Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Bonds (ETF), CDs or VG MM for house sale proceeds - 3-5 year horizon
Old 06-18-2019, 12:47 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,556
Bonds (ETF), CDs or VG MM for house sale proceeds - 3-5 year horizon

I am in the process of selling my house and since it is paid for, expect a 6 figure amount once the transaction is finished. I will not need those funds for 3-5 years when I return to the USA and will most probably buy another house with the cash from the sales proceeds and investment income. So, the goal for the funds is capital preservation with some return.

I have set up a VG MM account to receive the funds but am undecided on if/where to place the funds afterward. The last time I did this, I got a three year CD. I have researched the Bonds versus CDs and it seems to depend on one's risk tolerance. I've also thought about just letting it sit in the VG MM.

So, since this group is fairly diverse and yet financially savvy, I thought I'd ask: what do you see as pros and cons of the three options and what would you do?
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
deserat is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-18-2019, 12:57 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 10,308
The only three options I personally would consider is buying a diversified portfolio of individual investment-grade corporate bonds, buying treasury notes or buying TIPS. I would probably end up going with the TIPS. None of these is difficult. Certainly Vanguard has a bond desk that can do the deed for you with one phone call. They can also discuss risk questions you may have about corporate bonds.

With bond funds you pay unnecessary fees and if interest rates rise your holdings may lose value.
OldShooter is offline   Reply With Quote
Old 06-18-2019, 03:54 PM   #3
Full time employment: Posting here.
 
Join Date: Apr 2011
Location: Castro Valley
Posts: 788
I would probably put it into a 3 year CD. It will be there waiting for you when you get back.
jkern is offline   Reply With Quote
Old 06-18-2019, 03:56 PM   #4
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
Quote:
Originally Posted by jkern View Post
I would probably put it into a 3 year CD. It will be there waiting for you when you get back.
+1

Your time horizon is too short to do much of anything else.
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 06-18-2019, 09:30 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
But VMMXX is currently yielding 2.40% and 3 year brokered CDs are yielding 2.25%... so I would go with VMMXX for better return and better liquidity... and then see if there are any CD specials in your area.

In my area in Florida a local CU was running a CD special of 3.25% for a 24-month jumbo CD... hard to beat that.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 06-19-2019, 04:05 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,184
I'm seeing 2.70% for a 3 year CD at Capital One right now. Did not look around to see if that's best, and it's up to the OP to decide if the flexibility of VMMXX is better than locking into a CD, but it is a higher rate.
RunningBum is offline   Reply With Quote
Old 06-19-2019, 04:43 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
Fair point... I was looking at brokered CDs... bank CDs are higher but I'm not sure it is worth tying up money for 3 years for 0.3% in case a good house buying opportunity comes along sooner than the maturity of the CD.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 06-19-2019, 05:43 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,871
Nothing that can lose value (ie bonds). CD is probably better than MM.
mrfeh is offline   Reply With Quote
Old 06-19-2019, 01:04 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,556
Thanks all for the replies - house hasn't sold yet, so can still ruminate and investigate.

"In my area in Florida a local CU was running a CD special of 3.25% for a 24-month jumbo CD... hard to beat that."

Where was that? My home of record will be FL when I go to Germany....
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
deserat is offline   Reply With Quote
Old 06-19-2019, 02:03 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,944
CD Rates are plateauing and starting to come down. MM deals still are around, but I'm guessing that we've just about seen the peak on these too (and they will start to trail down).

Interior FCU has a 3.14% APY on a Jumbo (min $100K) 24-month CD. That might be an option and they have easy membership requirements: https://www.depositaccounts.com/bank...-union/offers/

I've been opening a series of 24-month Flex rate (3.25%) CD's and then locking the rate. These were especially good in that they allowed an extra (up to the original amount) deposit. Unfortunately this deal was closed out a week ago.
copyright1997reloaded is offline   Reply With Quote
Old 06-19-2019, 02:27 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
Quote:
Originally Posted by deserat View Post
Thanks all for the replies - house hasn't sold yet, so can still ruminate and investigate.

"In my area in Florida a local CU was running a CD special of 3.25% for a 24-month jumbo CD... hard to beat that."

Where was that? My home of record will be FL when I go to Germany....
Suncoast Credit Union (West coast...Tampa area)
https://www.suncoastcreditunion.com/...l/bank/savings
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 06-19-2019, 02:45 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 9,940
Yes federal reserve signaling a drop in interest rates.
ivinsfan is offline   Reply With Quote
Old 06-23-2019, 03:24 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,556
Quote:
Originally Posted by pb4uski View Post
Suncoast Credit Union (West coast...Tampa area)
https://www.suncoastcreditunion.com/...l/bank/savings
Excellent! My business is registered in FL, so I am eligible to join....thanks for this tip. Excellent rate 3.25% for $100K+.....
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
deserat is offline   Reply With Quote
Old 06-23-2019, 03:33 PM   #14
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,155
Quote:
Originally Posted by pb4uski View Post
But VMMXX is currently yielding 2.40%.
Currently 2.36 and dropping steadily.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 06-23-2019, 03:41 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
Quote:
Originally Posted by braumeister View Post
Currently 2.36 and dropping steadily.
2.36% is SEC 7 day yield.. compound yield is 2.39% is more relevant IMO... but you're right the yield has been creeping downward.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 06-23-2019, 08:24 PM   #16
Confused about dryer sheets
 
Join Date: Jun 2019
Location: Richmond
Posts: 1
Purepoint Financial has a 13-month no penalty CD with a 2.5% APY.
FinallyWest is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
investing proceeds from house sale joel2125 FIRE and Money 17 08-03-2018 01:10 PM
investing proceeds from house sale joel2125 FIRE and Money 3 07-31-2018 04:01 PM
Best way to divert home sale proceeds to my young kids... NJ_Native FIRE and Money 32 06-16-2017 02:45 PM
AA/investment options for home sale net proceeds and not buying for 4-5 years? prototype FIRE and Money 10 04-02-2014 11:35 AM
What to do with house sale proceeds photoguy FIRE and Money 14 02-22-2014 07:40 AM

» Quick Links

 
All times are GMT -6. The time now is 10:49 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.