HYSA

iiluvvvvu2

Anytime! ~10% in the long-term. So it’s on average more than double a HYSA (and almost double what T-Bills are getting right now). And yes, interest on a HYSA is taxed as regular income which, at your tax bracket, is higher than long-term capital gains tax on ETFs. And you would only pay the capital gains tax when you sell the ETFs which will be in retirement likely at a low tax bracket since you’re retired, vs paying the income tax on the HYSA interest yearly. Interest on T-Bills is also taxed as regular income, but at least you’re getting 1% more than HYSAs and you only pay federal income tax, not state or local. But I’d still only use this for house fund money. If you’re worried about market dips, don’t deploy all the capital in your retirement accounts into the market at once. You can slowly buy in. But I’d definitely recommend maxing out those retirement accounts and eventually having heavy market exposure via ETFs and Mutual Funds, especially at your age.

thatcsguy5

Thank you for the feedback! Out of curiosity, what is the average return of VOO and VTI year after year? My Ally HYSA guarantees a 4.20% return every year. Are VOO and VTI really that much better? Or is it the fact that you don't pay taxes on VOO/VTI every year (whereas I do pay taxed on my earned Ally HYSA interest every year)?

thatcsguy5

Thank you for the feedback! Out of curiosity, what is the average return of ETFs like VOO and VTI year after year? My Ally HYSA guarantees a 4.20% return every year. Are VOO and VTI really that much better? Or is it the fact that you don't pay taxes on VOO/VTI every year (whereas I do pay taxed on my earned Ally HYSA interest every year)?

thatcsguy5

Thank you for the feedback! Out of curiosity, what is the average return of VOO and VTI year after year? My Ally HYSA guarantees a 4.20% return every year. Are VOO and VTI really that much better? Or is it the fact that you don't pay taxes on VOO/VTI every year (whereas I do pay taxed on my earned Ally HYSA interest every year)?

gt35r

Id recommend just continuing to do what you're doing and not getting side tracked by social media or youtubers saying to buy things instead of it. What you're doing is what I wished I had started at that age and if you continue you'll be better off than most. Also it removes the emotion completely from investing. I personally do a few hundred a week into VOO and one lump sum per month into HYSA as an emergency fund. Set it and forget it and enjoy your life.

Uatatoka

Roth IRA is more important long term. Max that out first in VTI ETF. Also, most money market funds are beating HYSA. VMFXX is 5.28% for eg

MagicalPeanut

I’ve changed my strategy over the years, but currently, I do something similar to that of wheeling SPY. My returns generally beat the market (15-20% per year), with last year being the exception when I was up 22.31%, while SPY was up somewhere around 24.76%. I haven’t been keeping track this year as diligently as I did in previous years. I switched from Ameritrade to Fidelity to take advantage of the 5% APY on uninvested cash and decided to move my emergency fund there since it offered better rates than my HYSA. So now my spreadsheet is a more high level overview of my finances rather than just my options. Currently, my return is at 4.17%, compared to 5.25% for SPY if you're interested. Regarding the traditional wheel strategy, it typically involves trying to exit stock positions and making most of your profits from selling puts. With an account that pays interest on uninvested cash, especially in today’s high-interest-rate environment, you could potentially do extremely well. My approach is a bit different—I use Facebook Prophet for time series forecasting, allowing the forecast to determine the deltas at which I sell options. Additionally, I plan to buy and hold throughout the entire month of December for a couple of reasons: to avoid wash sales for tax purposes and because historically, the “Santa Claus Rally” has outperformed my any strategy I try to use during this month so I gave up trying to beat the market. And similar to this, September is always very tight on the call side and very loose on the put side. Another unique aspect of my strategy is that I aim for a 50/50 split between put and call options. For instance, if I find myself with all cash and 10 SPY puts to sell, I might sell 5 at a 25 delta and 5 at a 40 delta. This way, I increase the probability of owning shares on half of my positions. Even if SPY remains high, I’ll still benefit from its performance by collecting higher than normal premiums.

