What to do with $100k in excess cash?

14,708 Views | 79 Replies | Last: 10 mo ago by Jeeper79
aggieiniowa
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1:06p, 2/18/25
AG
What are you and your spouse comfortable with at the end of the day? For me and my wife when we hit a similar milestone, my wife slept better knowing a financial advisor was making recommendations so they have some of our money. I still have a brokerage account and buy and sell, but we have a nest egg with a plan we both made together for the future.

The idea of dollar cost averaging over the next 6 months a year still gives you the chance to make money in the market and in a HYSA. This is currently what I am doing and it works for me. We have a mortgage that could be paid off, with a slightly lower interest rate and I am just putting a little more than our monthly payment to principle over any mortgage payment.

For me it was always easier to move smaller amounts of money, but I know plenty of people who put the whole $100k in VOO or a combination and sleep fine. Good luck
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NoahAg
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1:27p, 2/18/25
I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities. How has no one suggested this?
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Ogre09
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1:44p, 2/18/25
AG
I would rather have that $100k in retirement savings than emergency savings. Do you have 401ks and/or IRAs? Are y'all maxing those?
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ReloadAg
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In reply to Ogre09 • 7:01p, 2/18/25
AG
Yes
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ReloadAg
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7:01p, 2/18/25
AG
Made it this far into the thread and no one said "hookers and blow"? Impressive.
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techno-ag
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7:25p, 2/18/25
AG
Lots of tax bennies with rental property. Everything is deductible and it's considered a depreciating asset even if you sell it later for more than you bought it.
The left cannot kill the Spirit of Charlie Kirk.
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halfastros81
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In reply to Ragoo • 8:26p, 2/18/25
AG
Good advice imo. Turn it into $500k + between now and retirement.
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Midnight Yale
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In reply to 10andBOUNCE • 10:13a, 2/19/25
AG
10andBOUNCE said:
@NFLPlayerProps said:
A 3.2% mortgage is an asset right now, not a liability. I wouldn't pay one cent of that early.
I don't necessarily disagree with the sentiment, but those calling a low interest mortgage an asset would be wrong.
Inflation is back up to 3% as of the estimates from yesterday. We are not far from that mortgage having a negative real interest rate.
Find me on Twitter: @MrMidnightYale
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10andBOUNCE
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In reply to Midnight Yale • 10:20a, 2/19/25
AG
It is still something you owe, which by definition is a liability.
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carl spacklers hat
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In reply to ReloadAg • 1:37p, 2/19/25
Personally, I'd put half into retirement account and the other half into your kids' college fund. $91k with two kids in late elementary (guessing 3rd and 5th) looks light, IMO. You have, by my guesswork, between 7 and 9 years before that fund starts taking draw downs. Not to shock you but the cost of college is or can be a huge challenge. If I was advising you, I'd set a target of $150k/kid per 4 year college, so around $300,000 by 2031/32.

Good luck with whatever you decide to do. You're in a great position financially.
People think I'm an idiot or something, because all I do is cut lawns for a living.
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Ogre09
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3:03p, 2/19/25
AG
If you're already maxing 2 401ks and 2 IRAs, put it in S&P500 index fund.
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WestHoustonAg79
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7:52p, 2/19/25
If you have any connections in real estate id invest in a Multifamily private equity fund. Common or pref equity in ground up deals in Texas and Sunbelt.

Supply drop off and macroeconomics about to kick off a new development cycle which will be hotter or cooler depending on market.

Investing in funds spreads it across different markets and sponsors. Less risky than other investments if pref.l equity.

Wouldn't mind if it was an acquisition fund but main thing is trust the firm and sponsors they work with.

I also like sidecar deals but only bc I'm in the business and do single deal investments if it makes sense to me based on my experience and passes the sniff test of my close friends who might have a separate niche of my expertise. (Asset class/use, engineering, subscription docs being market, etc).

