup some of the closing costs in the meantime. My plan is to just leaving it in a capital one money market at 1.4%. My other thought is to dump at least some of it in a Pimco income fund that yields over 5% a month (over 8% ytd). I guess in your situation, it depends how long you want to keep it for.
There is no such thing as a fund that will yield 5%/month for any significant time-span. If so, I'd be a billionaire.
That’s what I’m getting now. Look up yields of PONDX over the past decade
Looks like an annual 5% yield trailing twelve months. Also I see 8% return for 2017, big difference from 2018's -0.3% YTD. Looks like 6% 5-year return and 8.8% ten-year. Impressive, but I presume risky.

Not to mention the 3.75% front-load, and 0.85% ER (which isn't crazy for a bond-fund).

chevca
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Re: Where to invest funds from home sale?

Post by chevca » Mon Feb 12, 2018 10:27 pm

Not to mention, Starchild sort of hijacked the thread, as the OP's parent still living and needing the money to live off of isn't quite similar to funds from a deceased parent's home sale to be used for their own home purchase...

Starchild
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Re: Where to invest funds from home sale?

Post by Starchild » Mon Feb 12, 2018 10:37 pm

MotoTrojan wrote:
Mon Feb 12, 2018 10:10 pm
Starchild wrote:
Mon Feb 12, 2018 10:05 pm
MotoTrojan wrote:
Mon Feb 12, 2018 10:00 pm
Starchild wrote:
Mon Feb 12, 2018 9:49 pm
I’m in a similar boat and was gonna ask a similar question to the board.Sold moms house who passed, and will eventually use the money to purchase a new house, maybe in a year. I’d like to recoup some of the closing costs in the meantime. My plan is to just leaving it in a capital one money market at 1.4%. My other thought is to dump at least some of it in a Pimco income fund that yields over 5% a month (over 8% ytd). I guess in your situation, it depends how long you want to keep it for.
There is no such thing as a fund that will yield 5%/month for any significant time-span. If so, I'd be a billionaire.
That’s what I’m getting now. Look up yields of PONDX over the past decade
Looks like an annual 5% yield trailing twelve months. Also I see 8% return for 2017, big difference from 2018's -0.3% YTD. Looks like 6% 5-year return and 8.8% ten-year. Impressive, but I presume risky.

Not to mention the 3.75% front-load, and 0.85% ER (which isn't crazy for a bond-fund).
Yeah, this year everything just got hit with correction/interest rates, so price is down, but still getting the dividends each month. It's a pretty large and diversified portfolio, which should hopefully keep risk in check, not to mention the fund is absolutely humongous. But yeah, we'll see what happens in the future. I'm typically nervous about anything lol. What impresses me though, is around the financial crash: everyone loses their shirt, while they only lose around 5%. They bounce back by picking at the mortgage scrap heap and get 20% yields. Makes me think they're well managed and know what they're doing.

Starchild
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Re: Where to invest funds from home sale?

Post by Starchild » Mon Feb 12, 2018 10:39 pm

chevca wrote:
Mon Feb 12, 2018 10:27 pm
Not to mention, Starchild sort of hijacked the thread, as the OP's parent still living and needing the money to live off of isn't quite similar to funds from a deceased parent's home sale to be used for their own home purchase...
Sorry abut that :oops:

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Watty
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Re: Where to invest funds from home sale?

Post by Watty » Tue Feb 13, 2018 8:14 am

chevca wrote:
Mon Feb 12, 2018 9:58 pm
How much does she need for yearly living expenses? A CD ladder setting aside the yearly amount at least for each step would be a good way to go.
Be sure to look at the terms of the CD's since some will allow you to access the money early with only a small penalty.

I would not buy them any more than five years out since rising rates and inflation could be a problem.

