An anonymous caller's cryptocurrency investments have recently surged to 17 percent of her overall investment portfolio. Considering the asset's volatility, should she readjust her allocation or invest fully?
Allison feels restless holding onto $1 million in cash with declining interest rates expected soon. How can she make the most of this money while keeping it accessible for purchasing a house with an uncertain timeline?
Jocelyn plans to buy a house in three years but is hesitant about keeping her large down payment in cash. What if she divides the funds and invests half?
Former financial planner Joe Saul-Sehy and I address these three inquiries in today’s episode.
Enjoy!
P.S. Have a question? Leave it here.
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Anonymous asks (at 03:16 minutes): A few years ago, I purchased two cryptocurrencies intending for them to represent five percent of my total portfolio, which includes equities, index funds, and bonds. Recently, the value of my crypto has ballooned to making up 17 percent of my portfolio.
I’m conflicted. Should I rebalance to my original allocation or hold on and see where it leads? I perceive cryptocurrency as a very risky and speculative asset, yet I also recognize its wealth-building potential. Could you provide a framework or advice for managing this asset class, especially considering its volatility?
Allison asks (at 29:15 minutes): Over the past year, I sold several rental properties and netted $1 million, which I currently have in high-yield savings accounts earning about 4 percent. However, with rates expected to decline, is there a more effective way to utilize this money while keeping it relatively liquid?
I intended to use these funds to purchase a new primary home in New England, but after a year of searching, options have been sparse, and I’m wary about spending that amount on a house that doesn’t excite me. A modest two- or three-bedroom home can range from $800,000 to $1 million.
I like the idea of being mortgage-free, but with significant property taxes in my preferred area, I would still face a substantial monthly cost, which adds to my uncertainty. Currently, I’m renting a two-bedroom apartment for $3,700.
Here’s some financial context:
I’m 48 years old.
I possess $2.5 million in investments ($2 million in a taxable account and $500,000 in retirement accounts).
I resigned from my high-paying physician job in early 2024 due to burnout and now operate a small cash-only practice that earns enough to cover my living costs.
I aim to fully retire 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 being utilized effectively just sitting in savings accounts. Would it be too risky to invest this money in a two- or four-fund strategy, given the uncertainty of my timeline?
Jocelyn asks (at 54:00 minutes): What’s the most effective way to manage the money I intend to use for a house upgrade in three years?
I’ve saved $250,000 for a down payment on a new home. Our current home is valued at $700,000 and is tied to a low-interest rate from the COVID era. I would like to keep it as a rental property, yet I’m open to selling if it's more financially advantageous.
The house I want to buy costs $1.2 million. I prefer making a 20 percent down payment, but I'm flexible and could put down less if needed. With this in mind, I’m considering the following strategy:
Maintain $100,000 in a high-yield savings account to cover the minimum down payment.
Invest the remaining $150,000 in stocks through a barbell allocation. This would provide a hedge against inflation and help the money grow if the markets perform well.
If the stock market rises in three years, withdraw the funds for a 20 percent down payment.
If the stock market declines in three years, retain the $150,000 investment and opt for a lower down payment.
Am I overanalyzing this? Does this strategy make sense, or should I take a more conservative approach and keep the down payment in a high-yield savings account?
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A caller who wishes to remain anonymous has seen her cryptocurrency investments surge to 17 percent of her overall investment portfolio. Considering the volatility of this asset class, should she adjust her allocations or fully commit to it?