HYSA

OdiesBalls

1. I set my 401k contributions so I will hit the annual contribution limit ($24,500 in 2026) by the last pay period of the year. 2. I try to hit my Roth IRA annual contribution limit ($7,500 in 2026) by June-July by depositing \~$1k/mo into that. 3. Pay off ALL my bills for the month so there's no CC interest accruing, while keeping enough in my checking acct to cover any automatic deductions like my electric bill or bi-annual car insurance payment. 4. Dump everything else into my taxable brokerage account, which is currently invested in 3 ETFs: VOO for growth (\~75%), SCHD for dividends (\~20%), & VXUS for international exposure (\~5%). I think I currently have too much in SCHD, so going forward I will only contribute to VOO & VXUS until I'm about 75/10/15. I'm in my mid 40's, so in another \~10 years I will switch more to Income rather than Growth ETFs. I'm not too concerned being 100% into ETFs currently, as I have a couple years worth of living expenses in a HYSA that I can depend on if the market tanks or I lose my job for a period of time. Also - I'm no expert. There's probably a better way to invest, but this is just what I've been doing for the past few years.

Bobbybobinsonbob

I bought bitcoin in 2022 averaged around 28k, sold at 95k, put that money in a HYSA for a year, a month ago I yolo’d that money into NBIS, lol, now I’m down more now than if I had just held bitcoin. I’m probably just gonna go back to bitcoin in the fall to catch the 4 year cycle train again

WallStreetThreats_

I could have legitimately just left all my money in a HYSA with a dwindling rate from this time last year to today and made more money

BearyYawny

High risk: Majority of portfolio in individual stock pickings and sector-specific or thematic ETFs like MAGS. You can gain or lose considerable percentage of your investments on any given day. Moderate risk: Well-diversified ETFs. Unlikely to move up or down quickly but may see major movements during global events like Covid or the start of the current Iranian war. Low risk: Majority of money in cash, HYSA, MMFs, bonds, and the like. Comparatively lower returns and may not beat inflation. Ask yourself if you're a betting man. If the goal is simply to grow your wealth and have enough for retirement as opposed to getting rich, there is no need to play individual stocks. There are lots of winners and losers in this game and nobody knows which side they'll end up on.

BoltyMcSpeedy

I put 17% into my 401k + 3% employer match I have weekly auto deposits of about $135 that go into my Roth IRA on Robinhood. Whatever the math is to hit the max by Feb. There I have 2 tiers of holdings. Tier 1 is my backbone, and I have about 12.5% of my portfolio each in 4 stocks. I have another 10 or so making up the remainder. Those are between 4.5 and 7% depending in performance. I balance things out from time to time and it's usually the smaller positions I'll trade with. I have a taxable account as well that gets $65 weekly, also on RH. This just holds VTI and QQQ Lastly I have a RH checking/savings account and 1k from each monthly paycheck goes there into HYSA to give me liquidity in case of emergency. Once that hits 50k that 1k will instead go to my taxable brokerage Edit: I guess I'm a RH stan. It's also one of my smaller IRA holdings

GuwopGOAT

KORU is considered a HYSA in Korea

sharp315

no - paying off any loan with a 2.875% rate is criminal. If you simply put the cash in a money market fund or HYSA you will come out ahead. even if you have a psychological aversion to debt you should never pay that down early.

sharp315

no - paying off any loan with a 2.875% rate is criminal. If you simply put the cash in a money market fund or HYSA you will come out ahead. even if you have a psychological aversion to debt you should never pay that down early.

jerm2z

Panels 1-6 are for a HYSA. But just panel 1 is a WSB member’s account that does not see the other panels.

rbnprd

I think I'm just gonna stick to the HYSA until the next preseident

jetpilot6969

This is the correct answer. A down payment for a house that is going to be purchased in the near term should be in HYSA or bond ETF.

OrdinaryMix4013

if we lower the rates to -10% like taco says, does that mean my HYSA will pay me 20%?

Ok-Acanthisitta9247

A HYSA would be a better investment vehicle than the stock market this year

RagnarokWolves

1) Any super quick success stories are done with plays that are akin to gambling. People have lost their bank accounts on these types of plays. 2) We recommend investing in index funds. You're not gonna wake up and see your portfolio increased 10x overnight, but put in the time and in a few decades your $2M portfolio will be returning an annualized $200k a year. 3) TBH I'd keep your house savings in a HYSA (or SGOV to avoid state taxes). Investing is great and pays off in the long run, but in the short run ANYTHING can happen. Look up how long it took for the S&P 500 to see progress after the dot com crash of the 2000s. That entire decade is known as the lost decade. But anyone who stayed investing during that period would have seen an insane surge from 2010-present. Investing is long-term.

