What Should I Do With $150K Cash, No Debt, No Dependants and No Job?
February 28, 2016 1:35 AM   Subscribe

I've always put money into an emergency fund in case I lost my job: I lost my job, and of course I'm glad I created the emergency fund, but I'm not actually quite sure what to do with it. I guess I'm wondering here if/ how I could use it to make some significant life changes - rather than just lose it on rent and living expenses for however long it takes me to get back on my feet.

1) I'm middle-aged, from the UK, and have worked in the US for the past 13 years.
2) Most of this time I was on a work visa so, being in a volatile industry in which lay-offs were common, feelings of insecurity/ impermanence led to pretty constant worry/ stress about my future/ ability to stay in the US, which in turn led me to saving much/ spending little, hence the $150K.
3) I now have a green card, but was laid-off last year.
4) I've always been career-oriented and focused on moving up, but I appear to have blown a fuse and, despite searching for jobs daily and having an updated resume and considering myself "interview ready", I'm not actually applying for many jobs. I can't exactly put my finger on why: I've taken a good break - including quite a bit of travel, which I thought would rejuvenate me - but I'm noticing that as time passes and the number of months of unemployment I have left - currently 3 - decreases, it's not getting any better. (Yes, I'm definitely experiencing a degree of depression - as one does in these circumstances - but I don't want to make this thread about that). I'm guessing part of this is that, honestly, when I was younger I was motivated by the allure of nice houses, fast cars etc - *things*, which were also much more attainable in the US - and now these just aren't priorities for me. In fact, I don't really have clear priorities like that now - I know I need a roof over my head, I know I need healthcare (I'm not on any meds - just for the insurance of it), I know I need wi-fi, I know worry and stress are debilitating, I know I like to travel from time to time, and I know I'd like a dog. (I'd also like to live in Japan for a while, but I think that's a pretty big project that may not bear addressing in this 3 month time frame)
5) I'm going to move state next week to see if a change of scene helps (I've been in the same city for all of those 13 years, and I'm guessing some of my burn-out is related to needing a change of environment), but I really need a contingency plan for if that doesn't work out.

So: how could I use the $150K, which I've been saving for this exact scenario (I also have $130K in a 401k, which no, I'm not considering taking out, just explaining that I have at least some retirement savings)?
The only thing I've come up with so far is to move back to my hometown in the UK - where I still have a few family members, and where I could afford to buy a small property outright (property is prohibitively expensive where I currently live in the US), and then do part-time work to pay the bills, and I wouldn't have to worry about healthcare as it's free in the UK (although doing this would mean losing my green card as you can't leave the US for longer than 6 months in a year, and I can't get US citizenship for another 3-4 years).
Any other thoughts/ ideas/ experiences to share/ words of wisdom?
posted by anonymous to Work & Money (23 answers total) 13 users marked this as a favorite
 
Reverse culture shock is a thing at least as big as the culture shock of moving to a new place. What would you actually want to do with the rest of your life on said property in hometown? If you have a good idea, great. If it's a default I'd rethink it. That option will likely be there later. Re Japan, the one thing I do know a bit about. If that's a dream this might be a good time. Could be possible. Maybe just for a shorter term. Depends upon a lot like skills, expectations, etc. Memail me if you like. The changed green card limits really are terrible. Mrs. Gotanda lost hers.
posted by Gotanda at 2:03 AM on February 28, 2016 [4 favorites]


Your next job doesn't have to a career job. It can just be a job to cover bills. Moving to another place within the US is a good idea. If I was you, I would spend the next twelve months in a low-stress job figuring out what you want to do with the next 50yrs. Keep the dosh in a savings account for easy access and live off wages. Spend your non-working hours in voluntary work and reading some of those 'find yourself' books until you have a good idea of your next life plan. Stay in the states until you can get citizenship (unless it means giving up your UK citizenship - that is more valuable) by which time you will have a much better idea of what you want to do over the next few decades.

