[USER]

Married (46 and 42 yo) with two kids (6 and 12). Take home pay 300k/yr, two houses (1 mil in equity, one of the houses is a rental), 2 mil in 401k, 2 mil in brokerage account, 600k in HYSA. Have about 4k every month that can go twd HYSA or brokerage. Thoughts on where to put it as well as the amt kept in HYSA seems high. Thoughts on diversifying further into real estate additional rentals?

[Pi Eliza]

I think there’s something called enough. Enjoy the money. Time is your limiting factor.

If you don’t have any college/young adult fund, I would direct it there. Otherwise, make yourself enjoy the $2k and increase your lifestyle a bit. Get the 2nd car, the cool bag etc. Money is for investing, spending, gifting. I think you have the first part done well, now work on the last two parts.

You should model your compound interest with and without the additional $4k per month in brokerage. I would bet there isn’t that much difference. I modeled 4M with extra 4k and at 7 cagr turned out to be 17M vs 15M after 20 years.

Will that 2M change your life? Or would you rather splurge some now and find a balance to build memories with your family? What if the stock market crashes 30%, that could easily wipe out millions. So, does the extra $4k matter?

[David]

I don’t know your monthly spend but you probably have enough saved up to FIRE and not have to worry about extra income from investment properties unless you want one for a vacation home.

If you already have your kids higher educational needs taken care of, I would suggest spending the money on nice family vacations.

Proposed: FIRE at 45 with $5K extra: Optimal investment strategy?

[Chas]

I’d say drop the hysa down to 6months of your spend, and put the rest towards a brokerage account. I’m not finding great rentals right now.

[Hope]

Congrats! I would:

1. Leave 500k in the HYSA, and put the rest in your brokerage. Top up HYSA when needed so it never goes below 500k.

2. Max out 529 for the kids college funds

3. Keep maxing out your 401k, HSA, and any other pre tax accounts available to you

4. Vacation, make memories with your family, and give to others so their lives can be better as well.

5. If you still have anything left, just put it in your brokerage. I wouldn’t worry about more rentals tbh. I have a few rentals but if I could swap them for 4m+ in the stock market, I would do it in a heartbeat. It’s a hassle.

Good luck

[Peter]

Your take home pay is 300k and you spend 252k a year? Or did you mean 300k is gross. You would need at least double the amount you have now to retire unless you can reduce your expenses.

[Lee]

I would FIRE with that net worth and spend time with the kids. They only young once and time flies so fast. My favorite thing is travel the world with my children (40 countries before their college years).

[Stacey]

Retire. Based on how much you’ve saved and the fact that you probably haven’t been making $300k for a long time, it looks like you are getting by on less than $150k a year. Maybe substantially less. You have $4.6 million and at a 3.5% withdrawal rate that is $161k.

Retire and live nicely off your investments.

[Author]

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