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The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > We just sold our house. What the hell do I do with the profits?
 
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SiGmA_X
May 3, 2004
SiGmA_X

ozymandius1024 posted:

We closed on our house a couple of weeks ago, and I've been debating what to do with the proceeds from the sale.

Here is the important info:

My wife has $38,000~ in student debt (5.7% interest)
We don't have a car payment, and won't in the future (my job takes care of that)
We have no credit card debt
I myself have no student loan debt
We made $55,000~ from the house (after costs)
We just signed a 12 month lease for an apartment so we didn't have to rush into buying a new house and could take our time (and could save a bit of money, even though renting is loving ridiculous)

So I ask you goons, what the hell do I do?

Going into the house selling process, my plan was to pay off my wife's loans entirely and then take the rest of the money and put it into a large down payment on a different house (in a less desirable area, because I'm a cheapskate, and start the process over again). I figured if I could do that, and reduce our total debt while lowering our overall interest rate by a point or so, it'd be like refinancing.

I know absolutely nothing about investing, which is why I've been apprehensive to go in that direction (I'm not a betting man).

Any thoughts?
5.7% is a solid guaranteed return rate. I would pay off those student loans right away. Then stockpile cash in a high yield savings account (>1.4% at basically all online banks these days) for your down payment on the next house. You don't want short term (<5yr) savings in The Market. At most you could use a money market or short duration treasury fund.

When you say you know nothing about investing, do you and your wife contribute to a 401k? You want to put 15% of your gross away, at a minimum. While you have reasonably sizable high interest debts, I would say its best to only invest enough to hit employer match and kill the debt... As soon as the student loans are gone, >15%. That is another discussion though.

* # ¿ Feb 3, 2018 08:46
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# ¿ May 22, 2024 14:04
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The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > We just sold our house. What the hell do I do with the profits?