Went long on a land deal that was smoking hot and last closing set for November. 2.86x multiple over 36 months! Already have invested capital back and then some.
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Fireman
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4:55p, 2/20/25
AG
You need some exposure to crypto currencies. Learn about hardware wallets and buy bitcoin with it, or you can buy MSTR stock, which is essentially a bitcoin proxy. Congrats on being so healthy financially with your young family. Gig 'em!
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MemphisAg1
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In reply to 10andBOUNCE • 11:49p, 2/20/25
AG
10andBOUNCE said:
@NFLPlayerProps said:
A 3.2% mortgage is an asset right now, not a liability. I wouldn't pay one cent of that early.
I don't necessarily disagree with the sentiment, but those calling a low interest mortgage an asset would be wrong.
Lol, I'm borrowing somebody else's money at 2.5% and even with very conservative options earning 4% to 5% on other money. Yeah, I'd call that an asset.

Not in strict accounting nomenclature of course, but in terms of something that contributes toward your wealth? Absolutely.
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ag0207
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8:30a, 2/21/25
AG
Pay yourself first then worry about the kids.

You have a good start in their 529's but at your income level I would really work on building up your retirement.

-Make sure you have an adequate emergency fund
-payoff any high interest debt (if you have any, not the mortgage)
-Max out your 401k and get that company match money
-Back door Roth
-Max out an HSA if you have access to it
-left over cash I would either put into a brokerage account/index funds +/- real estate
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Dave Robicheaux
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6:56a, 2/22/25
AG
50kon your debt and save 50k hard cash. Rinse and repeat
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Quinn
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5:56p, 2/24/25
AG
If you have $91k combined for a 12 and 9 yr old, I would put some more money into the college fund. I doubt that's funded to the level to pay for 100% of school, assuming that's what you want to do. Though if you are making $300k, you should be able to make pretty good sized contributions every year.
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ReloadAg
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In reply to Dave Robicheaux • 6:30p, 2/24/25
AG
I think this is the route we're going to take. Going to go hard at paying off the house. I know with a good mortgage rate it doesn't make the most sense from a pure math standpoint but I love the security of it. We almost put the money down on a rental home but at these rates, it wouldn't have cash flowed for quite a while the thought of having 2 mortgages makes me want to puke.
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I Am A Critic
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9:01p, 2/24/25
Given your incomes and current balances, your retirement may be way underfunded to replace your income. I'd start with how much income you expect to require in retirement and work from there.
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Mas89
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9:48p, 2/24/25
AG
Gold and or silver one ounce American Eagle coins. It looks like you have plenty invested in equities already. You can get about 33 gold eagles today for 100k and have an alternative investment in metals.

I'll duck from the rocks now after stating both gold and silver are up close to 50 percent since Feb 24,2024.
Imo equities have hit the ceiling for the time being. Inflation and interest rates will continue to increase and so will gold and silver.
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62strat
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In reply to ReloadAg • 11:22a, 2/25/25
AG
ReloadAg said:
Yes. Is that $450k in retirement behind where I should be?
we are 44/45, and until a year or two ago, were half your HH income or less, and we have double what you do in retirement.

That stat caught my eye first.. how do you have $300k income, but only $450k retirement in mid 40s?
Fidelity's guideline: Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.

So you should have over 3x, or ~$1m.

Instead of $250k sitting in cash for who knows how long, that money should have been DCAd and you'd probably have way more in retirement. We have like $20k in cash.

You can always sell funds in your brokerage if you absolutely need cash. The market has been way too good in the last 15 years to keep that much cash around.

In my opinion.
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Ghost of Bisbee
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11:51p, 2/26/25
AG
Hey OP, whatever happened with the feud you had at Leslie's Pool Supplies?
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ReloadAg
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In reply to Ghost of Bisbee • 9:43a, 2/27/25
AG
Nothing. Never went back to that location.
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Ghost of Bisbee
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In reply to ReloadAg • 7:12a, 2/28/25
AG
That dude at the counter was such a jagoff
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SF2004
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In reply to 62strat • 11:53a, 2/28/25
AG
62strat said:
ReloadAg said:
Yes. Is that $450k in retirement behind where I should be?
we are 44/45, and until a year or two ago, were half your HH income or less, and we have double what you do in retirement.

That stat caught my eye first.. how do you have $300k income, but only $450k retirement in mid 40s?
Fidelity's guideline: Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.

So you should have over 3x, or ~$1m.

Instead of $250k sitting in cash for who knows how long, that money should have been DCAd and you'd probably have way more in retirement. We have like $20k in cash.

You can always sell funds in your brokerage if you absolutely need cash. The market has been way too good in the last 15 years to keep that much cash around.

In my opinion.
These threads are always generic, fear mongering, and just plain stupid.

