Given recent events, it seems that managing (or, really, reducing) our income over the next several years has become increasingly important.
Let’s say that you have the following assets:
$3.5M in index stock funds (all in a taxable account);
$1M in bond funds (all in retirement accounts);
$1.4M in cash (all in a taxable account); and
House worth around $500k (no mortgage).
If you believe that you need to lose $525,000 from your cash holdings (mostly to reduce your overall income), where would you put that cash?
If you use it to buy more stocks, you might end up with around $8,000 in income, which may not be ideal and might require you to further reduce your cash amount, which could be troublesome. Plus, stock prices are (to me) a bit uncomfortably high.
Or you could sell your current house, net around $450k from it, and take that amount and the $525k and get a house valued around $1M, but then you have to support a (much higher) property tax payment on that purchase on an ongoing basis, which could put a strain on your desired withdrawal rate.
Or, I suppose, you could put the $525,000 in a zero-interest checking account, but then you lose out to inflation and such.
Or I guess you could spend $525,000 on a bunch of stuff or experiences you don’t really want or need, but then you are stuck with such stuff and probably have nowhere to store it, and just spending to spend will likely fill you with regret.
So what would you do to lose some money? (Charity is an option, but not a practical one at the moment).
Thank you.
Let’s say that you have the following assets:
$3.5M in index stock funds (all in a taxable account);
$1M in bond funds (all in retirement accounts);
$1.4M in cash (all in a taxable account); and
House worth around $500k (no mortgage).
If you believe that you need to lose $525,000 from your cash holdings (mostly to reduce your overall income), where would you put that cash?
If you use it to buy more stocks, you might end up with around $8,000 in income, which may not be ideal and might require you to further reduce your cash amount, which could be troublesome. Plus, stock prices are (to me) a bit uncomfortably high.
Or you could sell your current house, net around $450k from it, and take that amount and the $525k and get a house valued around $1M, but then you have to support a (much higher) property tax payment on that purchase on an ongoing basis, which could put a strain on your desired withdrawal rate.
Or, I suppose, you could put the $525,000 in a zero-interest checking account, but then you lose out to inflation and such.
Or I guess you could spend $525,000 on a bunch of stuff or experiences you don’t really want or need, but then you are stuck with such stuff and probably have nowhere to store it, and just spending to spend will likely fill you with regret.
So what would you do to lose some money? (Charity is an option, but not a practical one at the moment).
Thank you.
Statistics: Posted by Random Poster — Fri Nov 15, 2024 5:35 pm — Replies 51 — Views 2946