What to do with home sale proceeds?

[riverwed070707]

Hello SA fam! I listed one of my rentals Wednesday and accepted a full asking offer within 24 hours I have lived in it 2 of the last 5 years so capital gains do not apply. After realtor fees, mortgage payoff, etc. I should have about $88k left over. Since I've cut back my working hours and have some renovation projects in process, I do have some funds earmarked but there is quite a bit left over I'm not sure what to do with and thought this group might have some suggestions I haven't thought of.

Allocation of sale proceeds:
$20k to re-up my emergency savings I've had to tap into recently due to a number of off cycle expenses
$6,000 lump sum to max 2022 Roth IRA
$15k new car fund (this is a big maybe but I'm not loving the cheap car I picked up last month after my accident in January and I'd like to have the money set aside if I decide to swap it out)
$10k to finish up an in-progress rental renovation
$7k travel - This is on the high side but we have a couple summer trips planned and with my part-time fully remote work I'd like to take advantage of the ability to work from anywhere a bit this year

After all that, I have $30k left.

Few additional details:
- I haven't ventured into looking at retirement contribution options as a contract employee beyond funding my Roth IRA and I'm contributing significantly less than I have in the past right now
- I do not plan to reinvest in additional real estate projects at this time; if I change my mind, I have a refi coming up in may that will give me an extra $20-30k to cover that investment
- No short/mid-term things I'm saving for
- Long term, planning to sell the house and hit the road in 5-6 years. Rentals will cover monthly expenses. While I'm not sitting on a large pile of cash right now, I'm anticipating pocketing $100k+ from the sale of the primary that will act as a cushion
- All of my properties are mortgaged with rates between 2.5-3.5% - not interested in paying them down or off

I didn't want to offer info overload, but let me know if additional expense/budget details would be helpful in shaping your suggestions! TIA

[disneysteve]

What is that 30K for? What do you want to use it for, and when? That will determine what to do with it.

If you expect to need this money within 3-5 years, that's one thing. If you want it to be additional retirement savings that's another. Do you want it to generate current income? Lots of ways you could go but you haven't given enough info to point you in any particular direction.

[riverwed070707]

What is that 30K for? What do you want to use it for, and when? That will determine what to do with it.

If you expect to need this money within 3-5 years, that's one thing. If you want it to be additional retirement savings that's another. Do you want it to generate current income? Lots of ways you could go but you haven't given enough info to point you in any particular direction.

Ha I think that's the problem. I decided to sell for a number of reasons but primarily because I was getting uncomfortable with how depleted my e-fund was getting, I am running out of funds to finish my current reno project, property values are sky high and most of all because if I were to wait, I would no longer be exempt from capital gains if I held onto it past August of this year. I needed the $45-55k I have earmarked and the rest is just bonus money so I'm trying to decide where to park it if I don't need it for the foreseeable future if it doesn't have a designated purpose.

[ua_guy]

What does "hit the road in 5-6 years" mean? I can tell you all sorts of way to spend that on an RV or RV travels if that's what you're referring to

[disneysteve]

the rest is just bonus money so I'm trying to decide where to park it if I don't need it for the foreseeable future if it doesn't have a designated purpose.

Didn't we just have a thread about what to do with a windfall?

It sounds like you have a plan to reconfigure your life in 5-6 years. I'd probably invest based on that as you likely don't yet know what that will actually cost. Right now, I bonds would be a good place to park 10K (20K if you're married). You can't beat the current interest rate of 7+% which may rise to 8% with the next adjustment.

[riverwed070707]

What does "hit the road in 5-6 years" mean? I can tell you all sorts of way to spend that on an RV or RV travels if that's what you're referring to

Ha. Well I've had an RV for the last few years which was long enough for me to realize I don't have the knowledge to own and maintain one and finding help to learn is too hard. Currently have it for sale. While most of my travel at the beginning will likely be in North America so my dog can travel with me, I've written off the idea of an RV and will likely do a combo of camping, farm stays and long term airbnbs in various places with everything I need in a small SUV or van.

[Jluke]

You may need some of that 30k to get a vehicle. Not sure how far 15k goes these days with the car situation.

as we don’t have the whole picture I don’t know if 30k is a lot in the grand scheme.