RyanStonepeak

>My wife and I are very good at saving and investing and not living outside our means so this additional money we don't really need. You're off to a great start right here. >My wife and I have no outstanding debt outside of a single car loan and a small mortgage payment. What are the interest rates on these? If either is above 7%, I would pay it off on the assumption that you couldn't *reliably* get a better return over the life of the loan. Plus there are tax reasons you'd prefer to pay debt over gaining additional income. >My kids will enter college within the next four years so I'm trying to take that into consideration as well. How much do you need the investments to go well in order to help your children with college? From what I've read, 3 years is the threshold for whether you should be aggressive or risk averse with the investments, but it's obviously not a one size fits all rule. With all this in mind, I'd recommend the following flow chart. 1. If either loan is above 7%, pay it off. 2. If you need the money to pay for college, CD's have some great rates right now, as do HYSA's. It's boring, and that's a good thing. 3. If you don't need the money to pay for college, an S&P 500 ETF is the way to go. I prefer SPY but you can take your pick. 4. If (and only if) you have any experience with options, a protective put might be worth paying for. It will cap your downside exposure if the market takes a downturn, while still giving you most of your upside exposure.

sirzoop

I would keep 20k in the HYSA and everything extra throw into Fidelity go. Simple as that build it to 100k then 500k!

Thediciplematt

I’d follow the personal finance sticky if I were you. I made an absolute killing on an IPO so I turned up my pre/post tax to maximize the 63k contribution and took home a paycheck of 0 for a year. Then I just “paid” myself in the stock vest. It is a good way to lower overall taxes if you can do it. Otherwise I’d just throw it in an HYSA and just pay for college.

kiwimancy

First of all, your risk free opportunity cost is tbills, not a mediocre savings account. Second, if the market drops 15% in a year and you have 20% in the market and 20% in HY bonds and 60% in tbills, you would get about 0% return. Your portfolio may or may not be appropriate for you. If your goal is to consistently beat a HYSA, then just tbills would be best.

Fit_Paper_8825

i was so fr bro. i need to start flipping my money, but don’t know how to start so thanks for putting me on game with HYSA. About to research it

blackjack_bull

Anybody want to provide feedback on my plan to beat a HYSA this year? The moderator bot removes my posts :( "I am putting $25,000 to work for 6 months as an experiment to beat the HYSA it is in (4.25% apy with ally), with a setup that would still perform during a this-year market drop. I'm fairly new to this, and this is my "stab in the dark" after looking around: To start I want to put $15,000 into t-bills. I read about t-bills, bonds, cds, and t-bills seem to be great for their liquidity and tax benefits. I'm fine expecting to get 5.3% apy from these, correct? With that in mind... To not miss out on potential stock market returns, I want to put $5,000 into FMILX (Fidelity New Millennium Fund). If the s&p does well, this fund would get phenomenal returns. I regularly trade SPY (small account, high risk options), and feel semi-comfortable with what I've observed this year to date to come up with this. The next six months could absolutely be a correction period, or just ignore this drop and keep zooming. Additionally, I want to put another $5,000 into HYBL, because of their dividend history. 19 cents a share a month is $34 a month, or 8% a year, which seems awesome on paper. Then if the s&p goes up, I see even bigger returns. I found them using tools on Fidelity, if that means anything. All that said, if the market does well, then duh this will perform great. More importantly, let me know if my thinking is right. I don't think it's stupid to think the most the s&p could drop in the next 6 months is 14-15%, which is a lot, but not impossible. I am using the dividends off the HYBL and the t bills as a hedge against the s&p dropping. No such thing as free money, but to me, this looks like a solid plan to at least earn 1-2% on the money (if the market drops 15%) which is at least on par with the HYSA. But if the bull continues, I could see a significant short term gain: The dividends yield (+$204), t bill earnings (est 5.3% apy, so +$400), a -The dividends on HYBL would yield +$204. -The last six months of FMILX did +20%. So +10-220% in the next six would be +$500-$1,000. -HYBL would perform similarly, keeping the prediction simple at +$500-$1000. -Assuming 5.3% apy on the t-bills, that's +$400. All taken into account, my predictive results of this mix after six months invested are: In a poor index market, the $25000 would grow to $25,250-$25,500 (1-2%). The HYSA would have grown to $25,531.50 (potentially a percent better performance than my mix). In a great index market, the $25000 would grow to $26,604-$27,604, a 6.4%-10.4% gain. Obviously outperforming a HYSA. Am I going down the wrong path for my goals? Did I approach this well, or am I missing key factors? Thanks for any feedback at all."

darkciti

The credit card usage metric always gets me. When HYSA is at 5% and banks will give me a credit card for 0% interest for 18 months, of course I'm going to put every goddamned dollar I can spend on a credit card. That's a straight up 5% of everything I buy (food, etc). Why the fuck should I use my money when I can use the banks money at 0% and earn 5% on my money until my intro rate is over?

mcrissjr

The HYSA is no issue. If you do nothing else you should nearly empty your checking into the HYSA. The checking is losing you money to inflation. I'd still recommend funding a Roth IRA.

cjorgensen

My HYSA account is calculated daily on the full balance, but paid monthly.

sukinkeasuki

Yep, I think they’re a bit narrow-minded, but I just can’t knock on them because VT is infinitely better than bonds or HYSA, or not saving for retirement like a lot of people.