You are a very lucky person - you have the freedom to reinvent your whole life.
posted by Thella at 2:35 AM on February 28, 2016 [8 favorites]


I'd use part of the money to talk to a career coach / life coach type person. I know it sounds really woo, but I worked with one about five years ago and she was so helpful in guiding me to figuring out what I wanted from my job and life overall.

I agree with the advice that your next job doesn't need to be a career job - you could even volunteer if you find that that kind of work appeals more to you right now. It feels like the universe has given you a little pause, and there's no harm in taking it and letting it settle in for a while until you find yourself getting excited about a new path.
posted by ukdanae at 2:50 AM on February 28, 2016 [2 favorites]


I would get some counseling. Being laid off cause cause or add to deprssion and you can feel yourself struggeling. Do you have friends or support in your current location? In the location your planning to move to? Job change is a huge source of life stress. So is moving. If you're not moving towards support or for another huge upswing, now is not a great time. Therapy can help you sort out your funk/next steps!
posted by Kalmya at 4:40 AM on February 28, 2016


Keeping some of the cash on hand is wise, but at least $100k of that money could easily go into investments. Open an IRA now if you haven't and max it out, then put the rest in personal investments, or even into an educational fund for yourself. Don't let it rot from inflation.
posted by deathpanels at 5:09 AM on February 28, 2016 [7 favorites]


Buy a small really really nice houseboat for half your nest egg or less. Park it at a marina. Get a part time job to cover expenses. Volunteer. When the mood strikes you relocate the boat 1000s of miles away (by driving it on the water that is) and repeat.
posted by chasles at 5:18 AM on February 28, 2016 [5 favorites]


It would be helpful to know your field and if you wish to stay in it. There are loads of places in the US where you could buy a property outright for the cost of an economy car. You could live there until you found a job and built your fund up again, and then buy a larger house and use the smaller one as a rent house. The rent (since you paid cash for it) would all go to the note on the larger house.

You could also use that money to open up your own business.

Or, hey, just go to Japan. It doesn't sound like you are married with kids, which means that you have a freedom that most people only dream of, so why not make a big jump? Have some fun. Right now you are writing the stories that you will tell people when you are old. Write something really good.
posted by myselfasme at 6:04 AM on February 28, 2016 [8 favorites]


The 6 month limit isn't set in stone. You can also apply for a re-entry permit that is usually good for 2 years.
posted by rippersid at 7:12 AM on February 28, 2016


Go back to school? Maybe in a certification program that will both interest you and be a help in getting employed. Or if you are above the level at which certs mean anything (as I suspect you are if were able to save that money), help you branch out. For example, if you were in finance, you could get better qualified for banking. If you were in IT, you could learn about cryptography on the internet (very topical). Whatever.
posted by SemiSalt at 7:58 AM on February 28, 2016


I'd suggest you stay where you are - unless an opportunity to move to a new location because of a new job presents itself. Otherwise I'm a big fan of changing one aspect of your life at once.... although if you're already packing to move next week that's not a problem ;)

Otherwise, as has been said, look at Life Coaching / Career Coaching. As you're "time rich" do seek out personal reviews ( "I have used this person" rather than "my friend does that" ), as in my limited experience of the industry its open to anyone who fancies talking to people, but a properly qualified and experienced consultant able to take an external view of your life could provide some valuable insight, especially if you're trying to narrow down that "what do I do next?" feeling.
posted by DancingYear at 9:30 AM on February 28, 2016


Keeping some of the cash on hand is wise, but at least $100k of that money could easily go into investments. Open an IRA now if you haven't and max it out, then put the rest in personal investments, or even into an educational fund for yourself. Don't let it rot from inflation.