I would either add it to my cash pile or invest some of it. My go to funds are VTI and Wellington (not tax efficient)

[ua_guy]

Ha. Well I've had an RV for the last few years which was long enough for me to realize I don't have the knowledge to own and maintain one and finding help to learn is too hard. Currently have it for sale. While most of my travel at the beginning will likely be in North America so my dog can travel with me, I've written off the idea of an RV and will likely do a combo of camping, farm stays and long term airbnbs in various places with everything I need in a small SUV or van.

Sorry to hear RV's can be a lot of work, and a lot of expense. I totally understand that!!

[LivingAlmostLarge]

what's the college situation for the kiddo? What is the situation for the car? Would you have a camper? Or buy a bigger car? Will $15k cover the difference bewteen what you have and what you want? Have you looked at car prices lately OMG. When I figure out what I do with my money I'll post. Tell me what you do with yours!

I keep circling back on maybe a trip. Mostly save for kiddos, invest the bulk, maybe some 0% CC early, and a tiny bit of fun.

[riverwed070707]

Didn't we just have a thread about what to do with a windfall?

It sounds like you have a plan to reconfigure your life in 5-6 years. I'd probably invest based on that as you likely don't yet know what that will actually cost. Right now, I bonds would be a good place to park 10K (20K if you're married). You can't beat the current interest rate of 7+% which may rise to 8% with the next adjustment.

I've seen I Bonds mentioned here a few times but never looked into them. I'm shocked the rates are so high. I've never done bonds of any sort. Will research further! Thanks for the suggestion

[riverwed070707]

what's the college situation for the kiddo? What is the situation for the car? Would you have a camper? Or buy a bigger car? Will $15k cover the difference bewteen what you have and what you want? Have you looked at car prices lately OMG. When I figure out what I do with my money I'll post. Tell me what you do with yours!

I keep circling back on maybe a trip. Mostly save for kiddos, invest the bulk, maybe some 0% CC early, and a tiny bit of fun.

Great question on college. It's never been a big priority for me to pay for college. If she doesn't get a sports scholarship, we've spent some time talking about taking a gap year to grow up a bit, work/save and make sure she's making a good choice for her situation, but ultimately, its not a large part of my financial considerations. Of my 3 siblings I was the only one who paid for my own college and I was also the only one who graduated in 4 years and my education cost the least because I was paying myself and cost conscious about how money was being spent. I suppose that has shaped my opinion quite a bit of paying.

I'm done with campers. I find them intimidating and stressful. Don't necessarily need a bigger car, just something more reliable. I am very aware of prices as I was just in the market to buy a month ago. Out of frustration for the increased costs, I ended up purchasing an 08 with high miles wholesale from a dealer knowing its kind of a "temp" situation until I was ready to get what I wanted. I wouldn't buy new - probably still something 10-ish years old, just with better mileage and maintenance records. I think $15k + whatever I get from the car I have now will be sufficient.

Would love to hear what you end up doing. ::runs off to revisit suggestions shared in your thread a few weeks back::

[LivingAlmostLarge]

Great question on college. It's never been a big priority for me to pay for college. If she doesn't get a sports scholarship, we've spent some time talking about taking a gap year to grow up a bit, work/save and make sure she's making a good choice for her situation, but ultimately, its not a large part of my financial considerations. Of my 3 siblings I was the only one who paid for my own college and I was also the only one who graduated in 4 years and my education cost the least because I was paying myself and cost conscious about how money was being spent. I suppose that has shaped my opinion quite a bit of paying.

I'm done with campers. I find them intimidating and stressful. Don't necessarily need a bigger car, just something more reliable. I am very aware of prices as I was just in the market to buy a month ago. Out of frustration for the increased costs, I ended up purchasing an 08 with high miles wholesale from a dealer knowing its kind of a "temp" situation until I was ready to get what I wanted. I wouldn't buy new - probably still something 10-ish years old, just with better mileage and maintenance records. I think $15k + whatever I get from the car I have now will be sufficient.

Would love to hear what you end up doing. ::runs off to revisit suggestions shared in your thread a few weeks back::

Right now looking like a pipe dream. Who knows when it will come through.

[bjl584]

If I were in your position I'd just park the money into something safe that can pay me a little bit of interest.

Sounds like you have a lot of ideas and plans, but nothing immediate.
A little cooling off time might be helpful