Going to offer you an alternative to the possibilities listed here, which in my mind dogmatically ignores the considerable opportunity costs of such a significant sum.

I would have at minimum 1k, ideally 1 month expenses wholly liquid.

Pay off this months bills with last month’s income.

Get that done first, and maintain it.

Then open a Roth account and use that as your rainy day fund. I like the Wellington/Wellingsy (sp?) from Vanguard.

You get tax free growth, while you can withdraw contributions (and ONLY contributions) at any time with no taxes and penalties. If allowed to “season” for just a few years, it will have grown in excess of value of even a major recession. And the difference compounds each year it is allowed to.

The key is you need to keep some constant free cash flow, and seem some liquid, and don’t raid the account for every last thing.

And DCA it in, and build with time.

This post was edited on 2/15/18 at 4:06 pm

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Posted by S1C EM

Athens, GA

Member since Nov 2007

11585 posts

Posted on 2/15/18 at 3:39 pm to Volvagia

quote:
Then open a Roth account and use that as your rainy day fund. I like the Wellington/Wellingsy (sp?) from Vanguard.

Interested to know more about this. Both of the names you mention are products with Vanguard, so not sure which one you're recommending. At any rate, I am about to have $40,000 that I need to put somewhere. About $17,000 of that will be needed by tax season next year. Probably less, but to be safe, I'm saying $17k. The remaining $23,000 can sit for another couple of years, at minimum. Likely a bit longer.

What's the best play in this scenario? Am I better off getting assistance from a financial advisor? I have little investment experience myself, so want to be sure it's directed properly.

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