Living_Web8710

HYSA is a savings account the rate is based on fed interest rates. HYSA pays %5 in a year. You just told me VFFX is 4% YTD. You have a lot of learning to do. You can waste a lot of time learning stuff for likely marginal benefit since you’re investing small sum. Just tuck everything into VFFX within your IRA. Come back at 60 years old and voi la. Compounding interest in a tax free low cost widely diversified portfolio with appropriate allocation between stocks and bonds that changes as you get closer to retirement. This is all happening while you do your life and stop trying to Google “what is stock”.

_galaga_

VFFVX is up >14% over the last year. Just to underline the point about you picking a short window and comparing to the current HYSA rate. Especially when it comes to a retirement timeline you'll want to lengthen the window out to get a look at longer term trends. HYSAs are also tied to current interest rates and will travel up or down in sync with those rates. If you wanted to "lock in" 5% yield for a significant length of time you'd turn to bonds which have longer maturities. What Target Date funds like VFFVX do is have an internal mix of stock and bond funds and over time they shift the proportion of stock vs bond exposure to become more conservative the closer you get to retirement to preserve capital and reduce risk. You're asking good questions but I think it'd be good to start researching the basics of stocks, bonds, ETFs, etc. to get an idea what their various pros/cons are and the circumstances in which their used. In the meantime parking your money in a Target Date fund is a fine option that's intended to be a relatively safe "one stop shop".

iiluvvvvu2

I would still only keep a 6 month emergency fund in the HYSA and put all of the house fund into T-Bills. Once you’re close to buying the house, then move the money back to the HYSA so it’s easily accessible. HYSAs are earning ~4.25% while T-Bills are earning ~5.3% and the interest is not taxed at state and local levels. Since you’re buying a house in 5-6 years, you could scrap crypto, gold, and the brokerage with individual stocks. Although I would still put a very small % into all of them. Everything else would stay the same. If you see the house you’d be buying being very expensive, then consider not maxing out the 401(k) and IRA, but ideally I’d max them out if possible. So summarizing: - 401(k) and Roth/Traditional IRA maxed out every year and invested in ETFs or Mutual Funds - 6 month emergency fund in HYSA - Spending money plus some cushion in checking account - House fund in T-Bills - Small % in individual stocks, crypto, and gold Again, not an FA but just what I would do.

thatcsguy5

We'd like to buy a home in 5 to 6 years and we don't know where our "final place" will be (my wife's job post-graduate school can only be in a certain number of cities/areas, so in theory it will be one of them). Thus we're saving up to buy a house in what could either be a LCOL all the way to a HCOL area in the US. Does that change your advice at all? Or should I still not put so much in the HYSA? Thank you!

thatcsguy5

We'd like to buy a home in 5 to 6 years and we don't know where our "final place" will be (my wife's job post-graduate school can only be in a certain number of cities/areas, so in theory it will be one of them). Thus we're saving up to buy a house in what could either be a LCOL all the way to a HCOL area in the US. Does that change your advice at all? Or should I still not put so much in the HYSA? Thank you!

thatcsguy5

We'd like to buy a home in 5 to 6 years and we don't know where our "final place" will be (my wife's job post-graduate school can only be in a certain number of cities/areas, so in theory it will be one of them). Thus we're saving up to buy a house in what could either be a LCOL all the way to a HCOL area in the US. Does that change your advice at all? Or should I still not put so much in the HYSA? Thank you!

thatcsguy5

We'd like to buy a home in 5 to 6 years and we don't know where our "final place" will be (my wife's job post-graduate school can only be in a certain number of cities/areas, so in theory it will be one of them). Thus we're saving up to buy a house in what could either be a LCOL all the way to a HCOL area in the US. Does that change your advice at all? Or should I still not put so much in the HYSA? Thank you!

Popeholden

i feel like for 90% of people the advice is too simple for your industry to help them. Spend less than you make, invest in target-date index funds for retirement, with anything additional over tax-advantaged retirement savings allocate it for a specific goal (HYSA) or invest in total stock market index funds. Everything almost everyone needs to know can be summarized on one side of a sheet of paper. If any one I know wanted to talk to a financial advisor I would tell them their situation is not complicated enough to warrant it. That's because I don't know any wealthy people. If you have any clients that aren't wealthy and you're doing more than handing them a piece of paper, and charging them for it, they're being scammed.

