04-24-2015, 02:00 AM
Welcome. I'm actually in a bit of a similar situation, got extra cash and want to buy a house at some point that is probably within 10 years. The way I play it?
a) cash reserve tucked away on a separate account that is large enough for the down payment for the house.
b) rest of my extra cash goes into stocks, not exactly a set amount per month but pretty close to that.
I've already reached my goal for the cash reserve, so no money is going into that one anymore. I'm accumulating these shares with the idea of buy & hold forever. Stable dividend payers/growers and a few companies with a higher and less stable dividend, just to increase cashflow into the portfolio. (might need that due to low job security.) The whole idea here is that I've got enough on that cash account so that I do not NEED to sell my shares when I eventually buy the house. When the time comes, I can evaluate between selling shares to pay off a larger part of the house at first versus keeping my investments and getting a bigger mortgage.
It's a balance between profit and risk management, and only you know what is the right balance for you. The last thing you want happening is that you will have to sell your portfolio at an unfavourable time because you absolutely need the money.
a) cash reserve tucked away on a separate account that is large enough for the down payment for the house.
b) rest of my extra cash goes into stocks, not exactly a set amount per month but pretty close to that.
I've already reached my goal for the cash reserve, so no money is going into that one anymore. I'm accumulating these shares with the idea of buy & hold forever. Stable dividend payers/growers and a few companies with a higher and less stable dividend, just to increase cashflow into the portfolio. (might need that due to low job security.) The whole idea here is that I've got enough on that cash account so that I do not NEED to sell my shares when I eventually buy the house. When the time comes, I can evaluate between selling shares to pay off a larger part of the house at first versus keeping my investments and getting a bigger mortgage.
It's a balance between profit and risk management, and only you know what is the right balance for you. The last thing you want happening is that you will have to sell your portfolio at an unfavourable time because you absolutely need the money.