Sitting on 100k in money market. Plan was to use for down payment on house but interest rates aren't coming down nor are prices. Time to start DCA in VOO or lump sum it any other thoughts?
100k in cash
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Last: 2 mo ago by I bleed maroon
Interest rates will be coming down shortly.
Rolex Daytona then VOO and chill
Somebody told me on here to pull the trigger on a submariner back in 2020; I regret not doing that
True but I don't think prices will
house prices will likely go up when rates go down... people can only afford what they can afford per month, if rates go down and people pay less in interest, they will just borrow more money and drive the prices up.
Just get one of the $25,000 home buyer subsidies the Democrats are promising
hedge said:
True but I don't think prices will
Get an offer in on a house now, don't lock in your rate until after the 9/18 Fed Meeting where they're just about guaranteed to drop rates. Then, perhaps in a year or so as rates continue coming down refinance.
If we're headed into a recession, you may not see too crazy of price drops, but prices won't be increasing much either.
If you're saving it to buy a house in the next year, putting that in the market is high risk. 4-5% high yield savings account is your friend.
Put it into a bond fund with a 5-7 year duration. Pdmix or a tax free muni bond fund. Hysa yields are dropping fast.
permabull said:
house prices will likely go up when rates go down... people can only afford what they can afford per month, if rates go down and people pay less in interest, they will just borrow more money and drive the prices up.
That's been my theory as well.
If you want to buy a house buy a house. Prices might, I stress might, dip for a very short time, but they go up over time. Also, rates are high compared to the last 15 years, but they are a far cry from where they have been.
Buy it now if you find something that fits and refi if interest drops.
Buy it now if you find something that fits and refi if interest drops.
I would feel more comfortable buying a house than jumping into the stock market right now.
Where do you live? House prices in some markets aren't going to come down anytime soon.
reineraggie09 said:
If you want to buy a house buy a house. Prices might, I stress might, dip for a very short time, but they go up over time. Also, rates are high compared to the last 15 years, but they are a far cry from where they have been.
Buy it now if you find something that fits and refi if interest drops.
This.
Don't try to time the housing market and interest rates. You are either ready and can afford to buy or you aren't. If you are ready (which means you want to buy one) and can afford it, just go do it.
Combined cost will not be coming down. If you know what you want and where, buy. There is a lot more uncertainty in the market than Texas real estate. We are growing and will continue to grow; that will drive value. So if you are ready, take the plunge
Id feel more comfortable purchasing if I had 200k, 150k down and another 50k for emergencies
hedge said:
Id feel more comfortable purchasing if I had 200k, 150k down and another 50k for emergencies
In my opinion, by the time you get to $200k, you'll be saying "I'd be more comfortable if I had $300k."
Again, just my opinion, but if you are ready for home ownership, I think you'd be better off being honest about what you can afford now, and not just mortgage and insurance either. What you can afford now likely isn't the house you'd really like to have yet, and that's fine.
If home prices continue to rise (which they likely will), and you continue to save as you have been, you will get there. Faster than parking cash in a money market account too.
I don't disagree I'm always feeling I need to save more
Not sure where you live, but could you split the difference and get a duplex/quadplex and live in one unit while you rent out the others?
You're young and single - you get an investment property to live in as long as you need to, someone else pays the mortgage, then you hold on to it and buy a house when you're ready to settle down.
Good chance that whatever hypothetical house you buy now will either lock you into a certain geographic area when job hunting/won't be the house your future spouse will want to live in. Things to keep in mind.
You're young and single - you get an investment property to live in as long as you need to, someone else pays the mortgage, then you hold on to it and buy a house when you're ready to settle down.
Good chance that whatever hypothetical house you buy now will either lock you into a certain geographic area when job hunting/won't be the house your future spouse will want to live in. Things to keep in mind.
If you are able to save up another 100k ANY time in the next 5-10 years, you are more than comfortable enough to buy a house.hedge said:
Id feel more comfortable purchasing if I had 200k, 150k down and another 50k for emergencies
The amount of people who can save up 150k for a down payment and still have 50k for emergencies is probably less than 2-3% of Americans.
I'm not going to tell you to go out of your comfort zone. You do you. But it's not necessary by any means and in fact, extremely rare.
CC09LawAg said:
Not sure where you live, but could you split the difference and get a duplex/quadplex and live in one unit while you rent out the others?
You're young and single - you get an investment property to live in as long as you need to, someone else pays the mortgage, then you hold on to it and buy a house when you're ready to settle down.
Good chance that whatever hypothetical house you buy now will either lock you into a certain geographic area when job hunting/won't be the house your future spouse will want to live in. Things to keep in mind.
duplex units to rent out
how does one find this type of investment opportunity in other states?
I am looking at south eastern Pennsylvania near York/Lancaster,
Shenandoah Valley Virginia
Melbourne Florida
4-5% money market account...if you just have to buy a house.
If you are single and may move around (don't know how old you are), I don/t know why you would want a house rather than get better returns in the market over time.
That said, its hard to just invest that much of a slug of money.
Also, to those who say interest rates going down will cause prices to go up....A VERY informed poster thinks this likely isn't the case. And, two, its not like its dropping to 3% overnight. Its going to be slow(ish).
If you are single and may move around (don't know how old you are), I don/t know why you would want a house rather than get better returns in the market over time.
That said, its hard to just invest that much of a slug of money.
Also, to those who say interest rates going down will cause prices to go up....A VERY informed poster thinks this likely isn't the case. And, two, its not like its dropping to 3% overnight. Its going to be slow(ish).
