What would you do with $170,000?

Thanks to our imminent move across the country, I have a dilemma.  In the grand scheme of life, it's a great dilemma, but one that is still causing me some anxiety.

What should I do with the $170,000 that we have saved up over the last three years? 

We will be living in an apartment for the first year in our new city so that we can become acclimated to life there and the local scene.  But after that, we are out of there. (See why in this post.)  

But where to next?  If the rent in our new city is pricey, you can only imagine how expensive buying a home is.  We could opt not to live in the city and move to the suburbs (not the 'burbs!), but even then we would be limited in what we could purchase for cash.  (A mortgage feels like it is not an option at this time given our enjoyment of debt-free living.)

We could move to a neighboring city and my husband could commute to his job.  This would be a downgrade in quality of life given his travel time, but it would allow us to buy a decent house for cash. We would even be able to buy a multi-unit.

Or we could find a modest rental in either of those locations and use our saved $170,000 for something else, like a rental property back in our "home" city where our other property is.  

If we buy property in our new city, we are foregoing rental income but hopefully holding steady or making money on our investment over a four year period and able to sell quickly at the end of those four years.  If we buy property in our home city, we are shelling out dollars for rent in our new city but we would have the added revenue stream from the second property.  

If we don't buy property, we are hoping that whatever we do invest the money in (index funds, most likely) will do just as well as a rental property in the stock market for the next four years.  

So I see five options. 

  1. Continue to pay high rent in our new city for the next five years (and totally miss our 5 year financial goals)
  2. Move to the 'burbs and buy a place for cash. 
  3. Move to a neighboring city and buy a single family home or multi-unit for cash.
  4. Rent in the 'burbs or neighboring city and buy a property for cash in our home city.
  5. Rent, buy nothing, and invest in index funds. 


What would you do?