Adam_in_Philly

I worked in the health insurance industry for years and your HSA account is one of the best retirement accounts you can have (so long as you actually move the funds to investment - I have mine in an S&P 500 fund). It goes in tax free, it grows tax free, and the withdrawals are tax free (your medical bills will increase during retirement). Many people make the huge mistake of going with high premium plans when they’re young and healthy. They like paying nothing when they go get their annual checkup while shelling out hundreds a month in premiums. The much better way to go is to get a high deductible plan with low premiums and set aside enough money in a HYSA to cover your out of pocket max (the maximum amount you could possibly pay in a given year) and pay your medical bills in cash. Then, pour as much money as you can into the HSA account and make sure it’s invested for the long term. Your older self will thank you.

RyanStonepeak

$3k a month times 12 months a year equals $36k a year that you would need for income to "break even", not including taxes. At this income, you would be taxed ~12% federally and ~5% from state (though state rate may vary, I just used my state for this calculation). We'll round up to 20% total to keep the math simple. Multiply $36k by 1.2 to get just over $43k. Assuming you can get 5% interest a year from CD's, HYSA, Money Markets, or another similar instrument, we take $43k divided by 0.05 to get $860k. This is the amount that you would need to break even if you spend $3k a month. Now, because of some of the estimates I made, you may need more or less. I didn't take compounding interest applied monthly into account (makes you need less), and I obviously didn't adjust for your individual state tax rate (could go either way). I took your $3k a month at face value, and didn't factor in any emergencies or large recurring expenses like car/appliance/home repair (these would make you need more). Lastly, I chose to hypothetically put your money in risk free investments, but you would actually want a good portion of it in higher yield securities (which would make you need less, but be riskier). Hope this all helps.

Fit_Paper_8825

what’s a HYSA?!

justin_zander

Sure, but that's not what was said in the comment above mine, was it? They said "HYSA". HYSA (High Yield Savings Account) is 100% cash, and when you keep your money in USD, you have 100% exposure to USD and currency risk.

30vanquish

Not financial advice but an opinion. Move 100k from the HYSA to fidelity or Schwab. Add 50k VOO (s&p 500 fund) and 50k SCHD (dividend stocks). Leave it and it should grow.

BiggyFluff

Sometimes choices made for peace of mind are the best. I have 100k in HYSA sidelines ready to invest when major crash occurs. I'm missing gains now but it provides peace of mind.

darkciti

Exactly. OP take $25k, stick it in a HYSA and forget about it. Take the $5k you had from before and see how you do. That is the only way to stay ahead.

iiluvvvvu2

I’m no FA but I manage my own finances…my thoughts if I were in your shoes: - Max out your 401(k) every year - Look into contributing to an IRA or Roth IRA (double check income limits and restrictions on having these plus a 401(k)) - Leave a 6 month emergency fund in the Ally HYSA and put the rest into T-Bills using the Treasury Direct website (you get higher rates than HYSAs, it’s considered the safest investment since you’re basically lending money to the US government, and the interest is not taxed at the state or local level while your interest from HYSA is). - Make sure your 401(k) is being invested into ETFs or Mutual Funds and not just sitting around. Or at the very least is in a money market account earning over 5% - If you want to take on additional risk (for potential additional reward): I’d open a brokerage to buy individual stocks and buy some crypto (I wouldn’t go more than 3-5% of net worth here). - I’d also have a small % of net worth in gold. That’s my two cents. You’re in a great spot!

StackOwOFlow

if you want to gamble, do it with house money on HYSA interest

spellbadgrammargood

fine.. i'll do the reasonable thing and put 15k into a HYSA and play with the other 5k

the_stupid_investor

My HYSA for my emergency fund is 5.21

PsychologicalTaro398

HYSA

Baked_potato123

Make sure that you are maxing out Roth accounts to avoid taxation as much as possible. After that, I would say JEPI/Q, HYSA, CD's and chill.

mspe1960

You cannot count on getting 5% in a MM or HYSA forever. And even if you could, you living expenses will go up over time and your income will not. If you will still be working, why are you fixated on living off the the $1MM? Invest the money in a normal slightly conservative fashion. Maybe 50% in stocks (half US half EU since you are living in Europe) and half bonds in a fund like BND. Your total balance will vary over time, but long term it will be up. And just the dividend form a fund like this should be close to $3K a month anyway, but with opportunity for long term growth.

AnxietyIsTerrible_

At least put in a HYSA.