With stock gains alone 100k should easily turn into 200k in 7-10 years. Factor in investing money saved by not paying property taxes, maintenance, increased utilities and insurance and you can easily get there 3-4 years sooner. I think people should buy a house because its where they want to live, not because people think its a good investment and you have to buy now or you will never ever be able to afford one.beerad12man said:If you are able to save up another 100k ANY time in the next 5-10 years, you are more than comfortable enough to buy a house.hedge said:
Id feel more comfortable purchasing if I had 200k, 150k down and another 50k for emergencies
The amount of people who can save up 150k for a down payment and still have 50k for emergencies is probably less than 2-3% of Americans.
I'm not going to tell you to go out of your comfort zone. You do you. But it's not necessary by any means and in fact, extremely rare.
See I'm not sure if I'll move to another city or not, my thought process is to let it ride in the s&p 500. Likely double in 6-7 years
permabull said:With stock gains alone 100k should easily turn into 200k in 7-10 years. Factor in investing money saved by not paying property taxes, maintenance, increased utilities and insurance and you can easily get there 3-4 years sooner. I think people should buy a house because its where they want to live, not because people think its a good investment and you have to buy now or you will never ever be able to afford one.beerad12man said:If you are able to save up another 100k ANY time in the next 5-10 years, you are more than comfortable enough to buy a house.hedge said:
Id feel more comfortable purchasing if I had 200k, 150k down and another 50k for emergencies
The amount of people who can save up 150k for a down payment and still have 50k for emergencies is probably less than 2-3% of Americans.
I'm not going to tell you to go out of your comfort zone. You do you. But it's not necessary by any means and in fact, extremely rare.
this is exactly what my buddy who made a fortune in real estate developing tells me every time we have lunch together
he says RENT and invest instead.
good to hear others say the same thing.
Huge FOMO when everyone talks about how much their homes have appreciated
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So a guy that owns a bunch of real estate suggests renting to those he meets.
That's a smart business plan, if I've ever heard one!
That's a smart business plan, if I've ever heard one!
Hedge, is $100k your entire net worth? Are you single? If yes to both, I would just keep saving/investing and start putting money in the S&P 500. I would wait to buy a house.
NW is around 220k, yes single
Because for whatever reason, people have no problem saying how much they think their house has appreciated versus saying how much your investment account has gone up.LMCane said:permabull said:With stock gains alone 100k should easily turn into 200k in 7-10 years. Factor in investing money saved by not paying property taxes, maintenance, increased utilities and insurance and you can easily get there 3-4 years sooner. I think people should buy a house because its where they want to live, not because people think its a good investment and you have to buy now or you will never ever be able to afford one.beerad12man said:If you are able to save up another 100k ANY time in the next 5-10 years, you are more than comfortable enough to buy a house.hedge said:
Id feel more comfortable purchasing if I had 200k, 150k down and another 50k for emergencies
The amount of people who can save up 150k for a down payment and still have 50k for emergencies is probably less than 2-3% of Americans.
I'm not going to tell you to go out of your comfort zone. You do you. But it's not necessary by any means and in fact, extremely rare.
Huge FOMO when everyone talks about how much their homes have appreciated
Owning a home can be a decent financial move under the right circumstances, but renting as part of an overall strategy can also be a decent to outright better financial move depending on the individual circumstances.
You don't have to keep up with the Joneses. Ultimately, they will be keeping up with you.
hedge said:
See I'm not sure if I'll move to another city or not, my thought process is to let it ride in the s&p 500. Likely double in 6-7 years
I wouldn't get a house unless you are fairly confident that you will be there at least 4-5 years. After paying leanding fees and everything else it takes to get into a home you start off upside down on getting out of the house for the first few years especially if you consider the opportunity costs.
Exactly, I see homes in my neighborhood sitting on the market for months yet some of my neighbors believe they can get the Zillow price tomorrow and not have to pay any commissions or concessions
Yup. And even Zillow prices are coming down. But yeah, residential real estate has a big time emotional component to it. A mix of ego, keeping up with the Joneses, delusion, and ignoring costs.permabull said:
Exactly, I see homes in my neighborhood sitting on the market for months yet some of my neighbors believe they can get the Zillow price tomorrow and not have to pay any commissions or concessions
As I said, even in spite of all that, it can make sense. But right now, in this market, and if you dont' NEED a home (ie family with kids, needs schools, etc), it doesn't make alot of sense to jump into that.
(of course, you will get this weird attitude from people that have bought a home that somehow you are below them...its just strange how people view homeownership).
I agree with Ramit Sethi when he says "home ownership in America is a religion". I see lots of people do anything and everything to get into a home because they have been brainwashed to think that is the ONLY way to build wealth. While for a lot of people, buying a home makes sense, but there is nothing wrong with running the numbers and making sure it makes sense for you. I have seen people buy homes over an hour away from work or get into really bad properties (i.e. manufactured homes) not because it was a good fit for them, but because they just want to check off the home ownership part of the American dream.
Agreed. I think the problem is too many people have the majority of their net worth in their home, and have very little else saved outside of their home. So they are house rich and cash poor. A house isn't going to pay your bills if you get laid off or lose your job.permabull said:
I agree with Ramit Sethi when he says "home ownership in America is a religion". I see lots of people do anything and everything to get into a home because they have been brainwashed to think that is the ONLY way to build wealth. While for a lot of people, buying a home makes sense, but there is nothing wrong with running the numbers and making sure it makes sense for you. I have seen people buy homes over an hour away from work or get into really bad properties (i.e. manufactured homes) not because it was a good fit for them, but because they just want to check off the home ownership part of the American dream.
For me, it never made sense to have a large percentage of my net worth in an illiquid asset like a house. I would rather have $500k liquid in the stock market versus a paid off home worth $500k.
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