Sell stocks/RSUs or keep invested ??
I’m planning to buy my 2nd house by the end of the year and put ~$400k down. Since my portfolio is depending lot on the stock market, should I cash out my RSUs now and invest in savings a/c or keep invested till end of the year? Any better option for short term investment? My current portfolio: Cash: $70k Stocks: $70k RSUs: $120k Remaining $140k will be coming as $70k cash + $70k RSUs. Reserve cash: $50k extra Equity in 1st house: $250k Should I rather sell my current home to buy this bigger house? Is renting a good option considering my mortgage payments will be offset by rent?
Agree with comment above. Why put the whole amount into your house? The returns you earn from other investments could potentially be higher... plus, what if you need some cash later? Good to diversify rather than put that much into real estate IMO. Maybe others have a different opinion
SELL
Updated the post to reflect more details
Selling your own companys stocks is always the correct move. Invest it however else you'd like. That said, I've drank the coolaid and am holding my company's stock
How old are you? 2nd house in the bay is sweet
30
I don’t understand the desire to put so much of your net worth in an illiquid asset. Your exposure to systemic shocks will be profound.
Do some research into how much rent you can get for your house. Also be realistic about whether you're willing to be a landlord, and whether you'll want a property manager. It costs money or time. Single family homes don't make a lot of passive income, but depending on your existing mortgage, maybe the numbers will work out.
If you are planning to use the money for a purchase within the next year you should cash out and put it in a savings account or at most a short term bond fund. The points others are making about NOT using the whole amount are worth considering, but if it is your plan to use that money the stock market is the wrong place for short term saving.
Thanks everyone for reply! Consensus seems to be: Selling RSUs & diversifying, cashing out stocks now for down payment, selling current house instead of renting
Keep some of your RSU if you want but at least sell most
Depends who you ask but — general wisdom says you shouldn’t put more than 40% of your net worth into a house. And you should have at least 6 months of rainy day funds (to continue living monthly as you currently do). Regarding the (vested) RSUs, it’s your choice to keep them or sell them. Be mindful of what percentage of your net worth is staked in Facebook (compensation, stocks) and what percentage of your stocks are in FB. It’s generally best to diversify. You certainly don’t want all your eggs in one basket.