That may have been useful advice while he was employed, but it is NOT now, when he is facing a period of unpredictably long unemployment and/or major life changes which will require capital investment. He just doesn't know how much of that money he may need in the relatively short term, and he can't necessarily wait out the volatility of any particular investment. E.g., if he had put that $100K into an S&P 500 index a year ago, he'd have lost several thousand dollars by now. Also, putting money in a deductible IRA will effectively lock him out of it. In the current interest-rate environment, in the relative short term, losses from inflation will be relatively minimal. (It may be relatively harmless to put some of the money in a short-term CD, but, due to the same environment, the return will be very modest.)

When his situation settles, he may wish to reevaluate where his money should be sitting, but right now he is experiencing precisely the kind of uncertainty that he sought to protect himself against by keeping his money in cash. This is not the time to get significantly less liquid.
posted by praemunire at 11:03 AM on February 28, 2016 [8 favorites]


You could move to a low tax state and buy a cheap house. Work part time or make a game of trying to figure out how to a) earn enough interest on your investments and b) spend so little that work is optional. (You can Google more info on this, but, off the top of my head, Alaska, Nevada and Wyoming are three of the top five lowest tax states in the US, iirc. You typically find this kind of info on retirement websites.)

You could read a bunch of real estate books and go into the business of flipping houses. Buy a cheap house. Move in. Fix it up. Sell it. If you are good at this, it can pay well and you can move around as you see fit.

You could try your hand at making money doing something that always interested you or whatever oddball thing you dream up.

I will suggest you read the book "How to survive without a salary."

Look at this as an opportunity to dream up and create a new life.

Don't go back to the UK. Go elsewhere in the US. If you aren't in the western half of the continental US, move further west. It will put you closer to Japan, making it easier to work towards that dream as well.

Best of luck.
posted by Michele in California at 12:50 PM on February 28, 2016 [1 favorite]


My thoughts are that life is still long, and $150K in the US may not be enough to ride out to a comfortable retirement. So it's important to put things in order first:

1. Put together a budget for the next 3 months, with an emphasis on staying lean so you don't add a financial burden to your current situation. Don't tie up your funds in a house or expensive car as you don't have solid income prospects yet.
2. You mention that you are middle-aged, and currently unemployed. I would make this the first priority to figure out for yourself. If you've stalled in a job hunt, you need some alternative tacks to making things work:

- Get honest feedback from interviewers or a knowledgeable person in your industry on job prospects for you. Have people review your resume and provide feedback
- Work with a coach or mentor to identify 2-3 likely job paths. 1 may be in your current industry, but open up to possibilities in others.
- Network, a lot. Find people who are in the jobs or verticals that you want to pursue and ask them how they got in, and more importantly, outright state that you're actively looking for opportunities and ask them to intro the right people for you or keep an eye out for you.

3. You mention that you're moving states. How many people will you know in your new home? Make a point of volunteering or finding social groups quickly so you can feel more settled. It's possible that the move can be overwhelming, so perhaps just pick 1 social hobby and start with that.

TL;DR - Give yourself these 3 months to live lean, expand your social and professional network, and focus on a new career path that will let you settle in and focus on other things you may want to enjoy in life. Good luck!
posted by hampanda at 1:08 PM on February 28, 2016


I'm really alarmed that you're unaware that $130,000 at middle age isn't even close to what you'll need for retirement. Not by a long shot. If I were in your shoes, I'd make earning and investing a high level priority, because otherwise I see a retirement characterized by eating cat food and living in a shelter. I am not exaggerating. Look at a retirement calculator online and see what you need to do to retire and you'll see what I mean.

I don't know how to address the fact that you keep shooting yourself in the foot by not applying for jobs. That kind of self-destructive behavior mystifies me. The $150,000 you have should be saved for (a) emergencies and (b) retirement, and staying unemployed by not applying for jobs is not an emergency. It's no less a choice than burning dollar bills is. (If you've been applying consistently and are still unemployed, that's an emergency.)