0201037464793921170

Oh what will this week’s excuse be? Let me guess… “Investors are spooked ahead of this week’s fed decision” - just get a HYSA 😂😂

Substantial_Team6751

Why are you limiting yourself to an HYSA?

mspe1960

When you have lost a job, that is exactly the time you keep as much cash on hand as you can to cover a possible long time to find work again. On top of the fact that your mortgage rate is lower than you are earning in the HYSA, there is absolutely no valid reason to pay it off now.

Business_Goat8171

Fair point, there is some nuance. I'm not saying everyone with a large emergency fund needs a HYSA. I'm just saying some people value simplicity and easy access more than squeezing out every bit of extra return. It all depends on the person, their goals, and their situation.

SirGlass

I am saying there might be some nuance here. If you are starting out and 24 years old and have a 5k emergency fund absolutely keep it in a HYSA. If you are 40 and have 6 months of salary saved as an emergency fund meaning you may have 80k+ as an emergency fund there is zero reason that amount needs to be instantly available.

mr_stupid_face

Brosef you are probably young since you live at home and only work part time. You have one advantage and it is you have time on your side. Make sure to build more on your old man pile with some index ETFs such as SCHX, schf, sche,scha.DCA into them robotically. The exit for old man port is never (goal to hand over to kids and use in retirement) therefore when you can have an open line of credit and/or funds in HYSA so you are never forced to sell Your degen pile can hold your options and inverse/leveraged ETFs but should be way smaller than old man pile. Single stocks can exist in your old man port or degen port but should not make up a big portion if in old man port

PerformanceDouble924

If $20k is all your $, as opposed to just your investment money, selling it and putting it in a HYSA to have a safety fund and starting fresh later isn't the worst idea.

dasunt

That's like telling a gambler to put next month's rent in a HYSA until it's needed instead of bringing it to the horse racing track.

Glass_Performer1174

SGOV etc are SIPC covered which is as good as FDIC. The assets are covered if the brokerage goes down and you'll still own the assets. Unless you are saying that SIPC won't cover you if the federal government can't make good on treasuries? Which I guess is true but if that happens then your HYSA is equally in jeapardy and we all have much bigger fish to fry because we're all cooked at that point.

Business_Goat8171

Those are great too, but I don't think everyone should ditch a HYSA for emergency cash. because here are the trade offs- \- an emergency fund needs instant access. selling an ETF during market hours or waiting for settlement takes days. If you need the money immediately at an unexpected time, youre cooked. \-HYSAs are FDIC insured. MMFs and ETFs have coverage for brokerage failure, but the assets itself aren't protected. \-Also, you don't need to deal with bank games. Just choose a good bank or credit union that doesn't use those promotional bait and switch tricks. T bills, etfs and MMFs are great too, but I feel like HYSAs are the most convenient in cases of an emergency.

bobdevnul

3400-1300-300=1800 of take home left after those expenses. What about other expenses - food, clothing, car gas, car maintenance, insurances, phone bill, vacations, etc.? Do you need a budget to understand how much disposable income you have to save for the down payment? The answer to that is yes. Saving for goals of less than ten years is best done in fixed income investments - HYSA, broker money market fund, short term bond fund. Right now you can expect to earn about a 4% yield on those. Using the 1800 a month disposable income (which is unrealistic) and 4% yield that could grow to $117K in five years. It is highly unlikely that you actually have 1800 a month to invest. To get to $40K in five years with 4% growth you need to save/invest about $625 a month. You actually need somewhat more than that because you will have to pay income tax on the income from the investment. $625 a month saved probably isn't unrealistic if you live frugally, but not miserly, with mindful spending on needs, not wants. $40K is 20% of a $200K home purchase. Are there homes in your area in that price range? There are not in many areas. Look into home prices. Understand what your disposable income is or could be. Use a compound growth calculator to understand how monthly savings will accumulate with growth. [https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) Also understand that as a homeowner you will be responsible for all maintenance. The mortgage payment will include property tax and home insurance. Everything else is on you. A roof or HVAC replacement needs to be taken care of right now. Those can easily be $15K each when they happen. You will need to be able to save for home maintenance in addition to the mortgage payment. Good luck

thetaFAANG

pretty awesome dude! so you've been carrying forward capital losses all this time and so the first $500k is tax free for you? cash that out! and like at least 100k more! do X months of emergency savings, get a couple CDs just to flex on your banks and get better relationships with them (or HYSA), do a maximum 'after tax' contribution to your 401k plan, its like $72,000 and just keep using salary to populate your moon bag account, you ran up $15k once, do it again

do-you-know-the-way9

Sell. NOW! Be happy. Keeping it any longer is gambling. Do something safe, even if its as low as parking it in a HYSA or S&P500. You are set for life if smart.

