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Where to park $300k for a year or so


Onboard 2.0

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The recent sale of our house is gonna net us a little more than $350k. After paying some debts we'll have about $300k to park while I design a new home, and wait for the worst of the covid construction cost spike to subside in the next year or so. There'll probably be some other contributions ($10-$25k) from my father estates to park as well as the funds are released.  Can't be something that locks the funds in with withdrawal penalties as we'll need them once we begin construction.

Where could one put those kinds of funds that would be relatively safe, and accessible without penalties in a year that could see some potential return on the investment.  No penny stocks of course...

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Most safe - Yotta savings account. I’m storing my cash here now after trying it out. It’s getting better yield than a high yield online savings account. 
 

less safe - bond funds. There’s A whole world of them out there. 
 

VTEB doesn’t seem like a terrible choice especially given its tax exempt.

you can pretty go all the way out the yield ladder to HYG or JNK if you like. If you wanted to get fancy and get a little more juice  you could park a little in each tranche of risk. There’s some PIMCO CEFs Ive been eyeing for a while too but I never pulled the trigger on em yet. 
 

I’m in the process of selling a house too and about to have the same issue here in a month or so. 
 

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13 minutes ago, DonkeyCigars said:

If you’re looking for zero risk, we’re seeing about 1.4% annually with this savings account. I wouldn’t put more than 250k in a single account given fdic limits.  Anyway you won’t get wealthy with 1.4% but you can’t beat the return with zero time commitment.

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11 minutes ago, Johnny Chimpo said:

Most safe - Yotta savings account. I’m storing my cash here now after trying it out. It’s getting better yield than a high yield online savings account. 
 

less safe - bond funds. There’s A whole world of them out there. 
 

VTEB doesn’t seem like a terrible choice especially given its tax exempt.

you can pretty go all the way out the yield ladder to HYG or JNK if you like. If you wanted to get fancy and get a little more juice  you could park a little in each tranche of risk. There’s some PIMCO CEFs Ive been eyeing for a while too but I never pulled the trigger on em yet. 
 

I’m in the process of selling a house too and about to have the same issue here in a month or so. 
 

Much o-bliged. Yeah, can't risk losing the nut we've been growing for years now, so playing it safe with most of it is the game plan.  $250K in a safe vehicle, and maybe put the remaining $50K in a couple other slightly higher risk places.

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IMPO some combination of:

 

1.) Ally(or other FDIC insured high yield savings):  No loss of capital.  0.5% interest.

2.) S&P 500 ETF.  Vanguard(or total market)  Market risk, low fees, +/- 2% dividends at gap gains rates

3.) ishares MUB.  Tax free municipal bonds ETF.  Trades in a fairly tight range.  2% dividends tax free.

 

 

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51 minutes ago, dingleberryswitzer said:

I wouldn't hold your breath on that one.  

Yeah it's gotta come back some. 2% interest rates are fueling the construction industry right now so that offsets some of the stupid triple price inflation.  At some point those high costs will cause problems (pin meet balloon).

Edited by Onboard 2.0
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Use it as collateral to sell weekly 2-Sigma SPY puts.  easy.

 

 

 

just to expand:  Against a collateral of $50,000, sell 10 contracts of Friday expiry SPY 347 puts.  You net $420 .  If SPY closes above 347, all that money is yours.  Do this 52 weeks = 7.5% annualized return. 

If SPY closes below 347, congrats, you just owned the US stock market at a discount.

If SPY closes at 1$, you will have lost the entire 300k ... except we're in a nuclear apocalypse and money is meaningless.

Edited by 52-80
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On the one hand, I have most of my net worth in the markets and I am going to ride that rollercoaster.

If I liquidated my house with the intent to build a new one in the next 3 years, I would park it in a money market and lose the potential for growth. I'm not a financial wizard but I wouldn't bet my house that we're not sitting on a bubble. And if I stuck it in the most boring of index funds and lost $100k hoping to earn 50 I would never stop punching myself in the dick.

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10 minutes ago, Celery Man said:

On the one hand, I have most of my net worth in the markets and I am going to ride that rollercoaster.

If I liquidated my house with the intent to build a new one in the next 3 years, I would park it in a money market and lose the potential for growth. I'm not a financial wizard but I wouldn't bet my house that we're not sitting on a bubble. And if I stuck it in the most boring of index funds and lost $100k hoping to earn 50 I would never stop punching myself in the dick.