But seriously, GET A JOB. I don't mean this in a moralistic sense. I mean that YOU will be miserable if you have no retirement fund. How long do you imagine $130K will last? Even if you live at only $30K a year, that's maybe six years, ten if your definition of middle age is lower than mine (and you keep saving, which you don't seem to be doing as you're unemployed). Surely you're going to live longer than that. Short-term frustration and mild depression are nothing compared to being homeless at 70. GET A JOB. And best of luck. I mean it. I just think someone needs to tell you that your financial situation is perilous, and you really shouldn't buy a houseboat in your state (boats being holes in the water that you shovel money into, places to dock being rare, etc.).

Good luck. Really.
posted by Capri at 1:22 PM on February 28, 2016 [1 favorite]


"I'd also like to live in Japan for a while"

Japanese love brits.

You've got the money to take a 3 week visit of Japan. Get the 3 week Japan Rail pass and tour from Hakodate to Fukuoka (and beyond).

Japan kinda sorta needs workers:

https://research.stlouisfed.org/fred2/series/LFWA64TTJPQ647S and it sounds like your field is something applicable there.

In a year of part-time study one can pick up the basics of Japanese. Learning to read 40 kanji a week will give you the basic mass of literacy wrt the ~2000 "general use" characters to be able to bumble around a lot easier.

$150,000 is also enough to just move to Japan and enroll in a language school full-time (costs $20,000/yr I believe). Cost of living wouldn't be that bad, actually, if you're willing to live like a Japanese, or at least non-Westerner (that was my downfall).
posted by Heywood Mogroot III at 2:18 PM on February 28, 2016 [2 favorites]


I would ask myself these following questions:

  • Do I really want to stay in my current field, if being laid off is always a looming prospect?
  • If I do want to stay in my field, then more specifically, what type of employer or organization do I want to work for?
  • To what other fields are my skills, knowledge, experience and education transferrable?
  • Depending on your answers to the above, is it better to stay where you are, or explore other major US metropolitan markets that offer a better economic outlook for the job you're seeking?
  • What is the cheapest way for me to relocate to one of these cities?*

    If not already doing so, you should be following a budget, and there are a gazillion AskMe questions on that. Here's a quick calculator if you need one. Having saved $150k, it sounds like you already know how to live frugally.

    Since you love dogs, become a part-time dog walker. Dogs are the best distraction on the planet.

    Last but not least, I strongly agree with Kalmya's advice above to seek counseling. Being unemployed can be depressing, and it sounds like you were already under a lot of stress from your previous job and visa situation. That you were able to maintain a pragmatic approach and save $150k says a lot about your survival skills- don't let depression or unemployment discount that.

  • *[I know the general consensus is to not move without a job offer in-hand, but unless it's the SF Bay area/Silicon Valley or NYC, I think relocating to a city with high job prospects + $150k is a gamble worth taking. You will be more readily available for interviews - and with job-hunting being a numbers game, the more interviews, the better].
    posted by invisible ink at 2:38 PM on February 28, 2016 [2 favorites]


    That may have been useful advice while he was employed, but it is NOT now, when he is facing a period of unpredictably long unemployment and/or major life changes which will require capital investment. He just doesn't know how much of that money he may need in the relatively short term, and he can't necessarily wait out the volatility of any particular investment. E.g., if he had put that $100K into an S&P 500 index a year ago, he'd have lost several thousand dollars by now. Also, putting money in a deductible IRA will effectively lock him out of it. In the current interest-rate environment, in the relative short term, losses from inflation will be relatively minimal. (It may be relatively harmless to put some of the money in a short-term CD, but, due to the same environment, the return will be very modest.)
    I sincerely doubt that the OP requires $150,000 of liquid cash to get through a short period of unemployment.

    I can't tell from the question what exactly are the OP's regular monthly living expenses, but from the sound of it they don't have many. Even if you're living on $5,000 a month you can survive for nearly a year on just $50k of that money and still have $100k left over that could theoretically be put in any of a number of investment vehicles.

