I have approximately $30K saved for buying a house and plan to save at least another $20-30K/year for the next few years (I will continue to max out both 401K and Roth IRA). My intent is to keep this money in relatively safe investments and perhaps earn a little. If I have two goals, they are to (1) protect against inflation and (2) hedge against housing cost increases, but I understand that I likely can’t meet those goals perfectly given my desire for low risk.
Until recently it was all in a so called “high interest” (not right now) savings account, but I bought the maximum $10,000 of Series I Bonds and intend to do so each year. I understand the 1-year no selling rule and will not buy any after one year before I am ready to buy a house. I also understand losing three months of interest if sold before five years and consider that penalty insignificant.
Learning about I-bonds got me thinking, should I invest part of this money in some sort of real estate investment— maybe a REIT fund?
My questions are, concisely:
1. Is there another investment that I could buy, other than the maximum amount of I-Bonds, that offers similar inflation protection and low risk?
2. Should I invest part of this money in some sort of real estate investment? Which one?
3. Among one, two, and “high interest” savings, what should my allocations be? What should my house savings portfolio look like?
Thanks, as always.