RjoTTU-bio

Long term? Broad market index funds. Short term? Cash, HYSA, money market, bonds. Anything else is risky and/or speculative. Good luck 👍

EnterTheKumite

Intels at the same price it was in 2014. They don’t dominate shit, TSMC dominates foundry. Worst case for your money is you vastly underperform not only the market, but fixed interest and inflation which could have been averted had you just clicked the buy button on VOO or the transfer button from your bank account into a 4.6% yield HYSA. But instead you’re trying to justify this shit investment. Probably time to get off reddit and hire a financial advisor.

orangehorton

If its for a house why would you put it into the market, you can't lose money in HYSA

DeepHistory

1. We are racing toward a climate apocalypse, and it is every person's ethical duty to slow that down as much as possible (not to mention being in the interest of their own survival). Political action is the most important part of this, but individual choices have enormous impact as well. I vet my investments with [Fossil Free Funds](https://fossilfreefunds.org/) among other avenues of research. 2 & 3. see above 4. Of course profits matter, that's the point of investing, but I would take a 6% return on a solar company over a 8% return on an oil company any day of the week. As a concrete example, I could probably get 4.5% on your average HYSA, but I choose to keep my savings / emergency funds in [Atmos Financial](https://www.joinatmos.com/invite/trees-for-the-future?ref=u-kbuhb065ego2x08vlwrze5-y). It only gives me 3.5%, but I sleep well knowing that 100% of my deposits there are going toward renewable energy projects.

JahMusicMan

I'm slowing down the pace of my after tax investments( still adding when I see fit aka timing the market), and stocking up with more cash in tbills/HYSA. Cutting back expenses as much as I can expenses. Not worrying if it's going to come or not. Nothing you can really do except be prepared and have your emergency funds and some cash on hand to take advantage of a drop.

StumbleMyMirth

Yes but I-Bonds are pegged to CPI - which we all know is a nonsense metric that's massaged and manipulated to paint a picture (this statement is apolitical, it's a truth that transcends all parties). The real inflation people actual experience paying for the goods and services they routinely purchase is significantly higher, and will vary depending on the person and the types of things they buy and invest in. (It's a "vector" not a "scalar" as one might say). I-Bonds are a good start, sort of a better HYSA for emergency savings.

Buckwiild22

Max out Roth IRA contributions yearly. If your employer offers a 401k with a match, contribute at least enough to meet their match. Keep the 70k in a HYSA (high-yield savings account as an emergency fund). Invest as much as you're able to part with in a total stock market ETF such as VTI. You should be able to do all of this while also living a fun and fulfilled (but reasonable) life all at the same time. Enjoy!

Stock-Transition-343

Build a HYSA emergency fin(6months) max Roth IRA and max 401k if possible. Save for a home if don’t already have one, enjoy life take a few vacations invest in index funds and pick some favorite stocks and invest into them as well

pacific_crick

Finally some good advice to this question. Saving for retirement at 18 is great but not nearly as important as getting a good education that allows a solid wage the rest of your life. The more you learn (usually) the more you will earn. I laughed at people suggesting a roth fund to an 18 year old who is going to school soon. I'm sure a roth will be great when you need to pay tuition and for books and have to pay a penalty to withdraw funds. OP should put his money in a HYSA or money market fund with really good returns right now to have it available to spend on their education.

pacific_crick

The advice I would give is to focus on your education first. Education allow you to earn more and therefore save more towards retirement. In your case I would put it in a high yield savings account or perhaps bonds. You want that money to grow to allow you to pay for books and tuition in the near future. If you really wanted to be aggressive and were willing to risk some of your capital looking at putting half your money in an index fund like FXAIX or VTI but know that it is possible that your investment can go down (or up) short term. If you put your money in a HYSA you would net about $1400 at current interest rates.

jimmygains

I'm 25 and officially debt free (!!!). I make $78,000 a year pre-tax living in New England which obviously doesn't get you too far, but I am contributing 12% to a 401k and get a company match at 4%. 401k sitting at about $16,000. I have about $1,200 in bitcoin, $500 in a brokerage, and I have federal bonds from my grandfather that will be worth around $5,000 at maturity. In the next 5 years there are 3 major things I need to financially plan for: 1: I will need a new car. I have a beauty 2004 Lexus, but it has over 200k miles. It still runs fine, and I will be driving it into the ground, but I want to be prepared to buy something for cash when it kicks the bucket. 2: Wedding. I have been dating my girlfriend for a few years, and we are currently living together and things are smooth. I'd like to be able to buy a decent ring, do a honeymoon, etc. (I have zero clue how much a ring costs. Any thoughts there?) 3: I'd like to buy a house. Rates are nutso right now, but I'm hoping this doesn't last forever... I'm looking for some sense of direction. I know I should be doing more than 12% to retirement, but I also feel like I need to start saving some liquid cash in an HYSA as an emergency fund for the car, etc. Any thoughts or guidance would be much appreciated. I feel like there are a million things I should be putting money towards, but the money isn't rolling in fast enough to do it all at once.

