An anonymous caller’s crypto investments have recently skyrocketed to 17 percent of her investment portfolio. Given the volatility of this asset, should she rebalance it or go all in?
Allison feels antsy holding $1 million in cash with falling interest rates on the horizon. How does she optimize this money while keeping it liquid enough to buy a house on an uncertain timeline?
Jocelyn wants to buy a house in three years but she’s reluctant to keep her sizable down payment in cash. What if she splits the difference and invests half the money instead?
Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.
Enjoy!
P.S. Got a question? Leave it here.
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Anonymous asks (at 03:16 minutes): I bought two cryptocurrencies a few years ago intending to keep them at five percent of my total portfolio of equities, index funds, and bonds. Recently, the value of my crypto has skyrocketed, and it now makes up 17 percent of my portfolio.
I’m torn. Should I rebalance back to my original allocation or hold on and see where it goes?
I view cryptocurrency as a highly risky and speculative asset, but I also see its potential for wealth-building. Could you share a framework or guidance for managing this asset class especially given its volatility?
Allison asks (at 29:15 minutes): Over the last year, I sold multiple rental properties and netted $1 million. It’s now in high-yield savings accounts earning around 4 percent. But with rates likely to drop, is there a better way to deploy this money while keeping it fairly liquid?
I planned to use this cash to buy a new primary home in New England. But after a year of looking, the options have been limited, and I’m hesitant to spend that much on a house I’m not in love with. A modest two- to three-bedroom can cost $800,000 to $1 million here.
I like the idea of being mortgage-free, but high property taxes in my desired area would still leave me with a sizable monthly expense, which adds to my hesitation. For now, I’m renting a two-bedroom apartment for $3,700.
Here’s some financial background:
- I’m 48 years old.
- I have $2.5 million in investments ($2 million in a taxable account and $500,000 in retirement accounts).
- I left my high-income physician job in early 2024 due to burnout and now run a small cash-only practice that makes enough to cover my living expenses.
- I plan to retire fully in the next five years.
I want to keep this $1 million accessible in case I find the right home, but I feel it’s not optimized sitting in savings accounts. Would it be too risky to invest this money in a two- or four-fund strategy, knowing my timeline is uncertain?
Jocelyn asks (at 5400: minutes): What’s the best way to manage the money I plan to use for a house upgrade in three years?
I’ve saved $250,000 for a down payment on a new house. Our current home is worth $700,000 and locked into a low COVID-era interest rate. I’d like to keep it as a rental property, but I’m open to selling it if it makes more financial sense.
The home I’d like to buy costs $1.2 million. I prefer to put 20 percent down, but I’m flexible and could put down less if necessary. With that in mind, I’m considering the following strategy:
- Keep $100,000 in a high-yield savings account to cover the minimum down payment.
- Invest the remaining $150,000 in stocks using a barbell allocation. This would help hedge against inflation and grow the money if markets perform well.
- If the stock market is up in three years, take the money out for a 20 percent down payment.
- If the stock market is down in three years, keep the $150,000 invested and use a lower down payment
Am I overthinking this? Does this plan make sense, or should I be more conservative and keep the down payment in a high-yield savings account?
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