Sokoloka --
Number one -- KUDOS TO YOU MY FRIEND! You're way ahead of the pack!
Just so you know - there is no "right or wrong" guide to investing or how much cash to have on hand etc. It's more your personal comfort level. However.... having said that.... you have WAY too much dead money (savings).
At your age -- you should have maybe 10K in savings for peace of mind - and the rest should be in best of breed high quality stocks. The 80 + 55 - 10 is a nice 125K to invest which should MAKE YOU 6K a year in dividend income.... reinvested - you're going to be very very comfortable in retirement!
I'd hold the Citi.... banks suck right now but that won't be forever. Depending on what you have invested in it ($$ amount) you might see what it takes to average it down. It will pay a "real" dividend eventually as banks return to profitability. Read this thread --- think LONG TERM --- and it can pay handsomely to invest in "normally decent" stuff - when everyone else is running for the hills. Citibank ain't likely to go away. They really just need to get rid of Vicram but that's a different thread! LOL
Now -- on holding a years worth of "income" --- that's just nonsense. You're thinking like a guy that has no assets! When you have assets (liquid) you have options. Keep 10K for emergencies. Invest the rest. If you are unemployed for long term - you only need to sell or cash the dividend checks enough to live on in an emergency situation. You have 100K plus... you could make 5 to 6K a year in dividends alone - with ZERO growth (I figure 4% on average to be extra conservative)... so with minimum growth in capital - you'd have 10K a year (growth plus dividends) before you touched the principle and you still have the 10K emergency cash (so that's 20K for a year) to get you by on top of unemployment etc. You don't' own a house --- so you really just need to get by for awhile.
In your case - given your age - I'd put MINIMUM down payment and hold as much invested as you possibly can. Banks would look favorably on a guy with liquid assets. You're going to make money on your investments NOT on your house. That's a common fallacy. Even in good times nobody really makes any money on their primary residence - because as your house rises in value - so does everyone else's. You're just trading dollars. Investments make money and they double and double again.
Your 125K now - should double every 7 years. Let's look at what that looks like.
125K
250K
500K
1 MM
2 MM
4 MM
So in 35 years - 4 Million -- let's say you suck as an investor and only make 7% total return per year.... you're still going to be a couple million. At 2 million paying 5% dividend - you have 100K income.
If your house quadrupled during the 30 years you make payments on it -- back out the payments and interest - then factor in "you must live somewhere therefore you have a cost".... and the house doesn't pay you.
I'm not saying you shouldn't own a house... I'm just saying I wouldn't be robbing your savings which in the long run will make you far more money on your money.