3x salary by 40? Which salary? Starting salary? Average Salary? Todays Salary (which would be impossible).

Op, you are fine. The only thing is do not keep $100K sitting around.

Buy SPY or put more into college savings.

It is that simple.

Unless you want to go through life calculating the future value of 1-ply vs 2-ply TP then just put ~15% away from retirement and you will be a multi-millionaire at your income level.
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@NFLPlayerProps
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1:50p, 2/28/25
Absolutely not impossible to have 3x $300k saved by 40 with that kind of income.
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EliteZags
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In reply to SF2004 • 2:49p, 2/28/25
AG
SF2004 said:



3x salary by 40? Which salary? Starting salary? Average Salary? Todays Salary (which would be impossible).

how so, have close to 10x before 40
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SECond2noneAgs
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3:44p, 2/28/25
AG
You could always quit your high-paying job and start a minimum wage job tomorrow and immediately have retirement savings over 20X your annual salary. Retirement saved.
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62strat
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In reply to SECond2noneAgs • 4:09p, 2/28/25
AG
SECond2noneAgs said:
You could always quit your high-paying job and start a minimum wage job tomorrow and immediately have retirement savings over 20X your annual salary. Retirement saved.
You say this sarcastically... this is actually very feasible.

You just have to have a lifestyle (while working, and subsequently in retirement) supported by the min wage job..
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SF2004
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In reply to @NFLPlayerProps • 4:24p, 2/28/25
AG
@NFLPlayerProps said:
Absolutely not impossible to have 3x $300k saved by 40 with that kind of income.
I would assume he hasn't had that kind of income since entering the workforce.

Outside of TexAgs B&I instant millionaires at 22, most people have to work up to that over the course of 20 years.

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SF2004
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In reply to EliteZags • 4:27p, 2/28/25
AG
EliteZags said:
SF2004 said:



3x salary by 40? Which salary? Starting salary? Average Salary? Todays Salary (which would be impossible).

how so, have close to 10x before 40
You must be making close to the same as you did when you entered the workforce than.

In the real world you build up to your salary at 40, so saving at a clip of 12-15% into pretax account would be tough to hit 3x.
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EliteZags
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In reply to SF2004 • 5:47p, 2/28/25
AG
4x but started relatively low

I'd guess most on here have been investing >20/30% for a while, those that didn't throw away money into bonds/international/target date funds got serous compounded gains past decade and a half
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@NFLPlayerProps
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In reply to SF2004 • 9:28p, 2/28/25
SF2004 said:
@NFLPlayerProps said:
Absolutely not impossible to have 3x $300k saved by 40 with that kind of income.
I would assume he hasn't had that kind of income since entering the workforce.

Outside of TexAgs B&I instant millionaires at 22, most people have to work up to that over the course of 20 years.


Yeah I'm not saying he'd need to make $300k every single year of his career to save 3x that. I understand that incomes increase as your career progresses. What I'm saying is that if you've worked your way up to $300k by the time you're 40 it is definitely possible to have socked away 3x that amount.

I believe this is what the poster who first brought it up was referring to (from Fidelity):

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AgsMyDude
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In reply to EliteZags • 9:36p, 2/28/25
AG
EliteZags said:
SF2004 said:



3x salary by 40? Which salary? Starting salary? Average Salary? Todays Salary (which would be impossible).

how so, have close to 10x before 40


That's it? I had that by 30
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SF2004
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In reply to EliteZags • 11:29p, 2/28/25
AG
EliteZags said:
4x but started relatively low

I'd guess most on here have been investing >20/30% for a while, those that didn't throw away money into bonds/international/target date funds got serous compounded gains past decade and a half
20-30%... yeah maybe if mommy and daddy paid for A&M.

Or is it going to be you paid for a $100,000 education (if you are 40 that is what it cost) while working at dairy queen part time, making a 4.0, and being a hit with the ladies all at the same time in college.

Or is it you got a $100k a year offer in 2006 when you graduated and had nil negative effects of the '08 crisis.

It is simple math and real life. Saying you should have 3x your current salary at 40 is not realistic for most people. It is just fear mongering and pushed by the financial firms to get more money locked up in their 401k accounts so they can charge fees.

Saving 20-30% of your income at 23 is very difficult in most major cities.
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