Reddit Posts
What is the best way to invest 300k without significant risks?
What should I do with the money I have and what are the next steps in my financial journey?
What should I do with the money I have and what are the next steps in my financial journey?
Experience with Private Alternative Funds and P2P?
Assuming interest rates will come down in the 2024/2025 time frame
How do I convince my wife that she is keeping too much in HYSA?
HYSA Or REIT not sure which one is the better option. Please see description below.
I have an infant and two year old and want to take the family on some sort of awesome vacation when they are old enough to appreciate it, say 7 and 9. Would creating a brokerage account for a specific ~6 year goal make sense?
What to do with $300,000 just sitting in my checking account?
I feel like I’m leaving so much money on the table. Talk some sense into me.
Choosing between a CD or HYSA to allocate 15% of investments..
Thoughts on 31yo investment portfolio - big pay raise next year and questions
Is it worth holding money or paying off an auto loan?
Short term investment/ saving options to financially support parents
Maxed Roth IRA 2024.... invest or save money held for 2025 Roth IRA?
What "asset class" has the lowest IQ investors?
Where to invest 10k leveraged from CC cash advance (5% fee)?
400K investing advice with keeping it safe as only condition
Any HYSAs that are still offering 4.5-5.5% APY other than Marcus?
I have 60K sitting in my bank account and my salary is 60K. HYSA vs ETF vs ??
Reinvesting $30k in HYSA - are T-Bills my best option?
Reinvesting $30k from HYSA - are T-Bills the best low-risk option?
Looking into CDs, but I need an explanation on if I am understanding this correctly
Can a non-guardian set up a savings/brokerage/HYSA account for minor?
Possible opportunity of a lifetime that I'd like an opinion on.
42M - Seeking Insight on My Investment Strategy
British expat living in the US. Thoughts on my investing and saving strategy
Is my retirement outlook reasonable or is this out of sight?
Starting first "real" job after graduation soon and plan on maxing my Roth IRA Contributions and enough to get my employer's 401k match yearly. I'm looking at possibly buying a house around next spring and am contemplating whether to do something safer like a HYSA or throw it in index funds/etfs.
I am afraid to stop contributing towards my investments to build 6 month emergency fund because of my portfolio manager
British expat in the UK, want to run my logic past some 3rd party people
Where should invest $125,000 as a 25 year old in 2024?
Back in 12/31/1999, I was short YHOO.......then this happened
Back in 12/31/1999, I was short YHOO.......then this happened
Where to park money for a down payment for about 1-1.5 years?
SPAXX (MMF) vs Marcus by Goldman Sachs (HYSA) Which one should I use?
Investing When Young is Always Suggested, But How Do We Know Market Will Be Strong in The Future?
Dump in large amount or slowly add into holdings?
What are your views on moving out of cash investments and into bonds, etc. at this point in time?
Investing advice for moving around 100k into ETFs
Schwab vs E-Trade vs SoFi vs Robinhood for Trading Stock
Is maxing out my Roth IRA towards the end of this year worth it?
One Year Rolling “Escrow” Investment Strategy Feedback
Max out 401k, pay off debts or keep in HYSA for down payment on a house?
How to DCA a large sum of cash? How long is too long to space it out?
If you were gifted $50,000, how would you divide it up between S&P500 and HYSA?
If you were gifted $50,000, how would you divide it up between S&P500 and HYSA?
SGOV a good place to hold cash for liquidity?