    As far as market performance, sure, if you take 2015-2016 as the rule then stocks are not a good investment, but if the OP had asked this question three years ago they would have excellent returns one year out. Note that 50% of the historical returns on the S&P 500 come from reinvesting dividends. Even on a down year, stocks pay dividends. If you're talking about an index fund, that's a long-term (>1 year) investment and you should obviously not use it to park liquid cash that you need access to. But that's the point. The OP does not need an extra $100k in liquid cash. So that money can either be generating dividends and potentially gaining in value during a market upswing... or it can be sitting in a checking account losing a guaranteed $2000-4000. If you're averse to the market, insert your own investment option here -- housing, bonds, Pokémon cards, whatever. Anything is better than cash, and a CD/savings account is only slightly better than cash with today's rates.

    It's also hinted in the question that the OP doesn't have much in retirement savings. They they identify as middle-aged and are old enough to have worked abroad for over a decade so I am guessing around age 45? $130k is not enough when retirement is 20 years away. IRAs are perfect for bolstering your retirement savings and you can roll the old job's 401k over into the IRA when/if you want. Really, there's nothing foolish about being "locked" out of that money until retirement age. You will need that money a lot more when you're 65 than you will over the next six months. (And it will be more money by then, if you invest it.)

    OP, unless you are set to inherit millions of dollars from some old beloved aunt, do not take an extended sabbatical from working. Do not take the whimsical advice to buy a boat and sail the seven seas like some middle-aged Peter Pan. It might help you feel better temporarily, but that feeling of freedom will wear off when reality sets in. Set aside the money you need for living expenses for the next few months. Deduct that from your total. Set aside a bit of stress relief money -- like, maybe take a trip to visit friends or go somewhere sunny for a bit. Deduct that amount from the total. Then invest the remainder for your future self and start making some adult decisions about what you're going to do when your unemployment is up. Where do you want to live? Is there work for you there? Do you want to change careers? Lots of options, so start working it out now.

    Finally, if you are depressed, please get help. You won't be able to make the best decisions for yourself unless you are well and depression is a health condition like any other. If you had a broken leg and it was preventing you from working, you would go to the hospital and get it in a cast before the end of the day. Don't let your depression prevent you from moving forward. I don't know what area you are in but I'm sure there are resources for you, and many therapists/counselors are willing to work on a sliding scale.
    posted by deathpanels at 2:43 PM on February 28, 2016 [3 favorites]


    I sincerely doubt that the OP requires $150,000 of liquid cash to get through a short period of unemployment.

    He does not know how long that period is going to be. It's scary out there for the middle-aged laid-off. He has also indicated that he might want to move internationally or buy property, in which case his expenditures will be even higher. (And there is always the possibility of an additional emergency coinciding with this one. Most importantly, what if he becomes seriously ill before he finds a new job? One is not guaranteed to have only one emergency at a time.)

    As far as market performance, sure, if you take 2015-2016 as the rule then stocks are not a good investment, but if the OP had asked this question three years ago they would have excellent returns one year out.

    This is exactly the point. An unemployed middle-aged guy should not be taking on additional market risk. Not until he's resolved his situation: figured out what he's going to do with his life, determined what the expenses of that life are going to be, and secured income to pay them.

    Even on a down year, stocks pay dividends.

    First of all, there is never any actual guarantee that any common stock will pay dividends in any given period. Second, more importantly, dividends aren't some magic cash spring. They come out of the stock value. (You will usually see the value of a stock be diminished by the appropriate amount at the dividend date.) Dividends won't magically eliminate losses if OP has to sell stock to meet expenses.

    So that money can either be generating dividends and potentially gaining in value during a market upswing... or it can be sitting in a checking account losing a guaranteed $2000-4000.

