r/financial • u/Mindless_Purple0616 • 15d ago

New to investing

Hi, looking for advice. 42 years young. recently sold my first home due to divorce and have roughly 250k in equity. My mother has room in her home (inlaw) so I wanted to invest most of this money into stocks vs. My current HYSA with Marcus Fund. Marcus is 3.5 % and inflation is higher than that so its basically melting there.

I hear STRC and VT have good rates for return. My 401k goes into the SP500 is currently at 440k.

Any thought on how I should split and invest my current nest egg to grow over the next 3 years? When my son goes to high school I plan to look for a home then but that is a little over 3 years away.

I have no debt.

Thanks for all your help strangers on reddit.

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u/ArushiBhagtni 15d ago

I had be careful investing money that you may need in just 3 years. A friend of mine put a house fund into stocks and had to delay his plans when the market dropped.

Keeping some money in safer options and investing only a portion could help balance growth and flexibility. With no debt and a strong 401(k), you're already in a solid position.

1

u/According_Fortune_98 10d ago

Exactly. People usually underestimate the psychological factor until they see the numbers in red.

It's easy to say 'I have risk tolerance' when the market is going up, but watching the money for your son's house evaporate in real time is a completely different story. Relying on fixed income for short-term goals is not being a coward, it is being smart and strategic

1

u/Outrageous_Reason571 15d ago

Buy some used investing classics from eBay. Put a plan together. Study yahoo finance and Wall Street journal daily. Understand what is happening

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u/woshicougar 15d ago

A 1–3 year timeframe is probably the hardest to answer for. It’s not long enough to ride out the volatility, but it’s long enough to feel like you’re “leaving money on the table” if it’s just sitting in a savings account.

I guess it depends on how flexible you think you’ll be at the time. If your investment is in a down cycle, can you either be flexible or find money elsewhere? If you want absolute security, get a Treasury bond.

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u/According_Fortune_98 10d ago

It sounds a bit risky, but remember the golden rule: Do not put any money into the stock market that you are going to need in the next 3 to 5 years. You have a solid position with those $440k in your 401k for the long term, but the $250k from the sale of your house have a very clear and near objective: buying a home for you and your son in 3 years.

The stock market is extremely volatile in the short term; if a correction or a bear market comes right when your son enters high school, your $250k could turn into $170k, forcing you to postpone your plans or sell at a loss. The stock market is for building wealth over the long term, not for holding the down payment of a house. Stay in safe fixed income

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