SirGlass

I would go one step further ; ditch a HYSA and just hold your emergency fund or long term savings on a money market mutual fund or something like vbil/sgov even hysa banks play games, in theory a "good" HYSA will pay somewhere around the fed funds rate or short term interest rate. However banks play games, they will offer an introductory rate that then falls under the fed funds rates Or maybe they will have their HYSA match the fed funds rate today, but in 1 year it will start to diverge. If the fed fund rate goes up they may not raise their rates Just use a money market mutual fund or something like VBIL/SGOV , you will always get basically the short term interest rate. No games , no offering good rates then dropping them. They will essentially always track the fed funds rate minus a small expense ratio And added benefit VBIL/SGOV is state tax exempt, a treasury money market fund will be as well but not all money market funds only hold treasuries

mr_stupid_face

You have time on your hands. For the love of baby Jesus just DCA robotically into an index fund(s)such as SCHDX. It’s boring and slow but you will be way better of for it if you learn/keep that discipline. Long term you will probably be way better off financially too. I am not saying don’t be a degen, but limit being a degen to a smaller isolated pile. Work on your old man pile first then when you have enough to lose and you know how to be disciplined then start a degen pile. For future: Also make sure to have enough in HYSA and/or in a line of credit to never be forced to sell from your old man pile.

allirxse955

I used to be in the same boat as you, constantly scared to put money in the market because of the “what-ifs”. Every month I’d look at my savings funds and research stocks for hours looking for the next “big hit.” I’d open my brokerage account to buy, get scared, and instantly put it all in my HYSA instead. The way I got over this was forcing myself to invest. I’m not sure how much money you’re ready to invest, but for me $50 a week felt like enough to get my feet wet comfortably. I set it up to instantly withdraw every Monday to my broker, and each Monday I put $50 in either VTI, VWO, or VEA (75% of the time it goes to VTI, the other 25% it goes VWO/ VEA.) I went from being scared to invest to having $400 in my broker in less than two months, because once I started the recurring purchases, suddenly it was no longer scary to put an extra $50+ in one of those funds every now and then. Tl;dr - set up recurring deposits and pick a basic broad market fund to invest in and forget about it. Once you get your money in the market, you’ll feel more comfortable putting more in. Best of luck to you!

edoceo

Check out the sub called Personal Finance. They will tell you the steps are basically: staring with HYSA -- High Yield Savings for the close-to-you-liquid-assets. And then pick your favourite broker and purchase some VOO, VT, VTI which are vanguard index funds. Stuff your money and your grandfathers money in there and then let it mature.

Bitter-Refuse-8623

I would just say it's important to set some to the side and keep it in mind it's coming so have it prepared. Easy enough to throw 20% gains to the side in a HYSA and just grow it over time adding more in than quarterly payments

pritikina

That is a lot of pressure. Considering his age and your admitted lack of knowledge you should keep things conservative. To keep things simple and easy I would suggest to open brokerage account (Fidelity, Schwab, Vanguard) and invest the money if their respective S&P 500 index fund or total market fund. You could also move the money to a HYSA or a CD until you've had some more time to research it. Best of luck to you and your grandpa!

exphx23

The issue to me is that too many people follow narratives and talking points promulgated by individuals and end up making sub optimum investments. They react to the fearmongering, which keeps them from truly being successful. Most novice investors think they know investing, because they react to headlines and corporate marketing. I can buy a stock, or a HYSA based on what I've heard, that makes me an informed investor. That's like saying, since the light goes on when I flip the switch, I understand the properties of electricity. There are so many quality investments available that people overlook.

buttershdude

Should be conservative because he is already at retirement age. The first rung would be an HYSA or something like Fidelity's CMA (Cash Management Account) where his money would at least keep up with inflation. Then, bonds or CD's. If he really wants to mess with stocks, at least avoid individual stocks and invest in a stable mutual fund that, say, contains a stock he is interested in. Spread the risk.