    I'm kind of at a loss here. It seems to me that you genuinely do not appreciate that it is possible to experience substantial short-term losses while invested in equities. Even though that is what most investors in equities have experienced over the past year, and even though it's not even been ten years since equities were absolutely hammered, all over the place, across the board, wreaking havoc on people with short-term investment horizons such as those about to retire who had to sell stock and realize losses just to meet expenses. Equities and similar investments do not offer the option you have described of "making some money, and maybe getting lucky and making a lot!" There is always the possibility of getting unlucky and losing a lot, as well, most especially in the short term. You can, in fact, do worse than lose ~0.7% (2015's rate) to inflation. A lot worse.

    Conservative, liquid investments for short-term investors are paying very little right now. As I said, it's not going to do him much, if any, harm to put some of that money into such investments, but neither is it going to do him a ton of good. The basic point is that any investment which offers the possibility of significant return will also involve the risk of significant short-term loss, which someone in his situation needs to avoid. If OP does resolve his situation in a short period of time and without needing to make any larger expenditures of the kind he seems to be contemplating, he will have lost very little in terms of potential gains (and can then consider whether keeping more than half his portfolio in cash is better in the long run; most likely, not). If it turns out that he needs that money, he'll be glad he has it, and not in a form where he may be required to realize losses to access it.
    posted by praemunire at 4:07 PM on February 28, 2016 [1 favorite]


    If I were you, I'd try to spend as little as possible. Don't blow lots of money unless you're darned sure you want to move home to the UK, or whatever. Don't go on fun trips to Japan. People are unemployed here for years on end these days, and who the hell knows if or when you can ever get a job again. I get what it's like to not want to job hunt, but you really, really, really should be doing it and make yourself do it. You don't know how long your current nice state of affairs and money is going to last if you get sick or something or can't get a job for 3 years. Having that much money while unemployed is REALLY REALLY FORTUNATE, but don't blow it.
    posted by jenfullmoon at 5:29 PM on February 28, 2016 [1 favorite]


    Act as if you do not have the money. What would you do then?

    Seems like it is not about the money but more about yourself and where you are in life. Don't complicate things with the money aspect-that is not the question -it is just muddling up your mind. The question more seems like where do you go from here.
    posted by stepup at 5:57 PM on February 28, 2016 [1 favorite]


    I'm not actually applying to many jobs. I can't put my finger on why...
    In fact, I don't really have clear priorities like that now...


    I agree that this isn't really a money problem and nthing the people who suggested counseling, life/career coaches, therapy, etc. If you can figure out what you actually want now it will be much easier to decide how to best spend your money.

    I only just started reading Barbara Sher's I Could Do Anything If Only I Knew What It Was so I can't testify as to the results but Chapter 10 - Regrouping: It's A Whole New Ballgame was basically written for you.
    posted by yeahlikethat at 9:53 AM on February 29, 2016


    I guess I'm wondering here if/ how I could use it to make some significant life changes - rather than just lose it on rent and living expenses for however long it takes me to get back on my feet.... So: how could I use the $150K, which I've been saving for this exact scenario


    buy a houseboat. live aboard it. get a part time job. volunteer.

    a houseboat is significantly more affordable than a home or continuous rent. boat slips for live aboard are easy to find, and waaay less expensive than rent. so for half the nest egg OP has a place to live that is owned outright, and maybe 1/10th the nest egg for keeping it somewhere. then for all the suggestions to get a life coach, or attend therapy i suggest a radical change of scenery without relocation expenses and a serious evaluation of ones possessions (sorting through which material possessions can be taken into the limited storage of a boat) have significant value toward solving the general malaise without paying a "life coach" despite some people's assertions that boatlife is a modern peter pan or a "hole in the water in which to throw money"

    buy a houseboat. get a fun partime job. volunteer to help some group of people in need.
    posted by chasles at 10:22 AM on March 4, 2016


    Hi. I just stumbled across this post, and am genuinely wondering how things worked out (or are working out) for you?
    posted by bannan at 8:41 PM on July 27, 2016 [1 favorite]


    « Older How do you know it's the right time to have a baby...   |   Address Authorization Management as a Service Newer »
    This thread is closed to new comments.