My wife and I are going to be selling our home and will be getting about $50k back in equity. Is there something, anything I can do with that $50k to turn it in to more cash in the long run, other than just sticking it into a savings account? I'm 30, she's 28. We have two girls (4 yrs, and 2 mo.) old.

We only have about 10k in debt (between our truck and car), no credit card debt or any other forms of debt to speak of. We're moving from Dallas to Houston because I received a better job opportunity. I'll be making around $100k-130k a year, she's a stay at home mom.

Any suggestions?

20% down on your new home. Pay off debts.

Use your new salary to max retirement, start efts for 529 accounts and save $25K in savings. Once you've done that, start Roth Ira. Some people say to put college savings last, but with that income, that's too selfish for me.

TommyGun said:

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Are you going to buy another house?

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Not immediately. Going to rent for a year before we commit fully to buying another house.

Ragoo said:

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i know what i would do, but not knowing your entire financial position or goals it is hard to give a recommendation.

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Financial position is good. 3 months emergency savings right now ($10k total). Goal is to obtain as much wealth as possible, of course.

Ragoo said:

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gigemtrev said:

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TommyGun said:

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Are you going to buy another house?

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Not immediately. Going to rent for a year before we commit fully to buying another house.

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then put the cash in a high yield savings account. If a house is in your future do not risk the loss in principle.

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Is there a specific high yield savings account that you suggest?

gigemtrev said:

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Ragoo said:

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gigemtrev said:

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TommyGun said:

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Are you going to buy another house?

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Not immediately. Going to rent for a year before we commit fully to buying another house.

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then put the cash in a high yield savings account. If a house is in your future do not risk the loss in principle.

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Is there a specific high yield savings account that you suggest?

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Seems like a no brainer to keep the cash liquid for when you buy a home in a year. Ally, Goldman, Capital One all have good ones around 1.8%

gigemtrev said:

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Ragoo said:

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i know what i would do, but not knowing your entire financial position or goals it is hard to give a recommendation.

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Financial position is good. 3 months emergency savings right now ($10k total). Goal is to obtain as much wealth as possible, of course.

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$10K emergency fund for a family of four with 2 little kids and only one income doesn't seem very high....

From what I know i would increase your EF, pay off the debt, max ROTH IRAs for this year & next if you haven't already, and then keep the rest in a online savings account earning somewhere in the 1.5+% range for future use... Whether that be a home or a future investment opportunity that makes sense.

Wife is an Aggie said:

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gigemtrev said:

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Ragoo said:

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i know what i would do, but not knowing your entire financial position or goals it is hard to give a recommendation.

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Financial position is good. 3 months emergency savings right now ($10k total). Goal is to obtain as much wealth as possible, of course.

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$10K emergency fund for a family of four with 2 little kids and only one income doesn't seem very high....

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This. I'd double your EF at least, then put the rest in a safe spot for your next down payment. There's math you could do that i am not going to do to decide if it is worth paying off the cars.

Money going to the next house and eliminating pmi or getting an nicer house is a better use of funds than gambling on the current market.

50K sounds nice, but between that, your ef, and still needing a house in the future, you aren't probably in a spot to buy an investment property and the market is too variable right now imo to put it there.

johnson2012 said:

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10 responses and no "two chicks at the same time"? TA has matured..

In my limited experience I'd echo the high yield savings if you're going to use it in the next year. There's a thread on this board on page one or two that has a bunch of saving account recs. I think its title "Onlive savings acct" or something like that. Most are over 2% these days.

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I mean this is really what i wanted to post...



but some boards are more serious than others

I'd at the very least check your bank statements for the last 4-6 months to make sure that emergency fund is solid. It's easy to think "we could get by on X" but things add up and not all of it is as easy to give up as you'd think.

If you're going to be buying another house, I'd just save it somewhere until then - PMI isn't fun, even if low-interest rates are.

Look at VMMXX (or similar) for short term cash

If you know you won't need for 1 yr, roll it into a couple cds for a little more return

He doesn't n Ed to increase the EF. 10k in float is plenty as a renter, Especially if he keeps the $50k liquid for a future home purchase.

Once he buys that new home I'd increase the EF a bit but no more than 20k.

wessimo said:

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johnson2012 said:

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10 responses and no "two chicks at the same time"? TA has matured..

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He said $50k, not $1million.

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You can get two chicks at the same time at any price point. The quality just goes up as the dollar amount increases.

Ally and a bunch of other ones are now at 2.0%

Go with whoever gives you the biggest bonus to bring over funds. Ally was offering 1% bonus last month but I'm guessing other similar offers can be found elsewhere.

gigemtrev, could I ask what you do for a living.. nice job on the high income

Open State Farm Checking and get Relationship Rate on Consumer Money Market of 2.08%

Most on here have said pay off your debt.

I strongly disagree assuming the interest rates on the two cars are relatively low, which is likely.

You car far out pace the car loan interest rates by investing in a vanguard index fund that mirrors the s&p500.

If you invest the $50k at age 28 and don't contribute another penny until retirement at age 67 your $50k will turn into $654,000, assuming a conservative 7% annual return in the market.

Keep paying your car payments for the next couple of years, invest the $50k and then PM me in 40 years so you can take me to dinner.

If it was me -

- Pay off the 10k debt.
- Put the 40k in a savings account (highly diversified mutual fund would be the most risk I would assume... but easy 2% savings account probably would be the way to go)
- Save whatever those monthly car payments were (plus any extra) over the next year to add to that $40k for your next house down payment.

Also depends on where you're looking to live, because if you're looking at a $300k house or higher, I would probably be maximizing my cash for the down payment.... making sure to hit 20%.