HaiKarate

Is the money in an HYSA or MM savings account? If not, you've been losing money by not getting the most interest you could be getting. The interest rate on a normal savings account is trash.

brianxhopkins

For the average person, this is spot on. I would like to add: 1) when investing into the roth, for the love of god don't let the money sit in the money market account. That's why OP said put it in VT. Money market account is pretty fancy way for saying HYSA, so make sure to move it to an index fund (VTI/VT/VOO/etc). 2) if you're young enough, check what your 401k money is going to. Usually they set it up automatically to deposit into a lifecycle fund depending on when your projected retirement date is. I would look into the breakdown of that lifecycle fund and maybe consider switching to a stock fund that tracks the S+P. At a young age, you don't really need the diversification (bonds) yet.

zonk84

Empower used to be a lot better - but I agree it's become less useful. Fidelity's "FullView" - I notice one of your accounts is with Fidelity - isn't bad. It doesn't tend to do much with the discreet holdings in non-Fidelity accounts, but does at least track them and does let you incorporate balances/contributions for the planning options. But -- it does synch my non-Fidelity accounts (Wealthfront taxable brokerage + HYSA + Roth IRA; Chase checking + savings; Cap1 CC + MM; mortgage + CCs) pretty well without issue. It take a bit of time to set-up to use optimally -- i.e., you have to flag/allocate accounts to purpose -- but it's probably my most robust "Personal Finance Tracker".

lolyeahsure

HYSA

swishkabobbin

Why would you need help with money just because you have more of it in your account? It's more, but not any more complex. An advisor *might* make sense when you have a business or 2, a pension coming, a few homes in different states, a 401k, 403B, significant after tax pension, HSA, HYSA...you get the idea. But at that point what tou actually need is just a decent tax advisor

RagnarokWolves

You should have a 3-6 month emergency fund that is kept in a HYSA. Stocks should not be your "I need money on a Saturday night" funds.

OkSuccotash5330

Do you recommend a HYSA?

OkSuccotash5330

Thank you. I wish it was more but I’m proud of myself of actually earning that much. I wish I knew more about finances and investing. I think I need to start with a HYSA for sure.

OkSuccotash5330

Until I understand investing, would you recommend moving it to SoFi for their HYSA? Thank you!

keiye

How is that different from a HYSA?

BarefootMarauder

I recommend you start with the very basics and educate yourself before investing money into things you don't understand... Check out the wiki/prime directive in r/personalfinance. Then pick up a couple books, like "I Will Teach You to Be Rich" by Ramit Sethi, and "The Simple Path to Wealth" by JL Collins. Both of these guys are awesome. Ramit has lots of videos on YouTube and he has a mini-series on Netflix. JL has a free stock series on his website too which is excellent reading, and he's been interviewed on multiple podcasts if you search his name. As a mom responsible for 4 little ones, I would also recommend you figure out what your total living expenses are for at least one year, and keep that much set aside in safe "cash equivalents" such as a HYSA, a good money-market fund at a broker, or in an ETF like SGOV. This is your "emergency fund." If the 100K isn't currently earning at least 3.25% or more, get it moved immediately to somewhere that is at least keeping pace with inflation until you decide how/where to invest it. And that *should* be low-cost total market index funds at a reputable brokerage like Fidelity, Schwab, or Vanguard.

flyingtiger188

Any investing comes with inherent risks of loss. Some are infintesimal like US debt (eg SGOV which will be roughly similar returns to a HYSA) while others can be very high (long term holding of triple leveraged funds like TQQQ). Understand that the market has good days and bad days, and even good years and bad years but on the whole will increase over time. As long as your risk isn't too high (yolo 100% into a risky business) and your timeline is long enough to smooth out the ups and downs you will come out ahead. You mentioned that you have young children, have you considered 529s to help save some money for their education?

FlimsyPriority751

Honestly, go to Google Gemini AI. Explain your situation and your goals, and have it explain step by step what to do and to guide you with clarifying questions if needed. It will clearly lay out what you need to do.  The essence of it is to set up HYSA, then invest in broad market index funds and never pull the money out, ever. 

planes01

Well you would want to establish a an emergency fund first. At least 3 months but I'd recommend 6 months. That could be in a HYSA (Hugh yield savings account) and CD ladder. The remainder that you ideally don't touch for 10+ years can go to the brokerage. Its just an account where you can buy things to invest. In this case you would use your money to be a fund called VOO that tracks all the major companies. You can think of it as owning a small piece of all the common names (Microsoft, apple, Amazon, etc). As all of those companies grow, so does your money. When you want to access that money you sell the fund (hopefully for higher than you bought it originally).

OkSuccotash5330

Is there someone they helps with getting all This started? How do I find a good HYSA? Thank you!

aethermar

Investing in general doesn't always work. Even if you buy the most boring-ass ETFs. If someone is that risk-adverse they should stick their money in an HYSA instead

AshamedImagination50

I miss when I used to put my money into HYSA. But I had fun…. I think

hplp

Re read the original post that started this thread. The dude said you need a minimum of 10m and that is ‘seven zeros, two commas” implying that a you need all that money. Therefore he offered a HYSA as a better solution. Somehow you’ve changed all of that context to try and make your point.

