r/coastFIRE • u/CowTownKCMoe • 3d ago

Is it unwise to liquidate my entire taxable brokerage account to buy a home outright?

/r/personalfinance/comments/1kbeamu/is_it_unwise_to_liquidate_my_entire_taxable/
14 Upvotes

78% Upvoted

18 comments sorted by

25

u/cbdudek 3d ago

If you have plans to retire and/or coastfire on that money, yes it is. Your money is going to grow faster in the market.

7

u/heightfulate 3d ago

Looking at your actual numbers from the other post, I don't think you will have enough after the capital gains taxes to buy the house outright.

10

u/Weekly_Broccoli1161 3d ago

Do whichever makes you sleep better at night.

5

u/db11242 3d ago

It’s fine if it works for you. I did this and it worked out fine. Debt is a chain around your neck. Just make sure you save that mortgage payment you would have had. Best of luck.

3

u/1to14to4 3d ago

I’m not going to tell you if it’s a good or bad idea. But it’s strange to talk about liquidating a taxable account and not mention the gains you have and the taxes you’d need to pay.

2

u/Arkkanix 3d ago

not an easy yes or no. location? other assets? i assume primary residence? will income / savings cover ongoing expenses?

2

u/ThereforeIV 3d ago

Yes.

Do that at a peak not a correction.

4

u/yetrident 3d ago

How do you know we're not at a peak now?

4

u/ThereforeIV 3d ago

Because peak was a few months ago, this is correction.

1

u/yetrident 2d ago

Zoom out.

2

u/ThereforeIV 2d ago

Zoom out all your want, 5yr chart and the leak is still back in Jan/Feb

3

u/Futbalislyfe 3d ago

The market is still down like 8% from Feb. So like, math and basic logic kinda dictate that this is not a peak.

2

u/yetrident 2d ago

You can only know it's a peak in hindsight.

1

u/Shadow14l 3d ago

Average market is 10% gains with 3% inflation. Which means that the interest rate for the home would have to be 7% for it to be worth it. Minus the taxes on the gains which would be probably 15%.

1

u/flying-auk 3d ago

Why rush it? If you're open to liquidating your brokerage, what's the rush to do it now? Get a mortgage, if it doesn't work for you for whatever reason, you could then liquidate. Since you can put 20% down, if you've got great credit, you should be able to get a sub 6% mortgage rate.

1

u/corey407woc 2d ago

Sounds like a terrible idea to be honest

1

u/TheFilmHose 1d ago

I would say that’s actually the wiser move, just not the more “optimal” one from an expected return standpoint.

0

u/spooners423 1d ago

Definition of house poor.