MichealKnight
Full time employment: Posting here.
- Joined
- May 2, 2019
- Messages
- 520
I had asked this a few years ago here and really appreciated the discussion.
Bottom line: I want to have $200k in the hopper, ready to go for college money in 4 years. Not saying $200k will cover it all- but that's what I want to know is ready. Won't need it all on day one - for argument sake let's say I need $50k a year.
Would like to..... preserve the capital hopefully close to inflation - hoping that is 3.5%.
Of course, beating 3.5% would be lovely as the excess money -frankly would go towards living expenses. My competing thoughts:
1.)You GOT the $200k. Just make 4.25-4.4 on a combo of CD and Treasuries. Big deal - avoid 3% PA tax on the Treasuries. At the end of the 4 year rainbow, I KNOW I have my $200k - and hopefully 4.4 was enough to stay a smidge ahead of inflation.
2.)I dont know the bottom. But stocks are certainly lower than a few years ago.
2a.)Bonds (they say...you know, them) that bond prices go *up* when interest rates go down. So if I feel that rates won't go up after Q2 this year.....and I feel some sort of a recession or sadly geopolitical event will prompt lower rates between now and 4 years - perhaps high quality bonds give interest and some cap gains too.
Enter something like VWINX... the board here knows better than I do but I feel correct in saying that their holdings are decent quality, venerable things - not SPACS, not Wood stocks, not Cramer's latest rant, etc. Perhaps....VWINX does better than the 4.4% CD?
Then I look at 529 funds (I have none). Heck - the "target commencement" funds for this year were DOWN 8%. Last year not great either. If that happened to me in 4 years, WITHOUT the benefit of a decade long bull market that I mopped up - my goodness I've gone backwards at the last minute..... should a 9-11, a Covid, a Bear Stearns moment or whatever happen.
I'm right now thinking.....
$125k in CDs and Treasuries.
$50k in VWINX
$25k. in PFF
Start drawing from this in 4 years. If there is a nasty market event - perhaps the VWINX and PFF money will have 2 extra years to recover - while I draw on the CD/Treasury money.
I'd love to make more money. BUT imagine "Honey DD , I don't have enough because I tried to get more and it didn't work". Ugh the thought of that hurts the gut.
Appreciate any opinions.....thank you for reading.
Bottom line: I want to have $200k in the hopper, ready to go for college money in 4 years. Not saying $200k will cover it all- but that's what I want to know is ready. Won't need it all on day one - for argument sake let's say I need $50k a year.
Would like to..... preserve the capital hopefully close to inflation - hoping that is 3.5%.
Of course, beating 3.5% would be lovely as the excess money -frankly would go towards living expenses. My competing thoughts:
1.)You GOT the $200k. Just make 4.25-4.4 on a combo of CD and Treasuries. Big deal - avoid 3% PA tax on the Treasuries. At the end of the 4 year rainbow, I KNOW I have my $200k - and hopefully 4.4 was enough to stay a smidge ahead of inflation.
2.)I dont know the bottom. But stocks are certainly lower than a few years ago.
2a.)Bonds (they say...you know, them) that bond prices go *up* when interest rates go down. So if I feel that rates won't go up after Q2 this year.....and I feel some sort of a recession or sadly geopolitical event will prompt lower rates between now and 4 years - perhaps high quality bonds give interest and some cap gains too.
Enter something like VWINX... the board here knows better than I do but I feel correct in saying that their holdings are decent quality, venerable things - not SPACS, not Wood stocks, not Cramer's latest rant, etc. Perhaps....VWINX does better than the 4.4% CD?
Then I look at 529 funds (I have none). Heck - the "target commencement" funds for this year were DOWN 8%. Last year not great either. If that happened to me in 4 years, WITHOUT the benefit of a decade long bull market that I mopped up - my goodness I've gone backwards at the last minute..... should a 9-11, a Covid, a Bear Stearns moment or whatever happen.
I'm right now thinking.....
$125k in CDs and Treasuries.
$50k in VWINX
$25k. in PFF
Start drawing from this in 4 years. If there is a nasty market event - perhaps the VWINX and PFF money will have 2 extra years to recover - while I draw on the CD/Treasury money.
I'd love to make more money. BUT imagine "Honey DD , I don't have enough because I tried to get more and it didn't work". Ugh the thought of that hurts the gut.
Appreciate any opinions.....thank you for reading.