Moist-Guava-732

my stock pick of the day; # SMA monthly payer 5% yield positive EPS storage never going out of business this is basically like a HYSA with upside

BlueGreenTanager

On further thought, I see several issues: You want tax-free. But nothing is tax-free. The retirement plans you refer to are tax-*deferred*. They are absolutely not going to give you a tax-free account to save for a home purchase; at best it would be tax-deferred. So you would deduct your contributions to the account when you put the money in, and you would have to pay the tax on the money when you take it out. That works for retirement savings, because most people have lower income in retirement than when they're working, so they actually pay less in taxes. But when you're still in your working years, you might well be in a higher tax bracket when you take the money out to buy your house. Even if you're not in a higher bracket based on your income, the money you withdraw to buy the house could well push you into a higher bracket. So you would very possibly be worse off financially than if you just paid the tax when you earned the money. Let's say you're in the 24% bracket right now. You sock away $1k a month in a tax-deferred "house account." You deduct the total $12k/year from your income. You save 24% in income tax, or $2,880 each year. You do that every year for the next 8 years. Let's say in year 6 your income has increased and you're now in the 32% bracket. For years 6, 7, and 8 you save 32% in income tax on the $12k you're socking away annually, or $3,840. So in years 1-5 you saved $2,880 annually, and in years 6, 7, and 8 you saved $3,840 annually. That adds up to $25,920 you saved in income taxes. Then, in year 9, you take all that money out to buy a house. Your contributions alone are $96,000. Let's say the total value of your account is $130k. You're in the 32% tax bracket, so you pay $41,600 in additional income tax the year you take the money out. Net cost: $15,680 in additional income tax. Oops. That plan kind of went sideways, didn't it? Compare that to simply investing $12k a year — let's say in a regular non-tax-advantaged brokerage account. In year 9, your account is worth the same $130k. When you take it out to buy a house, the majority of that will be long-term capital gains, and you're very very likely to be in the 15% LTCG tax bracket. Short-term capital gains tax will be whatever your regular income tax bracket is. So the first 7 years will be LTCG at 15%, and the last year will be STCG at 32%. Roughly $110k will be taxed at 15% and roughly $10k will be taxed at 32%. That's $16,500 + $3,200, or $19,700. Instead of paying $41,600 in additional income tax (on your tax-deferred account), you would pay $19,700 in capital gains tax. So, no. Your idea doesn't sound particularly great. Then there are other issues, too: It's generally not considered smart to "invest in the stock market" the money that you're saving for a house purchase in the next few years. There could be a major dip in the market when you're ready to buy, or an extended bear market, and you would lose money if you cashed it in to buy a house. Savings for a house purchase are usually recommended to be in a HYSA, not an investment account. So there's that. Even if your house-buying account were actually tax-free, not just tax-deferred, you wouldn't save all that much. The median house price right now is a little under $400k. The average down payment is 10%, or $40k. If you save $8k a year in a HYSA, you would have that $40k (plus interest) in 5 years. Add some to that for closing costs, etc., and you should still be able to save enough to buy a house 6-10 years. That's really not long enough for tax-deferred (or even tax-free) investing to really make that much of a difference. When saving for retirement, your investment horizon is 30+ years, not 10. It's not likely to be more than a few thousand dollars that you could save in taxes if it were actually tax-free. But, as I noted above, it would at best be tax-deferred, and you would be worse off than if you just saved the money up.

Evatend

If we're being honest this guy probably has much more money then he has in his play money, its just insane he would do such a thing. The reality is he could passively earn more then enough on that money regardless if he did HYSA or take out 3% annually.

crazy_akes

The problem is when bubbles pop everything sinks. People are leveraged like all hell to the megs caps so when we get inevitable recession/depression it will roller coaster hard up and down for years before settling down 20-70% from the peak and it’ll take a lot of patience to get there. Along the way people will be tempted to buy a dip and see it scream up 20% quick and pile I only or get ravaged again and again by trying to time the top.  It is a very difficult time which is why WB and those with patience just sit out. Taking less risky assets just means less upside when the balloon deflates it takes the world down though. For that reason I’m 10% speculative meme stocks 40% large caps and 50% mega cap. Rose the upside cash out at stop losses and buy in at a pre determined up amount. Can’t time the bottom and honestly if you aren’t willing to buy in during then expecting further downside you might as well stay fully invested, which would be what I’d advise most to do all along if I wasn’t so bearish myself. The biggest rising days and weeks are usually during bear market. So for me personally I’m just enjoying the rise while my “cash” is in assets that still appreciate. Even a HYSA at least will keep up around d inflation, worst thing you can do is just sit with your cash losing value. My personal view is we see a Great Recession within a month to two years that lasts a few years taking us to ‘08 type declines. Doesn’t mean I’m betting options on this. Just riding the wave cautiously and as things get stopped out they sit…it’s okay to see the cash pile grow for a bit. And I dive back in if it hits 20/30/40% from ATH and worst case I always have some sort of cash sitting sidelines till the end of time. I’m contrarian and I don’t have all the answers. That’s okay, neither does WB. My cash sitting out can still be pulled to pay off debt if 0% balance transfers go away during recession or if I want to start side hustles and in those ways it’s put to good use.

