Investing $50k + Real Estate


I would say that, for the most part, money should not be invested in the stock market or real estate. Mostly this money should be kept in savings:

I feel like your emergency fund is light. You do not indicate what your expenses are per month, but unless you can live off of 1K/month, that is pretty low. I would bump that to about 15K, but that really depends upon your expenses. You may want to go higher when you consider your real estate investments. What happens if a water heater needs replacement? (41K left)

EDIT: As stated you could reduce your expenses, in an emergency, to 2K. At the bare minimum your emergency fund should be 12K. I'd still be likely to have more as you don't have any money in sinking funds or designated savings and the real estate leaves you a bit exposed. In your shoes, I'd have 12K as a general emergency fund. Another 5K in a car fund (I don't mind driving a 5,000 car), 5k in a real estate/home repair fund, and save about 400 per month for yearly insurance and tax costs.

Your first point is incorrect, you do have debt in the form of a car lease. That car needs to be replaced, and you might want to upgrade the other car. How much? Perhaps spend 12K on each and sell the existing car for 2K? (19K left).

Congratulations on attempting to bootstrap a software company. What kind of cash do you anticipate needing? How about keeping 10K designated for that? (9K left)

Assuming that medical school will run you about 50K per year for 4 years how do you propose to pay for it? Assuming that you put away 4K per month for 24 months and have 9K, you will come up about 95K short assuming some interests in your favor. The time frame is too short to invest it, so you are stuck with crappy bank rates.


My spouse will only be entering medical school within 2 years at the earliest, and will likely be there for about 4-5 years. If she get's into the school she wants we would not have to move

This is probably the biggest return on investment that you can get. Sure, you could invest what you have in the market and take out tens or hundreds of thousands of dollars on "cheap" medical school loans, but consider this:

  • What is your wife hates medical school, or decides not to be a doctor? If there's no "cash" invested it will be easier (psychologically) to walk away, and then you've still got the student loans but not the extra income to pay them off
  • Paying for medical school with cash will force you to live on a lower budget
  • She can take the job she wants the most, rather than feeling like she has to take the biggest paycheck to pay off the loans
  • Paying cash will help you find a school that you can afford and keep expenses to a minimum.

Figure out how much you need for all 4-5 years, and develop a plan to make sure you can cash-flow the entire education.

Bootstrapping a software company has potential for high rewards, but a much greater risk. you could get 10X back or you could lose it all.

With your income, you've got plenty of time to save for college, so I don't see that as a huge win now.

I would also dump the lease - you can probably get a much better car for $16k that the five-year old one you have when the lease is up. (or get a similar car for less money). With no debt and a good income you do not need a credit score. The lease probably didn't help it that much anyways - you're paying more for the lease than any benefit you would get by a higher score.


I have been on the same boat as you are right now. So basically, it depends on your goals, risk tolerance, upcoming life events! You want a plan not just for this particular 50K, but for your household assets and future earnings to come!

My suggestion: Get a flat fee, online financial advisor to do the work for you. You don’t have to figure this out by yourself.

Personally, I would invest in a portfolio that:

  1. Offers dynamic asset allocation plans that evolves over time based on changing market conditions.

  2. Offers a healthy mix of beta and alpha strategies along with the liquidity and ability to monitor activity online.

  3. Has structural risk management in place. Risk management is as much about increasing risk as it is about cutting risk. Therefore, you want a plan for de-allocating and re-allocating risk

Hope this helps.