Cash Is King: Now What Should I Do With It?
My wife and I are lucky. Really lucky.
The economy is in shambles, the housing market is still trying to figure itself out, job security is a thing of the past, and Lost is still confusing the crap out of me. But we still feel incredibly lucky.
What could possibly so much relief to a person's life during these times?
How about a huge pile of cash? Me and my wife, we've got it. We got married last year and got tons of cash gifts, which was incredible. Plus we've been saving as much money as possible for the past couple of years for a down payment on a place. But we're not sure we can afford the place we want just yet. We may be another year or so away.
So having this pile of cash has given us peace of mind like you wouldn't believe.
But it's also paralyzed me with a new set of decisions I never thought I'd have to face: what should I do with all this money?
The plan is to buy a place, yes, I get that. I should probably stick to the plan. But here are some other ideas I probably need to be talked out of (fast!) before I get lured in or before my wife finds out about some of them:
- Travel: People always say that they should've traveled more when they were young, but they just didn't have the money. Then when they're older they can't because they don't have the time. Well, I'm 28 and I definitely have the money. With this much money, you can make the time. We have no kids, either, so we're good there. It's tempting to sketch out a trip to Argentina, a cruise to Alaska, and a safari through the Serengeti and just do it. Both my wife and I would love it. Probability: C-. I'm just too chicken to do it.
- Baby money: We're thinking of bringing a mini WC Porter into the world within the next year or so. Since I'm a person that tends to freak out, having a lot of money set aside for baby stuff (diapers, bouncy chairs, sippy cups) would make me feel more comfortable about it. I'm sure I'm overthinking this bit, but it's something totally new and kind of scary, so at least I could come home to my pile of cash and find some comfort. Probability: C. It's kind of silly.
- Cushion: Keep it all where it is (ING) and don't touch it. Maybe we both get fired next week and this is what gets us over the hump. They call it an emergency fund for a reason. Either way, having it in the bank is an incredible stress reliever, especially when so many people are losing their jobs. If I didn't have the cash and I got fired, guess what I would do? That's right, I'd be doing the freak-out dance. Probability: B. It's the sensible thing to do.
- Down Payment: Use it for what it was meant to be used. Revolutionary, no? We've wanted to live in our own place for a long time, we just haven't seen something we can afford that we love. So maybe we hold out until we do (prices need to come down just a tad more). Plus there are some breaks out there for 2009 that would help us out. The only thing is that we would be blowing a TON of money on the down payment, which makes me nervous—I would miss my pile so much. And having a baby while signing mortgage papers at the same time? Paging Dr. Stress, Dr. Stress please. Probability: A. It's the original plan.
- Double it: This is the latest one that jumped into my skull the other day. I look at what Citigroup's stock has done over the past week or so (doubled) and the huge rally the market had on Monday (up 7%), and my head starts crunching the numbers: "So if I had bought Citi stock at under $1, that means my pile would be at—" And then I start freaking out. If I managed to double this pile of cash we could buy a really nice place, travel a ton, and still have enough for the baby's diapers. Probability: F. My wife would stab me with a pen and then divorce me...unless it worked.
I think it's pretty obvious what we should do. Or at least it's obvious what we shouldn't do.
Are there any other possibilities I should consider? After all, when else am I going to be young, rich, and in the driver's seat?
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