kconfire

0DTEs? Yeah don't spend money on stocks anymore. HYSA is probably more suitable for you.

mr_stupid_face

Work on your old man port and just DCA into an index etf such as SCHX Timing is hard, frequent timing is harder. Plan on holding index ETF for ever. Have a line of credit available or HYSA account money to not be forced to sell. Slow and boring may make you happier Your degen pile should be fun and not bring you so much stress. (Well sometimes it should stress you out)

No-Improvement3164

IBM yield is 3.10% now. Same as HYSA with potential upside. 😂

DoinIt4DaShorteez

SGOV is such short term treasuries that it's basically a money market fund, and about 95%+ of the distribution amounts are state-tax free (depending on the state). He might be able to get a few basis points more in a HYSA, but there's nothing wrong with using SGOV for an emergency fund except that when you sell, it takes a business day to settle before you can take out the cash.

Diablojota

Dollarsavingsdirect is at 3.35%. Apple’s HYSA is at 3.4%. There’s no shortage of HYSA options over 3%.

InvestingNerd2020

" I will Teach you how to be rich" by Ramit Sethi. Excellent book. Brokers: Either Fidelity or Charles Schwab. Investing operations for those earning less than $153k per year (including bonuses): - Contribute to your 401k/403B plan pre-tax up to the employer match. Usually 3-6%. - Build up to 3 months worth of your routine monthly survival income in a high yield savings account (HYSA) or Treasury fund within a taxable brokerage account. Make sure it has 3% or higher interest. This will be emergency savings. - After building up emergency savings, then open a Roth Individual Retirement Account (Roth IRA). It offers tax free retirement gains. Invest 80% Total USA fund and 20% International. For Fidelity that would be FZROX and FZILX. For Schwab that would be SWTSX and SWISX.

abeBroham-Linkin

SP500=if your retirement horizon is 10+ years Everything else: HYSA/SGOV/Money Market/CD=whichever has the better rates and most convenient for you.

nupper84

You're trolling. FNSXX requires a minimum of $10 million. That's seven zeros. Two commas. For 12 months put it in a HYSA or SGOV if you live in a state with high taxes.

thefalcons5912

FNSXX has about a 3.67% to 3.88% interest rate. HYSA, you will be lucky to find anything much more than 3%.

UnlikelyPriority812

If you know when you’ll need it, you can toss it in a CD so you have a guaranteed rate. HYSA or mutual fund can shift. So really breaks down to your risk tolerance.

WhirlWindBoy7

HYSA can barely keep up with inflation now. Your personal risk tolerance should decide.

owenmills04

1-5 years : HYSA or MM (possibly state tax exempt) 5+ : index fund (maybe a little allocated to individual stocks if you want to put in the extra work)

Arteqt

2 to 10 years is very wide. Will you actually need the 20k in 10 years? I assume you would save so much more in 10 years to the point 20k won't make a difference for whatever expense you are going to have? Do you have any other savings? How much % is this for your total portfolio? Hard to answer without knowing anything. If you wanna stay safe go for VTV or BRK.B . HYSA or Bonds would be safer but thats just losing money to inflation at these rates.

leaning_on_a_wheel

2-10 years is a weird range. For 2 I’d definitely just keep it in HYSA, but for 10 the S&P no doubt

Odd-Flower2744

You can always do a portion in HYSA/short term bonds, etc and a portion into stocks. Generally I’d say biggest drawdown is like 40%. Given flexibility with time I’d say more like 25%. Find the max draw down you’re comfortable with keeping in mind the higher it is the more you can make. Ex if 12.5% is stomachable do 50% cash 50% stocks.

Inviction_

You're gonna have a tough time finding something really low risk with good returns. Stick with t bills or a HYSA

Shrimpf

1+ years: HYSA 5+ years; bonds 10+ years: ETF

Revolutionary-Rip670

so strategy now holding 3 BILLION in cash, skipped buying BTC again you regards are buying an overpriced HYSA

FortifiedNeuro

1. Sell 70% 2. Set aside 20% of that to a HYSA for your capital gains you’ll pay 3. Take $1,000 out in cash, go to a really nice dinner or treat yourself and your family/friends over the weekend 4. Put the rest in $VOO and CHILLLLLLLLLLL to retirement

West_Lavishness6689

i agree i cant time the market, but i also went from 8k in my account and a 160k loan on a condo in 2020 to now owning a 715k house mortgage free, 1.1 million in my investment portfolio ready to slowly deploy back into the market, another 500k in a 4% HYSA just hanging out making a few bucks on the sidelines. no student debt. two paid off cars. 2nd kid on the way. no credit card debt. i mean right now i am just taking a breath to realize how far i've come. and pause the "fomo" cuz right now i dont have any.