Yeah, We're not gonna roll those dice.  It would be a colossal fuck up if we lost that money.  I am willing to risk some in something with a fairly safe if a bit extended risk factor, but not much.

I'm not going into the last chapters of my life in debt.  We want to be able to travel, have fun, spend discretionary money without worrying about covering a mortgage payment.

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16 minutes ago, Onboard 2.0 said:

Yeah, We're not gonna roll those dice.  It would be a colossal fuck up if we lost that money.  I am willing to risk some in something with a fairly safe if a bit extended risk factor, but not much.

I'm not going into the last chapters of my life in debt.  We want to be able to travel, have fun, spend discretionary money without worrying about covering a mortgage payment.

Yeah I wouldn't put it in any ETF since there's no guarantee you'd be up YTD. 

Like others have said, I'd just shop savings accounts. 

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1 minute ago, Brisketexan said:

From what I hear, I wouldn't count on construction costs going down in a year.  Lumber is at record prices, and projections show that there's no reason to expect them to come down meaningfully anytime soon.

Maybe he should just buy $300k worth of lumber.

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5 minutes ago, Brisketexan said:

From what I hear, I wouldn't count on construction costs going down in a year.  Lumber is at record prices, and projections show that there's no reason to expect them to come down meaningfully anytime soon.

This is correct.  Construction costs will be higher next year if anything.

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6 minutes ago, Brisketexan said:

From what I hear, I wouldn't count on construction costs going down in a year.  Lumber is at record prices, and projections show that there's no reason to expect them to come down meaningfully anytime soon.

With the upward pressure on construction, coupled with historic low rates probably not.  If Covid issues are mitigated with a vaccine, then they should ease some as closed factories, mills, etc. are able to open back up.

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5 minutes ago, ztejas said:

Username fits, too. On board(s?).

Me and a couple buds talked a about that concept a few years back.  We were toying with a design build co. and having a warehouse with price stable lumber could have been a nice pump primer.  Sitting around a campfire sipping bourbon for hours on end does that kind of shit to you.

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1 minute ago, Onboard 2.0 said:

Me and a couple buds talked a about that concept a few years back.  We were toying with a design build co. and having a warehouse with price stable lumber could have been a nice pump primer.  Sitting around a campfire sipping bourbon for hours on end does that kind of shit to you.

Yeah I think warehousing costs for the scale you'd operate at would fuck any profits you might see in the ass. 

Which is why I was 100% kidding.

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43 minutes ago, Onboard 2.0 said:

Bud had a pretty large tractor shed (5K sq. ft.) on his property.

Could you fit $300k worth in a space like that?

Would it need to be climate controlled?

How are you transporting it?

Where are you buying from and who are you selling to?

Most importantly: what would your wife think about this?

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Seriously, I’m in the same boat.  Sold house and about to remodel my new one.  Dumped 200k into Yotta accounts (one for me, one for the wife).  You can only deposit $10k/day, $40k/month so it took just over 2 months to get it in there and will take about that long to get it out.  I invested some in my brokerage but my Yotta has been giving me about 1% returns (though Jan, my worst month so far, was just .6%) so that good enough for money I literally can’t lose.

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46 minutes ago, ztejas said:

Could you fit $300k worth in a space like that?

Would it need to be climate controlled?

How are you transporting it?

Where are you buying from and who are you selling to?

Most importantly: what would your wife think about this?

In my defense we did drink uh-lot of bourbon.

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5 hours ago, DonkeyCigars said:
5 hours ago, Nice Guy Eddie said:

If you’re looking for zero risk, we’re seeing about 1.4% annually with this savings account. I wouldn’t put more than 250k in a single account given fdic limits.  Anyway you won’t get wealthy with 1.4% but you can’t beat the return with zero time commitment.

 

Come join the fun. $40k is the current limit however. 

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5 hours ago, Onboard 2.0 said:

Much o-bliged. Yeah, can't risk losing the nut we've been growing for years now, so playing it safe with most of it is the game plan.  $250K in a safe vehicle, and maybe put the remaining $50K in a couple other slightly higher risk places.

Put the 50K and buy 1.5 Bitcoin. Sell later this year. Thank me then. 

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1 hour ago, CHIEF said:

Might want to look into the silver market:

https://capital.com/will-silver-prices-go-up-in-2021

CHIEF

I'm sitting on bags of sliver dollars from the late 1880's on, and lots of silver quarters, somewhere around $2k original purchase price back when my dad bought I believe  I have no idea at all what to do with that. The old dollar coins are gorgeous to look at though.

Edited by Onboard 2.0
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