I am 30 years old. My wife is 34 years old. We saved $ 350,000 and I have $ 350,000 for retirement. Should we pay for a house in cash or take out a mortgage and invest it?

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Dear Quentin: After finishing graduate school, my wife and I decided to pay off all of our debts before buying a house or anything else. We have been renting cheaply for the last three years and living like I am still a very poor graduate student. During this time, we paid off all of our debts and even saved around $ 350,000 in cash.

My wife is 30 years old, I am 34 and we are ready to take the next step. We now have two children under the age of two who are over $ 20,000 and are growing in each of their 529. We are both covered by comprehensive term life insurance and I have my own work disability policy. I earn about $ 250,000 a year. I am very fortunate that my employer contributes around $ 40,000 to my 401 (k) while I contribute up to the remaining Internal Revenue Service maximum of approximately $ 57,000 per year. Our family’s contribution to the HSA is maximized and grows each year. My spouse now stays home with the kids. We have a combined retirement portfolio of around $ 325,000. At this point, should we make a cash offer on a home or take out a loan and invest the difference? Not having a mortgage in our 30s seems awfully nice. Conversely, investing could yield higher returns in the long run. Sincerely, At A Crossroads You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com. Dear Crossroads: Congratulations, paying off that debt and saving so aggressively is quite an accomplishment, and one that few people your age can do. The key is usually in the question. You are already approaching the house. As a rule of thumb, it is always recommended to put all your money in one place. So if you were to suggest something, and it‘s just a suggestion, NOT a recommendation, you can also split the difference and pay 25% to 50% on a new home, and keep the rest to invest, save, and one day rainy. All in moderation, even spending your hard-earned savings. Of course, you can live in a house of your choice in the neighborhood of your choice, and you can enjoy that every day, just like your children. Having children can also influence how much you are willing to spend on a home and where you are prepared to live based on the schools and amenities in that district. It is not just an investment, it is a quality of life option, perhaps one of the most important options outside of choosing a life partner. MarketWatch Retirement and CPA columnist Riley Adams recently broached a question with you, breaking down the pros and cons of both. The Stock Advantage: “Stocks are liquid. Proven track record of success. Earn dividends. Easy to diversify your portfolio. “The downsides of stocks:” An emotional roller coaster. Short-term volatility. Capital gains taxes. ” That depends on your and your wife’s risk tolerance, and how much time you are willing and able to spend investing. The real estate advantage, according to Adams’ advice: “A hedge against market volatility. Tax advantages. Cash flow. “And, like I said, you enjoy it every day. The downsides:” Real estate takes time and money. Your money is tied up. Tons of fees. Not easy to diversify. ” And, if you are paying a mortgage, you must also pay interest in addition to the principal, which is tax deductible. The same goes for property taxes. But paying that interest allows you to free up that extra money. In fact, a recent study by the Federal Reserve Bank of New York looked at consumer preferences toward home ownership and how their attitudes have changed during the course of the COVID-19 pandemic. Survey participants were asked to rate which was the best investment (a home or financial assets such as stocks) and what factors contributed to their choice. About 90% of those surveyed said they would rather have their primary residence than invest in the market. Sit down with your wife and a financial advisor and discuss your options. The counselor, like a good therapist, should ask you questions and you should have all the answers. My billionaire husband is 90 years old. I have cared for him for 41 years, but it does not help my son. Hello MarketWatchers. Take a look at Moneyist’s private FB Facebook group, -0.86%, where we look for answers to life’s thorniest money problems. Readers write to me with all kinds of dilemmas. Post your questions, tell me what you want to know more about, or comment on the latest Moneyist columns. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, on all media and platforms, including third parties.