Various_Couple_764

SGOV is basically the same as a Money market fund or HYSA. I would rather deposit money into a high yeild fund like QQQI 13% yield. and turnoff dividend reinvestment and and led the dividned fill a money market account. build that up to 5 most of cash Anything more than 6 month would be reinvested for more dividend income Eventually the dividned income may be enough to allow you to start funding the Roth. So now you have dividends funding your Roth and keeping your emergency fund full. Eventually you could start using the dividned income to also start covering some of your monthly bills. Which would indirectly allow you to increase your 401K invsitment. Eventually I added other dividned funds like SPYI 11% yield. EMO 9%, UTF 7%, UTG 6% and PFFD 6%. All these funds are taxed at ta lower rate than your work income and they pay montly dividends. My taxable account now generates enough inome to cover all of my living expenses. it won't fix your problems overnight. It take time to build up the divine income . And the more income you have the easier it is to invest for retirment.

ValueSeeker1

Congrats on getting sober - that's the hardest part and you did it. Your plan is basically the standard priority order (401k match > Roth > brokerage) so you're thinking about it right. Only thing I'd tweak: SGOV for an emergency fund is fine, but once it builds up consider a HYSA for quicker access. The rebuild is a slow grind but the framework is solid.

MacDiddy27

If I really need accessibility Chime/Bancorp has a savings account at 3.75% APY with no fees or access restrictions so it’s close enough to an HYSA for me

MedSPAZ

An emergency fund shouldn’t be in bonds, you want that as liquid as possible while earning some return like in a HYSA. Otherwise good on you and make sure to at least hit that 401k match. It’s a marathon. Do others disagree about the SGOV thing?

Apollo506

Anecdotally that's me for sure. They say "If you want to buy a house in the next year, keep your money in a HYSA." Well I've been wanting to buy a house "next year" for like five years but the prices rise faster than I can save, so the HYSA ain't cutting it. The only way I think I'll ever afford a house is to put most of my down payment on the market and throw my "timeline" out the window.

dies_irae-dies_illa

No affiliation, but e-trade doing a 4% deal for their HYSA, locks in your rate for a while & pays a bonus. 100k would be like $333 a month in interest, plus the cash bonus.

bam2350

I'm going to provide extra context, which I think this conversation needs. I opened my brokerage account in 2015 with the goal to get better gains than my checking account which had accumulated too much cash. Lesson/question/change #1: Why didn't I figure out HYSA??? At the time, my father was my coach. He was fully retired, 75 years old, and living on dividends, social security, and pension. His guidance, which made sense to me, was towards dividend paying reliable stocks of companies that we're going to fail. For example MMM or ATT. He told tales of stocks he "couldn't afford to sell due to gains/tax" and the neat companies he had invested in (BGS) that had done so well. It seemed he clearly had it figured out. In time, Dad has passed, I have taken control of his old accounts to provide for my mother. There is clear evidence of emotional investing, and choices he made clearly haven't all panned out. For example, the BGS shares he gifted me are now nearly worthless. Lesson/question/change #2: Dad wasn't a genius and didn't always get it right. Lesson#3: Emotional decision making is frequently not the best. However, my mother remains well provided for, even as her costs skyrocket in assisted living. Dad was a proponent of picking individual stocks. Through time I have largely moved away from this. I continue to hold individual stocks, which has generally been OK, but hasn't "beat the market". However, since my objective was to do better than my checking account, I'm doing very well. Lesson/change #4: Instead of focusing on picking individual stocks, using broad index funds is easier and quite successful. Lesson #5: Understand and remember your objectives. At this point, VOO, VTI, and DIA account for about 30% of my brokerage portfolio. A few big winner individual stocks and a few more funds (including SGOV) round out my top 10 holdings. Going forward, I will almost certainly continue to focus on adding to my VOO, VTI, and SGOV positions. I have benefited from and enjoyed my dividends. However, some of my worst moves have been "dividend chasing". At one point, rather than benefitting from the modest monthly dividend from VOO or the declining % yield from CAT I chased dividends in a bond fund RA. I'm about 25% down on that, and while it continues to pay well above 5%, fees will eat into that. I'd have been ahead to purchase VOO, CAT, or KO. Buffet has benefitted from dividend stocks, but doesn't pay a dividend... Lesson/change #6: Don't chase the high dividends, benefit from strong stocks that pay a modest yield. Time in the market....