Mentions
Yes - it can be appropriate to use a brokerage account to generate cash yield instead of a savings account. That's what I do since it's more flexible than a savings account. And it can generate a higher risk-free yield than a HYSA. Also - money market fund generates distributions which are treated as ordinary income interest. But in some cases can be more tax efficient. Like all brokers, you get a 1099-B and 1099-DIV form to do your taxes. A money market fund like Vanguard cash settlement federal money market fund will also hold some percentage in US government obligations which are state tax exempt - it can vary each year. For tax year 2023 - it was 49.37%. Vanguard and other similar investment managers will publish the percentage for their funds each year - the Vanguard version is here - [https://investor.vanguard.com/content/dam/retail/publicsite/en/documents/taxes/usgoin-2024.pdf](https://investor.vanguard.com/content/dam/retail/publicsite/en/documents/taxes/usgoin-2024.pdf) For more information on money market funds - see the FAQ here - [https://www.reddit.com/r/investing/wiki/faq/#wiki\_what\_is\_a\_money\_market\_fund\_and\_how\_safe\_are\_they.3F](https://www.reddit.com/r/investing/wiki/faq/#wiki_what_is_a_money_market_fund_and_how_safe_are_they.3F)
put $15k in a HYSA in case anything comes up medically, put the other $5k in TSM, either direction, because it’s guaranteed to take your money
Is the goal to preserve the wealth, have it grow some, have it grow a lot? If you want to be extra conservative You could put it in a HYSA or money market fund to get 4.5-5%. At 4.5% your dad would get $3,750 per month. You could put some in cash mentioned above and then put some of the money in an S&P 500 or total stock market index to conserve some of that money and have some of it grow. Putting it in
Safe? Split it to 4 banks (fdic insurance covers 250k) and park it in HYSA or CDs You’ll get about 5% guaranteed The ETFs & S&P is better for growth but you’ll get decent returns these days with guaranteed money
You don’t have to apologize. We are a supportive community. Keep $2k in a HYSA. Put $5K into VOO dollar cost average so $1k a month. And put $1k into SCHD over 5 months, and finally $1 into QQQ over 5 months. Use a broker that allows fractional shares like Fidelity. Do not dividend reinvest. Instead use everything from SCHD and rollover into VOO.
Keep at least $100k in bonds or a HYSA - based on your numbers, that's enough that they can wait out 2 years of market turbulence without having to sell at a major loss. Depending on risk appetite, the rest can go into the S&P, but it's also fine to do 60/40 or 70/30 with bonds.
Standard Blueprint: [blueprint](https://imgur.com/lSoUQr2) 1a. 3-6 month Emergency Fund HYSA 1b. 401K deducted from your paycheck automatically ($23,000 limit for 2024) 3. IRA ($7000 limit for 2024) Traditional means pay taxes later or pay taxes now (ROTH) 4. HSA - if applicable, 2024 limit: $4150 for single, $8300 for family 5. Individual Brokerage Account: ie Vanguard ETFs- VTI, VOO, VTSAX, VUG, SPY (r/bogleheads) or other ETFs JEPI 5a. Stocks or bonds or Crypto 6. Real Estate 5 and 6 can be in parallel or switched.
Money market fund. It has generally the same level of liquidity of an HYSA but with higher APY.
You can transfer money from a HYSA to your local bank if you actually want to go in person, it takes 1-2 days. Not sure if that is really something anyone needs now though.
I think a HYSA is more convenient and accessible than OP realizes.
If your local bank is offering a solid rate, I see no reason not to go with that as you are more comfortable with it. Otherwise, I’d just suggest a HYSA at an online bank.
Money Market Funds offer slightly higher returns than a HYSA, at slightly higher risks (loss of FDIC insurance). In practice, some people can make strong arguments that the daily-loans and 1-week loans found in typical MMFs (like VMFXX) are safer than HYSAs (which behind the scenes may invest into riskier assets, like mortgages in practice). I use SWVXX, because TD Ameritrade / Schwab prevents trading of any other MMF on their brokerage. Still, SWVXX works fine (5.2% right now)
I keep mine in an HYSA with no issues. If you're fine with missing the gains and let inflation eat away the value by all means, just store it in a normal savings. MMF in a broker will have a similar turnaround time as an HYSA with online banks so no point considering that either.
You can get a better rate in a HYSA right now, with less risk on capital.
Over 40, employed, no significant debt. I have over $70k in a traditional Chase savings account earning little to no interest. I'd like to move the bulk of that into either a Money Market Fund (like VUSXX) or a High Yield savings account (like AMEX). This is money I intend to save/grow long term - I don't plan on touching it anytime soon. Just FYI, I plan on keeping some money in that traditional savings - it's where my checks are deposited and I frequently transfer to/from that account to checking, etc. I'll keep 3-6 months worth of expenses readily available. In addition to this account, I already have a traditional IRA, as well as a separate Chase brokerage account where I've invested primarily in VTI. I've heard pros and cons for both options (HYSA are "Safer," MM have a higher yield, etc), so I'm just trying to get more input. Sadly, Chase does not offer a HYSA, but I have a 20+ year credit card relationship with AMEX, and I've been considering theirs if I go that route. If I choose the money market, I can stay with Chase entirely. Thoughts?
