A reader on Reddit expressed frustrations saving money for a house they didn't end up buying — but left the deposit sitting in cash. The S&P 500 rallied higher leaving them — and their cash — behind.
"I'm 29, have about $190k saved, and I've been saving around $2,000 a month. For years I was waiting to buy a house, so I kept all my money in cash. That plan's dead now.
I've finally started DCAing (dollar cost averaging) into the market, but the regret is maddening. I can't stop thinking about how much I missed out on by waiting. Watching my cash sit there, knowing it could've been growing for years. It's eating me alive.
I know hindsight is 20/20, but it doesn't make it hurt any less. I'm trying to focus on what I can do now, but man … the frustration is real. Has anyone else felt this level of regret when starting late? How did you get past it?"
IBD's Response:
It's only natural to feel a tinge of regret when you miss a big market rally like the one we've seen. I don't know when you started setting cash aside for the house. But if it was three years ago, you're right, the S&P 500 is up 71.8% since then.
But what's important now is what's next. What happened in the past is just history — nothing more. The key is learning from the experience and moving forward. Here are some suggestions to help you.
Put It In Perspective
It can be helpful to put a dollar sign on what happened. This helps you mentally quantify what the move actually meant.
This helps you set expectations for the future, which is all that matters now. Many people inflate what another decision would have meant.
I don't know your specifics, but had you invested the $190,000 in the S&P 500 in the past three years, you'd have $326,419 now. That's a gain of $136,000. In contrast, had you kept your money in a 3.5% APR savings account, it would be worth $210,656 now or a gain of $20,656. The opportunity cost is roughly $116,000.
This isn't to make you feel bad. It's just to show it's not catastrophic. We're talking a manageable amount to make up. It's about a year-and-a-half in salary for the typical American, again, not the end of the world by any stretch of the imagination.
But this calculation also gives you something to shoot for. Assuming a 10% annual return and $190,000 investment, you should be able to make back the $116,000 in five years. And that doesn't even count the additional $2,000 a month you're saving. So again, a setback, yes. Not a hole, though, you can't get out of.
Know You Did The Right Thing At The Time
A home is a great investment. And you were totally right to keep your house fund safe in cash since you were so serious about buying. I can't tell you how many horror stories I've heard about people losing their down payments in a down market.
Keep in mind, too, the S&P 500's rally looks obvious now. But it didn't look like that in April. The S&P 500 plunged on fear of tariffs and recession. Many investors were panic selling back then.
Also, pat yourself on the back. Your savings skills are solid. To have $190,000 saved in a taxable account before turning 30 years old is great. And you're adding $2,000 a month, which is solid, too.
Have Your Game Plan
All this is to say what you do next is what's most important. Glad to hear you're dollar cost averaging into the market. This will help smooth your cost basis, especially when the S&P 500 falls. Also, pleased you're not taking huge risks to make up for lost time. You're young. You have time, as long as you have patience.
A diversified basket of low cost index ETFs should get your portfolio growing again over the long term. One caution, though. Are you sure buying a house is off the table? I'd hate to see you dive into the market with both feet in time for a correction and lack the liquidity if your dream home frees up.
Keep up the good work. Just look forward.
