Personal Investment Chatter

I have over $200K in personal savings in Barclays savings earning a yearly 2.5%. I do not have an immediate need for cash for the next 2-years. Outside of Roth, where do you suggest I invest the $?

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Real estate and/or stocks & bonds. Do something with it, since it’s still losing real value against inflation

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If you are planning to continue working/saving, then you should just invest it in equity mutual funds and continue to dollar cost average in more over time. You are already behind, but now is a good time to start

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Alright. Yeah for 401k I’m doing equity funds. But needed guidelines for surplus lying in savings account. Thanks will check above options

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Are you able to do Mega Backdoor Roth with your 401k? It’s basically continuing to contribute in an after-tax 401k (up to $56k max for the year including employer match amounts) and converting it to Roth - hence the Backdoor reference. This way your contributions are taxed now but then all principal & growth is tax free upon withdrawal since it converts to Roth tax status.

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Is it possible? Can someone confirm?

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If your time horizon is less than 5 years would suggest short term bond funds. I have a similar amount (200k savings - not part of retirement) that I am actively saving more into with the plans of buying a business or franchise. Short term taxable bond funds (investment grade not HY) are currently yielding 3.5 - 4% and are not anywhere near as volatile as stock funds. Also, I have a municipal bond ladder that is yielding around 2% (about 3% tax equivalent) - held to maturity. I have several short term investment grade muni bond funds that have 2.25% or better yield (3.3% tax equiv). saying you can do all this to get stable value and be in a liquid position if your time horizon is short. best of luck on your search for yield- it is out there, be aware of the downsides of each asset class and plan accordingly.

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Do you have other forms of investments other than this cash? I would look at tax advantages bonds and otherwise speaking with a financial advisor.

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Will you need it in two years? The recommendations above (real estate, VTSAX) are premised on a longer time period.

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