Money market or high yield savings account. 5%+ in a HYSA with zero risk much better than you can expect in the S&P right now. Remember the old adage “Sell in May and Go Away”
Staying put saves you the most money of course. You’re paying less than $200/mo in interest, which is crazy cheap rent. This gives you the opportunity to save lots of excess income (with historically HYSA returns too), so you can take your time and keep your powder dry for your next house. No hurry, you have a good thing going. When you do buy your next house, consider the following: - Selling your old house lets you put $150k in home equity toward your new (more expensive) mortgage. That’s $150k you’re NOT paying 7-8% interest on. (Unless you’re paying cash for your new house, but I assume that’s not the case.) - The $89k loan at 2.5% is very nice, but it is still a cost. - Being a landlord is a job. Do you want it? So… probably sell, unless you’re paying mostly cash for your new home and/or you’re starving for more income and relish the idea of being a landlord.
Money market. HYSA. Nothing else!
$500k in an HYSA for 2 years is going to generate nearly $50k.
HYSA SoFi @ 4.6% Or Wealthfront @ 5.0%+
T bills are returning quite well for shorter terms, better than HYSA. And no state tax on the income. Downside is a bit less liquidity, but doesn’t sound like you need it to be.
My Story - Bought put on shit company SNAP After it jumped 30% and crossed 15$ it's now 16$ god knows Bought AMAZON AT 180 excellent results- not moving at all Bought IBKR AT 9 - started falling Bought OUST AT 9 - STARTED FALLING Bought SPY Put 500 - not touching 500 and JPow Meeting also gave shock Alresdy lost on NKLA not going now even to 1 What's wrong not a single trade moving to give any benefit Lesson - put money in HYSA Aand come back in June after SPY AT 480
HYSA. 5+% make $1,500 a month while you wait
VUSXX, TFLO or for a HYSA, I have been using CIT.
Agreed. It's a rare scenario to be in, though I found myself there in my bumpy trading journey. High taxable income companied with more capital loss than I'll be able to carry over for my expected life thanks to a former advisor who was a Cathy Woods fanboy. It's better to ensure I burn though all of that carryover in addition to normal losses incurred in annual trading. Kind of silly, I know. It's not a serious strategy for the average person who can use it as a HYSA or otherwise a simple place to park cash not in use, but still highly liquid. With even modest enough quantities traded (25-50k+), it starts to make a small difference in taxes. Since we're all here for an edge, near risk free tax optimization is part of the game.
I get 5.13% in my [Brillant HYSA](https://www.brilliant.bank/saving/) account.
Since you need the money within 3 weeks, put it in a HYSA. Then you can have a presentation about how putting money in the market with a three week horizon is kind of insane.
my favorite regards dont have a HYSA but buy 0dte
Don’t forget Uncle Sam is gonna want his cut come April, you may wanna just delete the app and put that shit in a HYSA or a bunch of CDs
Invest 60% into real estate. Put 40% down so 300k down for $750k purchase price. Set aside 75k for closing costs/emergency fund. Take the cash flows, and invest 70% into stocks. Keep 30% aside in a bank. $750k worth of RE should be able to produce atleast $15k worth of cash flows. Refinance when rates drop. Cash out refinance in 2-4 years and buy more RE. Repeat the process above. Now you are left with $125k. $40k should go to VOO DCA. $35k should go to individual stocks. $25K into underperforming lump sum with price target to sell profits and roll over into VOO lump sum. Remaining $10k into individual stocks with a strong future. Think Amazon. Choose 3 companies and fractional share DCA over 6 months. $40k into HYSA.
Today feels like the day I sell all of my stocks and put my money in HYSA. Tired of investing in risky volatile tickers like VOO and losing my money every single day
If you go the HYSA route at least make treasury ladders and get the extra .4% and state tax exemption (if you have state taxes)
it’s a SPAC… there’s a reason they were trying to pull people in with top of the market HYSA.