Careful-Rent5779

If you're down to $18, thinking some trade is going to rescue this will only result in losing the remaining $18. But its $18 WTF find a yolo trade. When thats gone, open a HYSA.

henrytbpovid

That all sounds reasonable enough but I wouldn’t worry too much about retirement until you’re debt-free. You urgently need to pay down a loan that will grow ever-larger. I wouldn’t advise locking too big a portion of your earnings away in an account that you’ll have limited access to — even at that handsome salary. So, I would pay down the loan as aggressively as possible, and put everything else in a HYSA and a diversified automated stock portfolio. You can open both of those on Wealthfront.

Skidwagg

Hey Discover offers 4.35% APY HYSA🤷 aint a bad gig if you ask me

x2manypips

HYSA gang

Good_Intention_4255

I would sell. You are looking at $26,400 annual return on $700,000+ in equity. You could do that well investing the proceeds after capital gains taxes in a HYSA with minimal risk.

techguy1337

I started at 30, 33 now, and am very close to entering the 6 figure category. The first 100k is the hardest. The rest gets way easier because of compounding. So if you go hard into it now. There is no reason you will not retire happily. Focus blue chip or etf's like VOO. A diversified portfolio is best. Stocks, bonds, CD's, HYSA, precious metals, collectibles, real estate, etc. Throw in some risk into it as well. I like crypto. Very high volatility but also insane returns. BTC is the safer bet out of everything. My biggest recommendation is set it, invest it, and forget it. If you get scared because the market is spiraling down and sell. That person always ends up broke. The guys who held strong during the great depression, didn't sell, and kept buying became some of the richest people on the planet.

TheyCallMeBubbleBoyy

At a very minimum ensure your money is in a HYSA with 5% interest. Then look into some safe indexes like VOO SPY etc

lilbuhmp

I highly recommend you read about the boglehead method of investing. IE a three fund portfolio. Wikipedia breaks it down for you. Head on over to r/bogleheads if you’d like advice regarding it. Just go ahead and get started by opening a Roth IRA (assuming you can) with fidelity, vanguard, or Schwab. I’d also recommend r/money The idea and order of operations, at least to get started, tends to be 3/6 months cost of living in savings in a HYSA Max 401k matching Contribute max to Roth

Slow_And_Ready

I'm able to connect all my accounts to my main bank account to see totals. It will total up my HYSA, 401k, roth IRA, cc balance, and give me a big picture look at my money. It's not a perfect solution to what you are asking, but could help you see the different accounts in one consolidated place.

g_vfx_art

Hi! Newb here, 36 y/o. Having trouble understanding something about "dividend growth %".Hypothetically, let's say my Roth IRA is $2m when I retire. Rather than just spending that money, maybe I want to live off the money it can generate.I can put it in a HYSA at 4-5%, and be happy with the interest gained off that.But what if I start building a separate brokerage account now - say SCHD or some other dividend fund - will the "dividend growth rate" push the money earned per year well over 4-5% by the time I retire in 30 years? Thanks!

Already_Retired

With the one year, assuming non callable meaning the bank can’t just cancel it if rates drop, you are locking in the rate for the year. The benefit being you are guaranteed that rate for forgoing access to the money. Month to month rates will likely drop within the next 12 months. CD rates and HYSA rates will drop quickly when they do.

TheYoungLung

I would put a good chuck in a HYSA but it’s always good to leave some money sitting in checking

goinggoingimgone

I’ve been using Titan (titan dot com) for a few years and happy with their mix of investment options and HYSA. Happy to share a referral link if anyone is interested.

Srnkanator

$300K in a HYSA, and don't touch it.

oldirishfart

This is only for Marcus Invest. The Marcus HYSA savings account isn’t part of the sale to Betterment.

shiftyone1

So they’re doing away with their HYSA account? I currently make 5.5% on my account

Alec_NonServiam

I do the same in Fidelity but only because I want to separate my HYSA (invested in USFR) from my brokerage that already contains some percentage of USFR. You can't do "buckets" of shares so I opened a second brokerage.

McKoijion

You get a 1% deposit match on all Robinhood taxable account deposits and 3% on IRAs/401ks. The funny thing about Robinhood is that their HYSA has a 5% rate and the main bank they use is Goldman Sachs. Goldman has been giving Robinhood users a higher rate than Marcus users.

Minions89

Same with my HYSA is with them. I didn't get notifications.

changinginthebigsky

does this apply to their HYSA accounts as well?

