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Short Term Places for a Downpayment (lemm.ee)

submitted 9 months ago by [email protected] to c/[email protected]

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Hi all -

I need reassurance that having 60-80k in cash isn't wild if we plan to buy/look at buying a home in the next 2-3 years. We're in a DINK lifestyle in a LCOL area and are easily saving $2k+ towards specifically a down payment per month.

Currently: 8k is in a Vanguard account and has been invested in index funds for about 2-3 years now 10k is in treasury funds 5k is abroad in a high interest account that's locked for about another year from a grandparents inheritance 5k is in a CD making ~5% APY

I'm thinking that as we start building up more I'll be trying to keep opening 3-12 month CDs on a regular basis as long as rates stay at 5%

But I'm super risk tolerant and part of me sees all the cash laying around as a waste when I could add to the Vanguard account with more stocks. Mostly because until now I haven't had a real timeline for buying and it always seemed so far in the future that keeping it in stocks made sense.

Can someone help me think through what I'm giving up with both options? 5% isn't bad for now but I don't think rates are going to stay so high forever either.

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[–] [email protected] 4 points 9 months ago* (last edited 9 months ago)

But I'm super risk tolerant

Can you quantify? If the market tanks 30% next year and then stays flat until the end of your 2-3 year timeframe, what's the plan? Will you be OK with that plan?

If that scenario bothers you, or you think it can't happen, maybe reconsider whether you are really as risk tolerant as you think you are.