"I am fairly certain I know the appropriate actions to take with this money": I have $70k from selling my house. Should I pay off debts or invest for higher returns?

Hey Money Minder,

So, here’s the deal – I’m selling my current place for a good price and snagging another home from my company at a great deal. After all is said and done, I’ll have around $70k left over. I have a plan in mind, but thought I’d check in with you to see if there’s anything else I should consider.

Here’s the breakdown of my debts:

Truck note: $20k
Car note: $8k
Credit cards: $3k
Student loan: $7k

Total debts: $38k

Once everything is paid off, I’ll have $32k in cash. I’m thinking of paying off all my debts and then putting the $32k into ladder CDs. I also plan to bump up my retirement contributions from 8% to 15% now that I’ll be pocketing $1500 extra without a mortgage payment. As for investments, I’ve been considering low-risk mutual funds in a brokerage account for the best return.

Got any different ideas for me? How would you suggest I make the most of this situation?

Farewell,
Financially Focused

Response from THE MONEY MINDER:

Hello There,

Congratulations on selling your current home at a high and finding a new one at a fair price through your company. It sounds like you’ve thought things through and have a clear plan for how to handle the $70k surplus from the transactions.

In terms of debt repayment, it’s a wise decision to use the surplus to pay off your truck note, car note, credit cards, and student loan, leaving you with $32k cash. Eliminating debt is always a great way to secure your financial future and reduce financial stress.

After clearing your debts, your plan to put the $32k in ladder CDs is a safe and conservative approach. Additionally, bumping up your retirement contributions from 8% to 15% is an excellent move, especially with the extra $1500 you’ll be saving from not having a monthly mortgage payment.

Considering your goal of finding the best return on investment, putting some money into a low-risk mutual fund in a brokerage account could be a good option. This can provide a higher yield compared to CDs while still maintaining a level of security. It might be worthwhile to speak with a financial advisor to explore a diverse range of investment options and tailor your strategy to your specific financial goals and risk tolerance.

Overall, your plan to capitalize on this situation is well-structured and thoughtful. Taking steps to eliminate debt, boost retirement savings, and invest wisely can set you on a solid financial path. All the best from THE MONEY MINDER as you navigate this exciting time in your financial journey.