Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Where to invest
Old 09-02-2005, 12:52 AM   #1
Confused about dryer sheets
 
Join Date: Sep 2005
Posts: 4
Where to invest

I have plans to sell my house soon. We will have about 800K from the sale of the house. I plan to retire in about 4 years in 2009. How should I invest the proceed of the sale so that I can retire comfortablely. I am currently living and working in Santa Clara, CA. In retirement, I think I would like to stay living in the Santa Clara area. My husband and I both have about 400K in our 401k at work. After selling our home, we will rent.
__________________

__________________
linda 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!

Re: Where to invest
Old 09-02-2005, 08:42 AM   #2
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
Re: Where to invest

what are your ages? and what are you comfortable with? I would max out the 401k before you left and if you are over age 50, you could sock away a little more with the catch-up. That is a start, I am sure others will give suggestions. This has come up recently (people getting a lump sum). You should look back at the posts the last couple of months for some more ideas.
__________________

__________________
- Hurry! to the cliffs of insanity!
maddythebeagle is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 09:00 AM   #3
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Re: Where to invest

Sit on it. No need to make any drastic moves. If you are only 4 years away you should be in conservative camp (esp with 1.2 mil) but you did not mention age.
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 09:29 AM   #4
Recycles dryer sheets
 
Join Date: Jun 2005
Posts: 261
Re: Where to invest

I agree with Wildcat. I see nothing wrong with maxing out annually in I-Bonds ($120,000/year, paper and electronic) at 4.8%, tied to the CPI-U, and virtually liquid after 1 year (except for 3 mos. of interest if redeemed in under 5 years).

I can't think of a better place to park your cash- and congrats on having the foresight to sell (your home) high, and rent. I think you will do very well if you trust your gut, distrust the markets (real estate and stock) and max out on I-Bonds.
__________________
"Against stupidity, God Himself fights in vain."
Art is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 09:43 AM   #5
Confused about dryer sheets
 
Join Date: Sep 2005
Posts: 4
Re: Where to invest

Thanks for suggestions.

I am 47 and my husband is 49. Just waiting for the kids to finish college before retiring.
__________________
linda is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 09:53 AM   #6
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Re: Where to invest

Linda -

As I said I would sit on it until you come up with a plan you are comfortable with. I know that doesn't tell you much but I would imagine you have a few reasonable choices in terms of allocation w/o running FIRE calc - 60/40, 50/50 or 40/60. It really depends on what you are comfortable with. Also you need to account for the high cost of living. Health insurance provided or are you paying? Run your numbers on FIRE calc. It is not perfect but it will give you an idea of where to go.
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 05:39 PM   #7
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,079
Re: Where to invest

We sold up 18 months ago and moved to rental. We stuck the proceeds in a single conservative Vanguard fund 65% bonds/ 35% Stocks that has been around since 1970 and has for us returned close to their historic norms of 9%. (dividends re-invested). Of course past returns don't ensure ......

We also max out on I-Bonds each year, building a ladder for retirement. Works great on-line through treasurydirect.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 05:43 PM   #8
Full time employment: Posting here.
 
Join Date: Aug 2004
Posts: 909
Send a message via ICQ to Marshac Send a message via AIM to Marshac Send a message via Yahoo to Marshac
Re: Where to invest

Quote:
Originally Posted by wildcat
As I said I would sit on it until you come up with a plan you are comfortable with.*
Agreed. Find a nice 5% CD, put it in there, and you should see a safe real rate of return of around 2% (assuming inflation #s are correct). You're close, now is not the time to play games and take risks.... especially over the next 6 months IMO
__________________
Marshac is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 08:19 PM   #9
Confused about dryer sheets
 
Join Date: Sep 2005
Posts: 4
Re: Where to invest

Thanks for all the kind suggestions.

I will definitely look into CDs and max out on the I-Bonds.

Alan, you mentioned a Vanguard Fund - I like to investigate further.
Which Vangruard fund did you put your money into and what was
your return in the past 18 months?

__________________
linda is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 08:35 PM   #10
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Re: Where to invest

Quote:
Originally Posted by linda
Alan, you mentioned a Vanguard Fund - I like to investigate further.
Which Vangruard fund did you put your money into and what was
your return in the past 18 months?
Linda, it looks like Alan was referring to Vanguard's Wellesley Income Fund. Here is a link to the Vanguard website and information on historical returns.

http://flagship2.vanguard.com/VGApp/...FundIntExt=INT

REW
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Where to invest
Old 09-02-2005, 09:15 PM   #11
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,079
Re: Where to invest

Linda,

REW is correct - I was referring to the Wellesley Income fund Admiral shares.


Alan
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Re: Where to invest
Old 09-03-2005, 06:20 PM   #12
Confused about dryer sheets
 
Join Date: Sep 2005
Posts: 4
Re: Where to invest

I have another question. If I want to invest a $100K in Vanguard Wellesley Fund, is it best to put in the entire amount of $100k at one time or should I put in 10% of the $100K per month for 10 months.

Here's the plan I am considering with the money from the sale of our house:
1. Max out I-Bond - $120K
2. Vanguard Wellesley fund - $100K
3. CD account - $680K

I have enjoyed reading all the comments on this forum. It have been very helpful
and inspiring.
__________________
linda is offline   Reply With Quote
Re: Where to invest
Old 09-03-2005, 06:29 PM   #13
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Re: Where to invest

Well I would look at from 2 perspectives.

1) Throw the money in now so you can start collecting the yield or

2) DCA into the fund so you naturally hedge any drops in NAV

It is not a real volatile fund so keep that in mind

__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Re: Where to invest
Old 09-03-2005, 09:52 PM   #14
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,079
Re: Where to invest

When I sold my house 18 months ago I faced the same question of DCA or jump in immediately. I decided that since the Wellesley fund was so stable that I would put in the full $200K immediately (I had also been in it for about a year myself). I certainly have not regreted it as my personal return from my own spreadsheet calculation and via the Vanguard website has been close to 9% over the 2.5 years that I have been in it.

__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Re: Where to invest
Old 09-03-2005, 10:07 PM   #15
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Re: Where to invest

linda,

I agree with Alan and did not dollar cost average when I rolled over my 401(k) a couple of months ago and put half of it in Wellesley. Only time will tell if that was the best way to do it, but the fund's stable track record convinced me it was OK to go that route.

REW
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
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
Really need your advice- $20K to invest, Munis, ETFs,REITS, or Index Funds Foodeefish FIRE and Money 5 01-06-2007 03:34 PM
How to invest trust funds???? RE2Boys FIRE and Money 10 11-23-2006 12:50 PM
Ready to invest - but where accountingsucks FIRE and Money 9 07-14-2006 12:05 AM
ER is 2 Years Away, Where Should I Invest $300K? Hydroman FIRE and Money 12 05-06-2006 06:10 PM
How to invest in commodities? Spanky FIRE and Money 16 03-06-2005 10:13 AM

 

 
All times are GMT -6. The time now is 06:48 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.