"Senior community" could mean a lot of things but if she needs minimal assistance and has decent health prospects then a retirement income fund would help her keep up with inflation and maybe earn a bit.

https://personal.vanguard.com/us/funds/ ... irect=true

If the numbers work she might;
1) Beef up her emergency fund if she needs to.
2) Put what she will need in five years into a CD ladder
3) If there is any more then put the rest into the Retirement Income fund.

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Ged
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Re: Where to invest funds from home sale?

Post by Ged » Tue Feb 13, 2018 8:21 am

Starchild wrote:
Mon Feb 12, 2018 10:37 pm

Yeah, this year everything just got hit with correction/interest rates, so price is down, but still getting the dividends each month. It's a pretty large and diversified portfolio, which should hopefully keep risk in check, not to mention the fund is absolutely humongous. But yeah, we'll see what happens in the future. I'm typically nervous about anything lol. What impresses me though, is around the financial crash: everyone loses their shirt, while they only lose around 5%. They bounce back by picking at the mortgage scrap heap and get 20% yields. Makes me think they're well managed and know what they're doing.
PONDX lost a lot more than 5% in the financial crash. It went from 10.2 to 8.3.

mega317
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Re: Where to invest funds from home sale?

Post by mega317 » Tue Feb 13, 2018 9:33 am

Well social security won't go away in 12 months. Are you saying her savings will run out and she'll need to make up the difference? How much is that? What is a reason life expectancy?

save4kollege
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Re: Where to invest funds from home sale?

Post by save4kollege » Tue Feb 13, 2018 1:02 pm

Thanks for feedback everyone. I should have realized in needed more info such as her current sources of funds and when they expire. Looks like I've got a little more homework to do before I can narrow down an option to stash a large portion of this cash...

Dandy
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Re: Where to invest funds from home sale?

Post by Dandy » Tue Feb 13, 2018 4:04 pm

I would put it into an online Bank/CU such as Ally Bank. Split between Savings and several shorter term CDs. Tie that bank to whatever she/you currently use to pay her bills. No need to take much risk also easy for her to understand. If you are up for rate shopping check depositaccounts.com.

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tennisplyr
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Re: Where to invest funds from home sale?

Post by tennisplyr » Tue Feb 13, 2018 7:06 pm

I put proceeds from my home sale in an Ally savings account currently paying 1.45%.
Those who move forward with a happy spirit will find that things always work out.

Starchild
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Re: Where to invest funds from home sale?

Post by Starchild » Wed Feb 14, 2018 6:23 am

Ged wrote:
Tue Feb 13, 2018 8:21 am
Starchild wrote:
Mon Feb 12, 2018 10:37 pm

Yeah, this year everything just got hit with correction/interest rates, so price is down, but still getting the dividends each month. It's a pretty large and diversified portfolio, which should hopefully keep risk in check, not to mention the fund is absolutely humongous. But yeah, we'll see what happens in the future. I'm typically nervous about anything lol. What impresses me though, is around the financial crash: everyone loses their shirt, while they only lose around 5%. They bounce back by picking at the mortgage scrap heap and get 20% yields. Makes me think they're well managed and know what they're doing.
PONDX lost a lot more than 5% in the financial crash. It went from 10.2 to 8.3.
Their site lists -5.77 calendar year return % for 2008, followed by 18.81% in 2009. Certainly better than stocks that year. I wasn't investing with them at the time, so I'm assuming they're factoring in price drop with their dividends for their figures. Getting back to the OP, that's where I'm dumping some of the home sale cash. Here's their site: https://www.pimco.com/en-us/investments ... ome-fund/d

SGM
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Re: Where to invest funds from home sale?

Post by SGM » Wed Feb 14, 2018 5:13 pm

I sold the house of a 92 year old who needed to withdraw $24k beyond pension and SS each year to meet assisted living care expenses. The assisted living institution could also do hospice care. One year of additional expenses was put in CDs and money market account and checking account. Two years expenses were put in bond funds. The balance was put in the Total Stock Market and Total International funds. Periodically I moved money from the stock funds to rebuild the money market or checking account.

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