Where should I invest

Submitted by gchaudh2 t3_11emt1l in personalfinance

Me and my my spouse both in our 30s.

  • My income $110,000 +15% bonus.
  • Spouse’s income $145,000 + 20% bonus + $20,000 stock.

Assets/Debts

  • House - 1 in MCoL area valued at $500,000 with $300,000 mortgage left at 2.5% rate
  • Cars - 2, 1 paid for values at $35,000 on KBB. 1 with monthly payment at 1% interest. Will be paid off in 12 months and valued at $40,000 on KBB
  • 401k - $150,000 combined
  • HYSA - $40,000 combined
  • Stocks - $30,000 combined (excludes spouse’s RSU)
  • ETFs - $22,000 combined ($500 contribution each month)

We contribute 15% to 401k each with 6% company match. We dont have any active debt but do expect our first kid soon.

Expenses per month average

  • Total take home after taxes and deductions and 401k - $11,000/month
  • Mortgage - $1,800
  • Car payment - $650
  • Internet + Phone - $200
  • Car insurance - $150
  • Utilities - $10 electric, $50 gas and $40 water ~ $100 total
  • Groceries- $300
  • Eating out - $500
  • Discretionary spending - $500
  • Travel -$500
  • Other random expenses - $300
  • Total ~ $5,000

We put around $4,000 in our HYSA each month but with a decent emergency savings kitty built up, we now want to get some value from our investments moving forward and dont want to keep everything in our HYSA… unless thats the best option.

Not accounting for any future pay raises or promotions what should we do next. I also want to trim our expenses to survive on a single income if needed.

Any help is appreciated.

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Comments

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drockaflocka t1_jaezfd8 wrote

Everything looks pretty good. You have a few options that really depend on your goals/future plans.

- Increase 401k contributions. This makes the most sense if you don't plan to retire early. You can also consider backdoor roth.

- Increase brokerage contributions. This is ideal if FIRE is on the table and you want to set aside money for medium-long term bridge account. Index funds and/or bonds are both good options depending on your risk tolerance.

- Build CD ladder. This would work great for money in the 3-5 year timeline. Rates are currently great and would be locked in.

- Start a 529 or other savings vehicle/educational expense fund for kids. There are a lot of options here so do some research.

- Keep additional savings in HYSA. Rates are decent but not guaranteed. Cash position is good if you're concerned about a potential recession or want to keep options open (both for investments or fun). You could splurge on a nice vacation, a few lifestyle upgrades, look into alternative investments like REITS, rentals, etc. You've done all the correct things and deserve to enjoy the fruits of your labor!

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AllThePrettyHouses t1_jaf4plb wrote

You've done awesomely, and have a lot wrapped up in the market already. I'd diversify again, and pick up a turnkey rental, or become an lp in syndication somewhere.

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