Again, all your assumptions are wrong. Inflation may push earnings in certain sectors and industries higher, but not across all sectors. Even in sectors which are positively affected by higher inflation, that only translates into earnings growth if consumers continue to buy their products and services. Consumers are still buying those products and services, which is bullish. We are seeing organic growth across several industries, far exceeding inflation in many cases. We have also seen real wage increases, which takes a lot of the sting out of inflation. Not to mention, inflation is down massively since 2 years ago, so your thesis only makes sense if we get a huge reacceleration of inflation. Profits are much higher in several sectors and industries. You don't just get profit increases across the board. Some sectors and industries will do better than others, and some companies will do better than others within any particular industry or sector. Your last comment makes no sense. When inflation is dangerously high and bonds, money market accounts, and HYSA pay a lot of interest as they do now, people generally flee from stocks to those safer investment opportunities. The fact that the stock market has been going up since late 2023 reflects a general sentiment that inflation is coming under control and the risk/reward favors stocks over those "safer" investments.
Any bank with CD rate at 5% or higher. HYSA probably already yields 4-5% but of course has the advantage of being able to use it freely.
Use short-term treasuries if you live in a high-tax hellhole like NY or CA. They pay as much as the HYSA, but you don’t have to pay state income tax on interest received from the federal government. You can sell whenever you need the cash or wait until maturity
First off I’d say the 8 months of expenses in a HYSA is probably pretty high especially considering you have 2 months in your checking and are actively employed. There’s no magic number but that’s a lot of cash sitting on the sidelines for something you will likely never need to use. But you’ll have to do your own risk assessment there. Also unpopular opinion but I don’t think you should focus on maxing your retirement accounts. And this isn’t just you but people in general. Retirement isn’t the only thing to save and invest for. A new car, down payment on a house, a wedding, child’s education, even just having another safety net to pull from. I contribute to my employer match but then put the rest in a brokerage account.
+2%. -2%. +1%. -2% Shits getting old…. Just raise rates gawdammit ! I want HYSA at 6%.
Robinhood’s 5% HYSA is FDIC-insured to 2.25 million per account. I’ve been using them for around a year now and haven’t run into any issues. Most recently (January) I withdrew $25k for a trip. I had the money within the week and zero problems. Although be aware they charge a five dollar a month fee for Robin Hood gold, so if you won’t be making more than that an interest each month, you should look into a different option.
I’ve been using RobinHood as my HYSA (5% APR) for the last year while I figure out a better long-term solution. FDIC-insured to 2.25 million via cash sweeps, and I’ve had zero issues withdrawing amounts as needed (most recently 25k for a trip).
Alright. I put in a lot of my play money this money into RKLB. Got ~20 shares. Long term. Next, I put a little more in KULR. looking to hit above 70 cents, short term of summer long term EoY Lastly, watching GDHG but I don't really know what else to look out for ATM, just been pushing my dividend stocks and HYSA. GLHF everyone!
Also don't forget HYSA, park that money up there to have at least gains.
Easiest - HYSA, FDIC insured. More tax efficient (no state tax) - T-bills, treasury fund or etf like VUSXX, SGOV.
HYSA - but if you really want to squeeze every dollar look at the bonuses here and see if the opportunity costs (5.5% APR via Wealthfront) is worth it. For instance the chase 900$ bonus is pretty good but the Wells Fargo $2500 is worse than putting it in the 5.5% account https://www.doctorofcredit.com/best-bank-account-bonuses/
BOXX etf. Yields at about 5.5% similar risk to treasuries and 60% gains are taxed as long term. Equivalent post tax is in HYSA or money markets is over 6%.
We were in a similar position and wanted to share a reminder / something we learned in case it helps - Don’t forget you have to pay TAXES on the interest you’re earning from a HYSA 😆learned that the hard way when we filed our taxes this year
Why pay your house down when your rate is lower than what you can earn in interest in a HYSA?
