TL;DR: Go suddenly almost all in ~$400k-450k in an index fund, or is that crazy?
In mid 40s, married, with a good amount of earned/scrimped cash, small retirement accounts ($60k total), and self-bashing regrets on what might have been by now had I invested.
But all I can do now, really, is move ahead--I want to finally change this pattern, possibly this week. And I'm thinking of just going nearly all in: something like buying an index mutual fund with Vanguard or someone and just putting most of our cash, like $400-$450k, in it and retaining maybe $50k (?) as an emergency buffer in 2% interest bearing accounts. I know the market is high, but then again, the conventional wisdom seems to be to ignore that.
Is this insane? Or is insane not to?
My goals, ideally, would be:
- To move closer and closer to financial independence and early semi/retirement
- In the meantime, we're willing to work a few more years in more lucrative ($40k-$100k) jobs. Right now we're barely earning anything, though.
- Really just build the warchest.
- Look ahead to a home purchase, possibly (Range? $80k-$300k depending on area)
- And stop scrimping so much.
I'm, of course, afraid that I will have waited out the last decade+'s massive growth only to dump our life's savings at a potentially very weird time in U.S. history: this president seems a major wildcard), PE ratios are very high apparently... And maybe we could see another 2008 crash but no recovery or...or who knows. That would just be the ultimate body slam--after missing out on what would have made us basically retired by now, to then set us back 15 years in savings due to a "bet" on the market.
So...your thoughts on someone like me going, probably impulsively (after a loooong wait) almost "all in"????
Are there any tax consequences of buying in with such a large chunk? Other consequences I should know about?
Is keeping $50k out of the market too risk-averse? I know JoeTaxpayer here has discussed being 100% in the market.