Investingrefinancing Cash

Q: I’m a 44-year-old IT professional earning $70,000 a year. I own a four-unit building that I’m refinancing to get cash. I have no savings. What would be the best mix of stocks and real estate for a $30,000 investment?
— D. Hill, Baltimore

A: At age 44, with a $70,000 salary and a four-unit building, it’s alarming that you don’t have anything saved toward your retirement. Check to see if your employer offers a 401(k), 403(b), or 457 retirement plan and join it during the next enrollment period. We at BE suggest you save 10% to 15% of your income, but you must balance your living expenses and the cost of your newly refinanced mortgage against the amount you save each pay period.

Hold off on acquiring more real estate with the $30,000 you’ll receive after refinancing until you can maintain a steady stream of income from the extra apartments in the building you own; you don’t need another mortgage right now. Place $20,000 of the refinance money in six-month certificates of deposit. (Go to’s “100 highest yields” page: www.bankrate .com/brm/rate/high_ratehome.asp.) Or consider an online savings account with ING Direct, which yields 2.0%. This will keep your money liquid enough for emergencies or for when you want to buy the next property. Use the remaining $10,000 to open a variable annuity account that has investment sub-accounts. You can arrange to borrow against this account in an emergency, but it should be committed to retirement only.