<1 year and state with income taxes? T-bills (exempt). <1 year and no state tax? Probably still t-bills due to yield, but HYSA/money-market if easier (lower rate). >1 year and modest/no state tax? Buy BOXX. Return will be similar to t-bills but you'll get no distributions and can just pay long-term cap-gains when you sell.
Yeah. It's in a HYSA right now. It's a crap shoot. We would love to buy something now but there's NO inventory. The market is so stale.
33% online HYSA 33% 6 month CD 33% 12 month CD
I'd say an HYSA, CD, or treasury bills if your timeline is within the next 5 years.
HYSA, Synchrony has a decent one. Should get you $700+ a month until you purchase.
Don’t think it has any extra services. But they marketed well. Got a ton of people to refinance with their student loans. A lot of those same people opened up HYSA with them. Their average consumer has a credit rating of 733 so they picked up a lot of high rating consumers. I imagine a lot of these people who have student loans with them, opened up bank accounts, will then likely pick up a mortgage with them. This is what happened to me lol. I like their product and I think others are happy with them too.
IMO all those points sound pretty reasonable. It really just comes down to opportunity cost. I don't have specific experience with the home remodeling or potential business funds, but I think most people would split those accounts out separately from their "emergency savings", as they're not emergencies. So maybe start slowing building up funds for those purposes. Still fine to keep in HYSA of course, but probably shouldn't be included in that total for emergencies. The dream goal is to make your money work for you -- to make you more money with your money, of course. Historically the best place for that has been in the stock market. But we know the future is never guaranteed, so with that being said.. Especially with rates as high as they are currently, 4-5% free interest is nothing to scoff at. The past decade we were lucky to get 0.1%. So the trade off is really just are you okay with potentially missing out on 7-10% average annual returns from the stock market (potentially twice as much returns)? But if you have 401k, IRAs, and/or individual accounts rolling already then you're not missing out on too much. If not, I would definitely start looking into getting those situated appropriately for your current situation. Context: I'm only 26 and a random on reddit, so take what I say with a grain of salt, but I already can't imagine working till 60 like the norm so doing everything possible in my power to build up every nest possible to get outta the rat race. Definitely not a financial advisor but enjoy anything investment related. Hopefully something was useful :)
Don’t put it into VTI or VOO if that’s your timeframe. If you want your money readily available you can either keep it in a HYSA or. Money Market Fund. You can also use bulletshares ETFs to create a bond ladder. Those are funds with maturity dates. For example you can take 10k and put it in the fund that matures in 2024, 10k in 2025, 10k in 2026. You can then keep contributing and set the interest to reinvesting. When the 2024 fund matures, divide it among the other two funds, etc. If you’re gonna do this or somebody similar, or buy CDs, keep 6 months of expenses in a HYSA or money market funds as an emergency fund.
What is a good ~5 year investment strategy to fund a down payment of a home? In the US, I’m currently 25 with $35,700 saved in a HYSA earning 4.6%. $15,000 of that is my emergency fund. Is 5 years long enough where I would likely see positive returns in the stock market? Should I look to create a portfolio focused on bonds, or are bonds unlikely to out earn the current HYSA rates? Should I look into CDs closer to when I’m ready to buy? Additionally, the 5 years is a soft deadline. I could likely wait longer if I want/need to.
Pretty standard flow of accounts in priority order: 6-12mo emergency fund in HYSA, typically. More is fine, but 250k sounds a bit on the high end for sure but idk your situations. 401k company match, at the least. The more the merrier, if your 401k plan has good options. HSA, if applicable Roth/Trad IRA (can backdoor roth ira if over income limit -- think it's like 160k ish currently) Individual investment account Take a vacation every now and then, don't forget to enjoy life :)
I used to do something similar but not 0dtes. I'd do 2-3 weeks and try and catch 2-3% swings. My biggest mistake was not setting money aside from my profits. I lost everything and then some after 50-60% gains probably 10 times. I recently started again, and my biggest advice is to set aside at least half of your profits everytime. Put them in a HYSA or buy shares of SPY. That way, when it goes wrong, and it will, you can't lose it all
If you are saving for a house, then I would put it all into a HYSA until you reach your goal. If you don't need to touch that money, you could do a CD ladder with the funds over the next year, but I don't see rates going down right now.
