What to do with $600k cash now?

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waiting2buylater_IHB

New member
I sold my house in 2005 and have been parking my $600k in CD's earning 5 to 5.5%. I don't expect to buy a house for another 18 to 24 months. I have been kicking myself for not putting the money in the stock market in index funds or emerging market funds in the last 2 years. I would appreciate any advices on what to do with my cash now. I subscribe to Money and Smartmoney magazines but I also want to get opinions from the many knowledgeable folks here on what you would do if it was your money. Thank you!
 
Good job on cashing out with $600k. Sit on the $ for 2 more years, I'd say 2nd half of 2009 or later, before buying.





Also, rather than buying the biggest and best house you can get, you might want to consider using the $ to purchase multiple properties -- but only if the prices fall enough to make it worthwhile.
 
If you need the money in a relatively short period of time then keep the majority of it in CDs. Unless of course you have a crystal ball and can predict what is going to happen in both the domestic and global market place in the next 1-2 years and know the funds you are interested aren't going to decline. If they do decline it would be a pity because you would either have to scale back your home purchase due to the lose or wait until the markets improve.
 
"you might want to consider using the $ to purchase multiple properties -- but only if the prices fall enough to make it worthwhile."





Yeah, if they want to be a landlord.
 
<p>Hide some of it under your mattress!!</p>

<p>Seriously, I think the mkt is about to tank, or tanking--see Friday's loss. Of course, one day's sell off does not make a crash. But I think planning on a further run up is very very dangerous.</p>

<p>Leave it where it is. Or, buy some gold coins with a few thou anyway. Just in case. . ..</p>

<p> </p>

<p> </p>
 
<p>The US dollar will keep weak for time to come, it's been like that for years, your $600K are not the same Euros 2 years ago and now, so one way to protect against this slow devaluation will be to buy a Euro fund like <a href="http://finance.yahoo.com/q?s=FXE%2C+">FXE.</a></p>
 
<p>Did you "kick" yourself for selling in 2005? Probably not.</p>

<p>I dont see anything wrong with earning 5.5%</p>

<p>Do you buy stocks now? If not, why start?</p>
 
I think if he/she/they made less than $500,000 for a couple, in profit, after subtracting whatever you can subtract, that's it. You don't have to reinvest it in another home until you feel like it. Have to pay on interest income of course. That reinvestment requirement used to be in the rules, quite a long time ago now. Once invested, you have to live there 2 of the previous 5 years before sale in order to make another half mill with no tax consequences. So the 600 grand can be hoarded as long as Waiting2 wants.
 
Correction if you can convince your spouse to sell. That is often much harder than getting the timing right no matter how nice a place you offer to rent.
 
Thanks everyone for your comments. It sounds like I need to continue the conservative route to protect my cash. I will think hard about using just some of the money to buy gold or silver. My wife and I have discussed the possibility of buying multiple homes when the time comes. We are already a landlord for an out of state home (with positive cash flow).





That brings up another question. Should we put as much money down to buy the principal residence and use credit to buy rental homes or should we spread the down payments out evenly amongst the multiple properties?
 
Go read Greenspan's book, the Age of Turbulence. He has some interesting comments about inflation in the years to come. Might affect how many properties and what types of mortgages you might want to consider in the future.
 
I just joined the Irvine forum for the first time. I have similar situation with "waiting2buylater". I sold my house 4 months ago and put around 550,000 into 1 CD at Bank Of America. The CD rate at BoA is 5.00%. I don't expect to buy house until late 2009. I would appreciate any advices on my few questions below:



1) Since FDIC insures money up to 100K per depositor per insured bank. So should I put my money into CDs in different banks? (I plan to put <100K into each CD from each account)

2) What banks provide high CD rate i.e. 5.5%?

3) CountryWide provides 5.5% for CD. Should I trust CountryWide?



Your advices are greatly appreciated.
 
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