Investing for a House: Should You Pull Out?

Kevin should consider pulling out house down payment money from the market to secure it for a future home purchase.

### Should You Pull Money from the Market for a House Down Payment?
* 💰  If you have a house down payment in the market and plan to buy a house in three years, the decision to **pull out or continue investing** depends on various factors.
* 💸 " If you have an expense that's going to be inside the next three to five years, **cash is really your friend**.
* 📈  The current market is strong, so if you sell now and park the money in cash, it could potentially **earn 5% interest over the next three years**.
* 💡  Consider your risk tolerance and whether you can continue building cash on the side while simultaneously **dollar cost averaging out of the market over a fixed timeline**.
* 🏠  If you're certain about buying a house in three years, it might be safer to move the money to **cash** to protect it from **potential market downturns**.
* 🤔  The decision ultimately depends on individual circumstances, such as **cash flow, income, the size of the down payment, and overall financial situation**.
* 🤠  One perspective is to "firm up" the money for the house goal, aiming to **earn over 5% on the cash** to be used for the down payment.
* 🎯  It's important to balance the desire to **maximize returns** with the need to **protect funds earmarked for specific short-term goals**.

[Music] This is Kevin's question. He wrote in and said, If I have a house down payment house down payment money in the market currently and I'm looking to buy a house in three or so years, should I pull it out now or just stop continuing to put money in? Alright, um, stop continuing to put money in. Why would Kevin stop putting money money? So to be honest, I don't know, but I like like the initial question, dollar cost averaging into his. So is it just time to I mean, really the question is, should he just pull it out now? What you do now, that's I think that's if it's three years away, but you have the ability to save cash between now and then from the down payment, well then you should probably save the cash. Let's assume that you don't. That's not what you're talking about. What you're saying is, I've got enough in down payment right now that I uh, that in 3 years it would satisfy the down payment. This is a hard, this is a, this is a hard

one because we are all subject to fear and greed right like we all get caught in that in that mix because you've heard us say that if you have an expense that's going to be inside the next three to five years cash is really your friend like and this is what you know about the market right now. The market is at a really strong place so if you were to just sell today Park that money in cash it's going to make 5%. You know of interest rates stay where they are for the next 3 years and it'll be there for you to satisfy the down payment but I'm just thinking about me personally oh now this is where I'm glad you let me close on this cuz you you're in a greedy way you like oh you keep that money working make gritty gritty gritty. I mean three years because what if he's been doing this for you know a long period of time because he wanted to buy a house hold yeah oh there we go well say your pece say your peace that's true wind fold yep.

so no wind walk away. It's still going. So what? What I would think through was okay been saving. I've been dollar cross Aver. Can I still build up cash on the side over the next three years as I move towards down payment, and simultaneously, while I'm doing that, just like I was able to dollar cost average into the market, can have a strategy where I'm also dollar cost averaging out of the market over some fix timeline so that I could get there. Now I don't know the specific of your situation. I'm just telling you that's the way that I might think through it. Agree, disagree. I mean, want to fight. You know what a house is great for shelter, mhm. You know, if this is the goal and he's been saving for and Kevin, you, I would have already told you if you knew you were making this decision in the next three to five years you're investing this money in it's better to be lucky than good sometimes you've gotten lucky cu the Market's up big.

right now, you know, 2023 was a good year. It's been up this year primarily only from a few stocks that have kind of really pushed it up. I think that if I know I'm moving into a house in the next three years and you're pretty solid on that three. Pigs get fat. Hogs get slaughtered. You go to cash today. I would probably. I would definitely be looking into firming that money up for my goal, trying to maximize, trying to get over 5% on the cash and being feeling. But by the way, you're not selling the whole portfolio. You're selling what you need for the house 'cause he's still going to have money, hopefully always be buying into his Roth and his 401ks, his other retirement assets. So it's not like he's going to cash on everything. He's going to cash on what he needs in the next 3 years. It amazes me when people write me these questions like, hey, I'm Enga.

getting engaged to my girlfriend in the next 12 months. Do you think I to pull that money out of the stock market so I can bothering okay that was you you should you've already been rolling the dice cuz this thing could get gutted and lose 30 25 to 30% of its value and then what are you going to do I I think that that's yeah it's it's that fear and greed and people us humans we love maximizing and I'm all about maximizing too but I think that within 3 years it's probably better to have that that that cash sitting there because it's already earmarked for the house hey I hear you guy I'm not no I am disagreeing with you but like you got but you heard two different ideas right there and that's it depends on your cash flow your income what the down payment is your financial situation um I think you could go either way that's good food for thoughty cowboy Bo over here Field General of your army of dollar bills

right here. Wow, those are both pretty cool titles though a cowboy and a field General. All right.

Should I Pull My Down Payment Out of the Market Now or Wait 3 Years?

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The Money Guy Show

The Dilemma of Investing for a Future House Down Payment

Kevin is unsure whether to continue putting money into the market for a house down payment or to pull it out now, given that he plans to buy a house in three years.

The advice suggests that if he has enough for the down payment now and no ability to save more, he should consider moving the money to cash to ensure its availability.

The discussion highlights the struggle between the fear of missing out on market gains and the security of having cash for an upcoming expense.

Strategy for Building Cash for a Down Payment

Consider dollar cost averaging to build up cash for a down payment over the next three years.

It may also be wise to have a strategy for dollar cost averaging out of the market over a fixed timeline as you approach your goal.

Firm up the money for your house goal, aiming for over 5% on the cash, while still continuing to invest in other retirement assets.

Pulling Money Out of the Stock Market for an Engagement

Consider pulling money out of the stock market to protect it from potential loss, given the uncertainty of the market.

However, the decision should depend on your cash flow, income, and financial situation, as it could also depend on the down payment and your overall financial goals.

It's important to weigh the options and consider what's best for your specific circumstances.

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