Why all HYSA? take some of the money and invest long term in index funds like the s&p. You can have "gambling" money while also investing long term.
Leave money in savings and watch inflation eat it away like moths. It's unusually to have %5 HYSA like we do now. We may have them for another year or so, but even that's not enough to not lose money. Nothing will make you rich that doesn't entail risk. At this point work on your skills, increasing them, being better in the workplace, earning more money. 20s and 30s are hump busting time. And if you do that, things will be really nice in your 40s.
What is the benefit of investing it in spaxx when HYSA is paying 5%?
I think that’s too much personally for an emergency fund. If you’re planning on a big expense then it might be appropriate. The most striking thing is that if you have 250k of cash, you really need to be paying attention to the best rate. I would set aside money you might need *immediately* in a HYSA, you can get HYSA at around 5%. This would be stuff like urgent home repairs, medical insurance out of pocket maximums, stuff like that. The rest, the portion of the emergency fund that’s funds that you might need available over a few months, open an account with TreasuryDirect and do rolling 4-week treasuries. Those are yielding 5.3-5.4% and they are state tax exempt. PLUS, you don’t need to worry about default risk as much. There’s no such thing as FDIC insurance limits for treasuries, because you are directly holding debt from the US Treasury. Whether it’s 20k or 250k or 500k, you don’t need to worry about splitting it up to stay under FDIC limits.
If you want true simplicity, you can take a target date fund set for 2025. It is a conservative asset blend of domestic and international equities plus a large portion of bonds. You could then withdraw from that. For example, ignoring your other assets, the IRAs alone can sustain double your current goal of an addition $2000 a month. If your IRAs were invested in a TDF (any horizon, the later the year on the target date fund, the more stock exposure it has. It will have higher returns but higher volatility) you could withdraw ~4,400 a month with a high degree of safety that you could sustain that consumption rate from the IRA portfolio for at least 30 years. This assumes 1.32 million at a withdrawal rate of 4% of its present value ($52,800 a year or 4,400 a month), and then adjust that value for inflation every year. Next year (if inflation is 3.5%), you would withdraw $4,554 after I flatiron adjusting by a multiple of 1.035. You have a lot going on, it may be worth it to sit down with a flat, one time check, fee fiduciary financial planner. Not a wealth manager, just someone who can help you parse out your assets and make sure you're *not being too conservative*. You have a lot of assets and can sustain a healthy retirement. Retirees like you can actually end up spending too little and forfeit higher quality of life (especially earlier in retirement when you're healthier and can do more activities). You can likely increase your spending and simultaneously leave a bequest. Or, you can start gift giving to elevate the lives of friends and family. Or you can go on some baller vacations. Side notes: You're holding waaaay too much cash, at least make sure that is in a HYSA, or better yet a money market fund. You have enough money that you don't need outsized exposure to riskier assets like equities to sustain future spending, but still. Too much cash decreases your portfolio longevity. The company stock is a sticky issue, it would be best if possible to divest from that as soon as possible tor educe your idiosyncratic risks as a couple and reallocate that money to diversified funds.
I am not sure what you are quite asking , there are ultra short term bond ETFs like SGOV (and others) that will return basically the same as short term 0-3 month treasuries currently its yeilding about 5.3% what will probably be better then most HYSA but remember this follows short term interest rates, if rates fall so will the interest generated by the fund
If you’ll need the money for college or expenses in a year use a HYSA or but tbills or a related ETF (sgov, usfr, etc). If starting as a long term investment, start a Roth IRA at 18 as somebody else said. But the money in an S&P 500 ETF (VOO). Find a place where you can buy fractional shares. Keep adding. You’ll get amazing compounding over time
High Yield Savings Account (HYSA)
HYSA. Open a Roth IRA when you turn 18.
You say you want it liquid and then list a 100% stock allocation. If this is cash you may need (eg for a house, emergency, etc), and a short-term market loss could hurt your plans, you should put most of it in a HYSA instead. Savings rates are quite good these days. But if this is a long term investment (10+ years) and you can afford the risk, then yes, just dump it all in the market at once. DCA means less time in the market and lower average returns.
just a quick reaction but if you said to your parents, "hey, i've got X in the bank right now. if you open a brokerage account under your name and put X in it i'll pick the investments like i would with my money and we can track how they perform together. i'll continue to save my money, but i'll also get investment experience in a safe way, and if i do well you'll end up making money, too." so then by the time you go to college you'll have a fat stack of saved cash (which hopefully you've been sticking in a HYSA) and you'll be the family investment professional. then you can open your own brokerage account and invest how you like.