Pension2options

Tl;dr: "right tool for the right job" 1-- I'm currently laddering 17-wk T-bills. T-bills are marginable for my PUT options selling, and I used to chase CD's and HYSA, but with laddering T-bills I can pretty much accomplish the same without opening/closing accounts. 2-- I have $20K so far in I-bonds, likely another $10K this week (gotta do some research on the May reset). I-bonds are meant for keeping up (and sometimes exceeding) inflation. Comparing T-bills to I-bonds is like comparing apples to oranges. Basically, know the purpose of a product and move accordingly. gl

iNfANTcOMA

It's not that gold is going up. It's that your dollar is going down. Gold is boring. You will have better returns in a HYSA

middwestt

Right but fed will only drop rates 25 BP for the first drop. That won’t lower HYSA to under 4.3. Agreed it is an abnormal time and I never thoughts I’d see bank rates this high ever in my working days but I just don’t see them dropping enough over 1 year to warrant keeping money illiquid at a lower rate with I bonds. Next year or more likely 2026? Maybe it would be worth it then.

lufisraccoon

I Bonds are going currently 1.3% *fixed* rate - CPI is on top of that. So if CPI is 3%, the I Bond will earn 4.3%. That 1.3% is set for 30 years. The HYSA rate will change the moment the Fed changes overnight rates. Having short term rates above inflation is a historical abnormality.

middwestt

Why would I lock up money for a year at 1.1% when HYSA right now is 5.5% and the Fed keeps pushing back when they will reduce rates this year and the max would only be 75 basis points over three cuts and even that is a huge question mark. I just don’t see the benefit.

rammerjammin

I don’t usually keep money in treasuries. Just using SGOV as a HYSA since it has higher yields and is exempt from state and local taxes. I’ll move the money to an all equity ETF soonish hopefully.

saynotopain

Change 15% direct deposit from SnP500 to 5% HYSA

BobLemmo

Here’s another question I have. I mean I was earning close to $500 on interest monthly with all my cash in a HYSA. I’m assuming long term this ETF is better right? Kind of got me thinking if HYSA was still producing great returns if I should stick with that over ETF Stocks 🤷

AlphadeltaThirteen

To preface all of this: I (25M) work for a federal agency where I’m not allowed to invest in the stock of banks or their holding companies. I have roughly $18,000 invested in personal retirement accounts (about $8000 in trad IRA and $10,000 in a Roth IRA). I make $78,000 a year and I’m about to get a 10% raise, plus another 8% in 2024 and another 18% or so in 2025. I don’t have any debts. I have a Roth 401k that I contribute 5% each paycheck to, and the same for the federal TSP. Both are matched by my employer, for a total of 20% of my salary to employer sponsored accounts. Both are invested entirely in target date funds where the managers adjust my allocations into more bonds and conservative investments as I age. This gives me some exposure to less risky investments without violating my company’s rules about investing in banks. I have about $6000 in a HYSA and $10,000 in a separate emergency fund. With all that out of the way: I’ve invested my IRA and Roth IRA entirely into QQQ. I also found out about QQQM recently, so I’ve been investing into that to take advantage of the lower fees and plan to continue using QQQM going forward. I have two primary questions: 1. Is it safe and sustainable to invest into QQQM as my DCA retirement vehicle? I know people say to invest in VOO, dollar cost average, and forget about it entirely, but I can’t hold VOO because it has several bank stocks in it. 2. If the answer to my first question is no, is there an ETF anyone can recommend that tracks VOO, or a similar broader index, but with no financials? (I know QQQ has financials in PYPL, so those kind are fine, but no banks or companies that own banks) I essentially just want something to passively and mindlessly invest in that tracks the broad market but that won’t get me in trouble with my boss. Any tips would be greatly appreciated. Thanks everyone!

LaCroix586

Put it all in stocks. Fuck T-Bills and HYSA. You're not needing the money for a few years, so invest it all.

SnooWoofers8000

Mom won 500k wants to retire My mom is going to be getting $500k from a lawsuit soon and wants to retire within the next 5-7 years. I’m trying to get help her be smart with her money and grow it so she is set for retirement. We took the first steps of maxing out Roth and 401k for the year and years to come. Still sitting on a lot of cash, my thoughts is to put a good portion aside in a HYSA and the rest in a brokerage account. Looking for thoughts on how much to put in each bucket, and suggested investments? Background: Age: 55 Salary: $100,000 401k: 160,000 Roth IRA: 15,000 Debt free House paid off

wobikanenobi

Sadly since I’m not from the US, (forgot to mention that in the original post) I can’t open a HYSA that matches 5.25%, not even close swh

Vivecs954

SGOV and USFR are the HYSA etf equivalents that give you more interest. I wouldn’t go for anything more aggressive than that because you might lose money over 2-3 years with anything more aggressive.

notahoppybeerfan

Cash out and what? Park the money in a HYSA where it can melt from inflation?

