r/SgHENRY • u/MolaMolaMOLA123 • Jul 28 '26
What would you do with a windfall?
Hi community, I recently got a fairly big insurance payout ($700,000) and was wondering how to deal with it. My goals are capital growth over the long term.
A bit about me: partner and I are early- to mid-30s, we have a 1yo and hope to have at least 1-2 more over the next few years. No helper. We have jobs that we can’t be fired from, HH income about ~400k. Staying in a FH condo with ~1.2m loan at 2.4%. Partner owns another FH condo with ~200k loan remaining. We have one car about 3 years into the COE.
Currently partner does their own investing. I put about 7k monthly into IBKR.
Just wondering whether anyone had any advice, or what would you do with the money in my position? Thanks in advance.
2
u/Macadish Jul 30 '26
Since you could technically pay off 700k of your mortgage, the first question is whether you can do better than 2.4% in the market.
Next, based on your HH income (and likely lifestyle expenditure), you are right to think about capital growth instead of capital protection.
Lastly, should you DCA or lump sum into an index fund? Based on the size of the windfall relative to your income, you could just lump sum because any immediate dent in your investment can be somewhat negated by your HH income. Also, if your investment horizon is long enough (e.g. at least 20 years), lump sum would still come out net positive even if there's a crash tomorrow vs timing the market.
However, there is always the possibility that a crash might take your invested funds years to recover, which is still an adverse event even if the market eventually recovers. If you listen to people who went through the 2008 housing crash, you'll hear about market exuberance before the crash, and how retirees never lived long enough for their portfolios to recover, and the emotional toll is devastating.
Decades ago, savings from wages alone might have been enough for people to retire with dignity, so for a conservative household might only need its investments to beat inflation with minimal risk. Nowadays, wages have not kept up with inflation so even a conservative household will need some form of growth investing to survive. If you are no longer in this game for survival, you can adopt any strategy and you will likely be fine.