I have 20k just sitting in HYSA. I feel like this money can be put to good use instead of just rotting in there. What should I do with it? I have another savings account already with $ for emergencies. Context:24 years old
Congrats! This question gets asked a lot, and you need to ask yourself first what is most important to you, and what your financial goals are. Investing it all into ETFs can be a great or awful decision based on your situation. I believe the order of precedence for me is as follows: 1. 100 dollars large bank chequing account 2. 250 dollars in large bank savings account 3. 6 month emergency fund in a HYSA (AMEX offers 4.3 percent. Unlimited withdraw and deposit. Express withdraw free and typically takes 24 hours) 4. pay off high interest loans 5. invest into Roth IRA (you can put your etfs here) 6. pay off low interest loans (can be interchangeable with number 5 depending on loan situation) 7. 401K 8. taxable stock account If you have a feeling you'll invest 5K into the market, and withdraw it in the next 5 years, I don't suggest putting into into stocks. It needs time to grow.
The danger of asking these questions on this subreddit is that most people here aren't very smart. You ask any individual here about investing advice they will tell you put it all into S&P 500 and call it a day. The best way for you to assess your financial situation with your trust is basically figure out the following: * Are you going to need any chunk of that money in the next 5 or so years? (Thinking of a house down payment, other big necessary purchases) - if yes what % of your portfolio are you going to need. Stock market could go ass up in the next 5 years and statistically it has almost always been better off regardless of dips after 10 years of holding. * The rest that you do not need you can probably keep where it is or move to another diversified mutual fund. **At the most basic level: ** Stocks give the best long term returns, but are a crapshoot in a 5 - 10 year period. If you have to sell during that period you may lose l. Bonds, HYSA, are less likely to give good returns but also much more stable. If you're investing money for that 5 year period these are the less risky places to have them and still earn some. I have money I'm holding on to for a house sitting in HYSA and Bonds myself
Fidelity SPAXX is my HYSA and I have many TBills ladders. Fuck banks
1. VOO vs VTI. Whether you invest in VOO or VTI doesn't really matter long term. I think stats show the returns of investing in one or the other is negligible. So it doesn't matter whether you do one or the other. I do VOO, and my wife does VTI. In 15-20 years, Maybe one of us will have a 3 percent higher return. 2. Time frame. It really depends on your objective. We all have expenses, things to pay for, and etc. I personally will only take money out of stocks if I want to buy property or retire. This is why I have about 30 percent of my money in a HYSA (currently at 4.3% from Amex) and 70 percent investments. I like having the security of immediate money in a HYSA that also provides a 4.3% return, while trying to force myself to not withdraw from my investments. But the strategy is something that you want to tailor to according to your life's plans!
Bunch of my friends love their HYSA APY and joined up recently.
I don’t know availability where you live, but look into CDs in addition to the options that SamurottX called out. CDs typically provide a somewhat higher interest rate than a HYSA at the cost of locking up your money for a period of time. At least in the US, bank-issued CDs have no risk of loss either.
HYSA, bonds, and money market funds are your only real options. Anything else has a chance of losing money in such a short time span, and it's not worth the risk for just a few extra percent earnings.
Got you thanks for your reply! I’m just reluctant because idk if I should just keep it in HYSA rn and wait for the election to make a choice in investing in the market
Do you know if chase offers HYSA options?
Take responsibility for your own money. If you don't know what you're doing, put it in SPAXX with Fidelity or some HYSA (high yield savings account) and let it compound until you do know what you're doing. If you're set on investing in the stock market. Choose an index fund like VOO or growth fund like VUG.
Put your money into a HYSA first. Once you build up 3 months of emergency fund, you can look at investment options. Do you have any retirement accounts?