IntroductionDue8191

Well, this is exactly what happened to me too. I actually tried to be safe after the first baller gains but towards the end made the most riskiest trades in desperation. By God's grace, I didn't lose more than I made. I think I'll go back to trading with small amounts forever and always move out winnings in a HYSA or ETF, if I'm back some day that is.

2buckchuck2

You realize that HYSA rates are variable right. Check what they were 3 years ago.

joco456

Any reason you wouldn’t lock up right now? I’m concerned with a HYSA that the rate could drop drastically while I’m out of it!

facforlife

Are there lots of boomers with lots of money in the stock market? That'd be stupid. I figure if you have enough money to invest you have enough money and sense to know one of the basics of age and investing, you cycle out into more stable fucking investments the older you get. Bonds, HYSA, shit like that.

E_coli42

Which HYSA gives 5.25%? I was using cap1 which was like 4.5% but moved everything to robinhood

Prestigious_Way_738

Do a HYSA or money market right now. Stocks are going down rest of year. Collect that risk free 5%.

joco456

Oh jeez I’m sorry to hear you’ve had severe complications, would be interested to speak privately about your situation if you’re open to it. I had an auto stem cell transplant this time last year and as you said I was totally out of it that’s why I’m asking what to do as I fell out of remission and am now looking at doing a donor transplant next in may. I won’t need the money any time soon but just want to earn without worrying about checking it every day. I’m not opposed to T Bills but the CD or a HYSA seem like a better option

KReddit934

I would not lock up any cash right now...either HYSA or treasuries at a brokerage. Flexibility is a plus.

not_pineapples

What's a good approach to invest a lump sum? For the last few years, I've been DCAing an amount weekly that worked for my personal situation when I first got started. But now, a few raises/promotions at work and some personal situations later, I'm sitting on more in my savings account than I'd like to be. I've got a low to medium risk tolerance so some fluctuations are fine, but large losses are not. What's a good way to approach this situation? Current portfolio is just SPY and a handful of index funds in the industries I have the most knowledge in. My ideas are: HYSA, increase my weekly amount to shift the balance from savings to investing over the period of a few years, find some other completely different investment method to diversify with, or some combination of the 3. I really like DCAing into index funds because it's so simple and produces pretty steady results. Something similar would be ideal-- requiring not too much thinking or monitoring, low cost and low maintenance effort. My next financial goal is buying a house, so liquidity is great but realistically I wont be needing the money for the next 3-7 years. Not so much looking for advice in specific stocks, index funds, etc. Just more generally, what's a safe way to transfer a lump sum from savings into investing without needing to time the market?

bostonfan148

What’s the pros of BINC vs a HYSA that’s paying ~5% these days? Won’t BINC fluctuate with interest rates as well? 

iFonzie

You should try reading a book on money/investing. The one I normally suggest for beginners is "Simple Path to wealth". As a college Student you should have access for free to a Library that may have a copy. [Simple Path to Wealth](https://youtu.be/uvcAjWxk_oE?si=TGIYLhKQNE6z-eQV) If you have time to listen to the AudioBook for free. [Short Summary](https://youtu.be/Pvy59cogpG8?si=qG0-3I3jrtyU_90h) If you don't want to commit the time Outside of that you can think of a HYSA as a savings account that pays you more interest for leaving your money in there. There are often different rules around a HYSA based off the bank holding the money. Putting money into a Roth IRA at your age is great, make sure you're also using that money to buy stocks, and not just letting it sit in a Cash Account. 401Ks are another great resource for saving for retirement.

RatherOakyAfterbirth

You’re paying a fee to get a 5% interest rate when you could pay nothing and get 5.25%+ in a HYSA. 

LoveTrashTv_

I have a pension at my work (I’m vested with 19 years - private industry job, not government or a school) and I just invest like it doesn’t exist. I still max out my 401k annually. I also save to my HYSA. I also live like Social security won’t exist. I just focus on saving what I can that’s within my control and still allows me to live - like I’m not starving myself to save. So I would say basically do what you’re able to do comfortably within reason and don’t get so hung up on the %. But I might be a dummy too.

ThirstGoblin

I’m leaving 15k in HYSA for emergency, 5k in checking. And we have zero debt.

IceOmen

Gambled once, lost, then gambled again and lost. If you truly don’t see what went wrong then I agree with the top comment of liquidating and going back to a HYSA before you triple down on the gamble.