Single Investor In California Hoarding $170K Cash Feels Overwhelmed – 'Should I Go All-In On Stocks Or Keep Saving For A House?'

Benzinga
Yesterday

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

For many, deciding to purchase a house or invest in the stock market is a pivotal crossroads, and hoarding cash in a high-yield savings account can feel safe, especially when aiming to own a house one day.

But as savings grow, so does the pressure to make that money work harder, so stocks often become an attractive alternative to having the money buried in a property.

Yet, the fear of market volatility and uncertainty of when and in what to invest often leaves individuals feeling overwhelmed, especially if they are risk-averse or struggle with balancing long-term goals like retirement with short-term ones like buying a house.

Don't Miss:

  • Many don’t know there are tax benefits when buying a unit as an investment — Here’s how to invest in real estate by mirroring BlackRock's big move
  • CEO of Integris gathered a team of senior investment managers who have $34.22 billion in combined owned and managed assets in the West Coast — here’s how to invest in their private credit fund that targets 12% annual interest rate.

One Reddit user, a 39-year-old single California resident earning $100,000 per year found himself at this very crossroads. With $170,000 in cash–earning 4% to 5% in a high-yield savings account–and $94,000 in various Vanguard and Fidelity accounts, the poster is torn between continuing to diligently save for a house or invest his money into the stock market to accelerate his retirement income target.

“To be honest, I am completely overwhelmed with information. I've narrowed down that Bogle is the method I like the most. I am risk-averse and like a set-it-and-forget-it style. What the heck do I invest in? Is there any way I can invest but also possibly withdraw some if the chance to buy a home comes up? (Without penalty.) Does earning my money in California hurt me in any way when it comes to withdrawing for retirement? Or does it only matter where you live when you withdraw?” he wrote.

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.

The Reddit r/Bogleheads community offered a mix of practical advice and reassurance, addressing the poster’s concerns and providing actionable steps. Let’s dissect the users’ suggestions below.

All-In in Stocks or Save for a House? The Reddit Community Offers Advice

Target-Date Funds and ETFs for Long-Term Investing

Several Redditors suggested the investor look into target-date funds and specific ETFs as an ideal option for his concerns.

“Purpose drives investments; if you want to set and forget for 10+ years; start by buying the S&P 500 ([Vanguard S&P 500 ETF (NYSE: VOO)] or [SPDR Portfolio S&P 500 ETF (NYSE: SPLG)] or [iShares Core S&P 500 ETF (NYSE: IVV)]) every week with your cash reserves. This would not be recommended for a goal of buying a house in 3 years,” a comment reads.

This Redditor replied to a comment written by the poster in which he asks whether the Vanguard Target Retirement 2050 Fund (NASDAQ:VFIFX) is a good target date fund to use.

“Looks good. I googled it and it’s a 2050 target date with a .08 expense ratio, which is great. The only note is it’s currently 90-10 stocks to bonds which is good/reasonable but you have to be able to handle market volatility at that level of stock allocation. You should be able to with 25 years to retirement (for reference I am 100 stocks with about 25-30 years to retirement),” the commenter advised.

See Also: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

For a broader diversification, this Reddit user suggested the poster goes with Vanguard Total World Stock ETF (NYSE:VT).

“Target funds are great, and so is VT, my preferred ETF; I dabble in others though,” he said.

Push Back on Buying a House

A couple of commenters also touched on the poster’s concern regarding buying a property, suggesting that he waits and invests the sum into stocks or ETFs.

“I do have to push back that you can’t get a house even in California with a $150,000 down payment. You can’t buy in Los Angeles or San Francisco etc., but you can buy somewhere. You don’t want to resign yourself to renting for the rest of your life and you have a great start with that down payment,” one commenter said.

Arrived Achieved A Total Return of 34.7% On Their Biggest Sale Yet — Diversify Your Monthly Income Stream With Fractional Real Estate

Arrived allows individuals to invest in shares of rental properties for as little as $100, providing the potential for monthly rental income and long-term appreciation without the hassles of being a landlord. With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. 

In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales.

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.

This article Single Investor In California Hoarding $170K Cash Feels Overwhelmed – 'Should I Go All-In On Stocks Or Keep Saving For A House?' originally appeared on Benzinga.com

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10