I’ll differ from the advice in other replies. I wouldn’t do VOO based on your circumstances. 1. I would set aside enough cash for college in 529’s in essentially cash investments, or in I Bonds (which allow tax free use for education expenses). If going I Bonds, you’re limited to $10k each between you and your wife and it’s either another $5k each or $5k total via your tax refund (so you can just overpay April 14 to buy the extra I Bonds). The limit is per year. There are some nuances with I Bonds, so you can just go 529 to keep it simple. 2. You may very well be at this point, but have an honest equivalent of 3-6 months of expenses in an emergency fund. If you are going to put that money anywhere other than a HYSA or checking account, do it in Money Market Accounts, Money Market Funds, or short term Treasuries (like 1 month or so to prevent interest rate risk exposure). You can slowly put money into I Bonds, but since you can’t withdraw I Bonds for 12 months, make sure you have enough liquidity to cover 3-6 months of expenses while waiting on the I Bonds to reach 12 months. 3. Buy a Target Date Retirement Fund. It adjusts for risk automatically as you get closer to retirement. VOO or other S&P500 following mutual funds are going to be higher risk than appropriate or desired in your situation, unless you only do them as a portion of your portfolio and buy bonds and the like for the rest. Target Date Funds just make it simple. If you aren’t familiar with the “order of operations” for where to put retirement money, it’s as follows: 1. 401(k) match 2. HSA (though payroll so you can save on FICA taxes) 3. IRA / ROTH IRA 4. Maxed out 401(k) 5. Regular brokerage account Steps 3 and 4 are so close to each other priority wise they can be swapped depending on your situation. 401(k) can be withdrawn from as early as the age of 55 if it’s the 401(k) from your last employer when you retire, so there’s more flexibility for early retirement, but you may not have as good a selection of investments. Ideally, at retirement you’ll want your money in a mix of 401(k)/IRA/HSA, Roth IRA/401(k), and Brokerage accounts (called the 3 Bucket Strategy). The Brokerage account you can withdraw from whenever you want, and can bridge between when you retire and when you can withdraw from other accounts. The other 2 buckets (Roth and non-Roth) allow you to essentially choose your tax bracket.
I second the comments that say bonds/HYSA. current rates are so unusual high, you can get up to 5% return pretty much risk free. with an ETF you may be up or down, more risk and uncertainity
Any index fund is a long term investment.. and less than 10k won’t give that much returns .. better to look at HYSA when interest rates are high .. interest rate reduction seems less likely this year
If your bank offers a decent HYSA then I would have some of your paycheck direct deposited into it. Most 401k offered a money market fund but then you have expense ratios and its not really worth it after that.
My wife and I (early 50's) live in the USA. We are debt free (aside from our house, which has approximately 50% equity). We have most of our portfolio in our 401k's, company RSUs, HSA and HYSA (5%). I guess we're trying to catch some lightning in a bottle, looking for high upside, with accompanying high risk with a small gamble. We're looking at investing $1000 -- could be 2 stocks, $500 each. I know this isn't significant money for most, but it's an amount that if we lose it all we won't be too upset with our attempt. Anyway, we're looking at things like Rivian (big upside/risk), Nvidia, Tesla, AMD, SOXX... Other options are less risky, like Meta, Microsoft, Palo Alto Network, VOO/VTV/VNQ...
Nah, disagree. It is flashy and filled with addictive shit because *it's a gambling app. It's litterary designed to make you gamble and lose*. So no, it's not a good broker app because it's built to encourage you to do bad things and discourage you from doing good things. It's like a HYSA locked away in a mobile casino, utterly dumb. And the fact they push optimisation in your face without any form of basic check just goes to show how utterly incompetent the apps is. It *looks good* sure. But that's it. When it comes to actual *Information* or risk/reward analysis or anything related to sensible trading...the classic apps are a mile ahead. After all, they want you to trade...not be an endorphin addicted candy crush Karen
Repeating what others have said mostly but adding extra steps: Max Roth IRA -> pay off debts -> start putting money into Treasury bonds ladder (similar yields as HYSA but extra tax benefits) -> build a non-tax-advantaged investment account -> start saving for a house even if it's 5+ years away (this can be added to the Treasury bonds)
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.
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)?
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)?