I have ~$100K in cash right now that I need to put somewhere. I plan on using the money for a down payment on a home sometime in the next 2 to 7 years (if I were a betting man, I'd say in 3.5 years). So I need the money to be somewhat liquid and not too volatile. That said, I could probably buy a home without the money (using funders from other places), so if there's a riskier option that may be somewhat volatile, I may be interested.
I think the things to consider here are tax implications of any gains (e.g. short or long-term gains), and risk/reward. A few options I've considered are
- Money market fund
- Index funds (S&P 500)
This is the first time I've had this kind of cash to manage, so I'm looking for any advice I can get. Thanks!
EDIT: It's not necessary that I use this for a down payment. I would say the requirement is that in 7 years, I can get the money as cash and do whatever I want with it.
EDIT: Sorry, I've been behind on this one... I'm planning on using this money for a down payment in the next 3-5yrs. I also have a $40K emergency fund, so I could potentially borrow from that to make the downpayment. I also may not need all $100K for the down payment.
I do have a job. And in the next 3-5yrs, I expect my salary to increase by ~50%. (Not sure if this matters.)
My risk tolerance is probably somewhere in the middle. I could see taking 1/3 of the money and putting it into something pretty risky that may take 10yrs to pay off.