Subaru1995

My HYSA keeps going down 0.1 every 2-3 months.

nicolas_06

To the financial investor defense, maybe it's what the guy had asked and CD-1% is quite comparable to what an HYSA gives you. I hope at least that it was not the financial advisor advice.

JDMonster

I'd tell them to at least invest it in a CD or a HYSA (something that's FDIC insured). But beyond that you can't and and probably shouldn't try to convince them

rippedmalenurse

Im saying an emergency fund is a boomer mindset. Just invest your money in the market it’ll outperform some crap yield HYSA any day of the week. I can access any amount of that money and have it in my bank account within like 3 days. Why do I need to have 6 months worth of cash earning 4% interest when I can just withdraw from my investments. Sure I’ll have to pay taxes on that income, but I don’t see how that’s a legitimate problem.

EpicDOgeMC

It’s genuinely true though. In most things learning will always improve your performance. In investing that’s really not the case. Any time spent learning is honestly waisted time. All you need until you retire to know is open a roth, fill up your 401k to match, 3-6 months of expenses in SGOV or a HYSA and the rest in VT. Literally all you need to know right there.

Particular-Topic-445

Won’t be long and we’re going to have to remove that H from HYSA

rippedmalenurse

Having 6-12 months of income in a HYSA at the age of 31 is a massive loss in potential compounding interest. If I need the money, I’ll take it out, and then some, to pay the taxes. This is entirely a non-issue

texasinv

HYSA is always going to be short term since interest is paid monthly, CDs are different of course. But yeah, you're right about always coming out ahead if there's a gain. I do think an efund is worth it still just to avoid selling in a downturn, but for some reason my brain was just looking for a reason to argue.

AssociationFit3009

You don’t pay taxes on your principal investment just the return. You literally cannot come out behind if the stock increased in value. You have to pay short term gains on your HYSA/SGOV if you pull it early too. They protect your downside it’s a risk/reward issue more than a tax issue.

Only-Professor7360

why do you assume cash doesn't earn interest? HYSA have existed for a long time now

texasinv

Nice to be able to avoid a large tax hit in a time of unemployment. Even if you have a secure job, having 6-12 months of salary in HYSA is a good idea. Brokerage account settlement fund works too.

EpicDOgeMC

If you are focused on wanting to make as much return as possible on your investments, don’t try to learn. People deeply deeply underestimate how competitive markets are, and to generate extra return, you have to have extensive skill and knowledge beyond anything someone not pursuing finance as a life passion can have. Just invest in the VT - total market equities fund, and a HYSA or TBIL fund for short term needs. If you are genuinely passionate about finance and are fine knowing that learning won’t actually increase your return, then go for it.

hatemakingnames1

Those are likely risk adverse people who will panic sell if there's a dip and blame you for their mistake Just make sure they're at least getting a competitive rate on their HYSA/MMA

jakub_02150

Keeping cash in a HYSA is safe. No real risk. This I believe is what motivated them to keep it in the bank without investing

Fission-235

"$1 you left in cash since 2020 is now worth \~78 cents in real terms. $1 invested in $VOO grew to \~$2.55 today." Most people are not actually leaving their money in their mattress. Cash is a loose definition. HYSA at 3.5% is cash. I also consider any of the physical trust I hold as cash. I wait and then deploy that cash when I see value in the market. Your cherry picked 6 year window with a very specific investment vehicle will not age well in the coming years if you are not diversified. Chart the S&P/ interest rates over the last 100 years. You will notice the the S&P losses half of those years compared to bonds. I’m not saying invest in bonds. Now chart the S&P compared to Gold, Silver, Oil, Copper, and the S&P is a loser for half of those years. Considering we are on a historical long run for the S&P for 16 years straight, and we are coming off the lowest interest rates ever during those 6 years, and commodities have been underfunded for exploration for the last 15-30 years, do you think there is possibly going to be a shift in where money gets invested over the next few years? Keep in mind, most of those companies in the S&P are at least indirectly related to said commodities. All the energy that is required to run those data centers and make those chips and mine those materials, all the silver and plastics and silicone and lithium, and helium etc… Prices have to go up to incentivize the exploration in these commodities at some point. And it’s at that point that money rotates out of the S&P and goes into commodities. Plus when these commodities go up in price the cost of business for Tech goes up. The S&P will eventually go through a stagnation period as the supporting infrastructures need a rotation of capital. At this point the S&P will be equivalent to keeping cash under the mattress for a few years. It’s just hard to tell when those years will happen and for exactly how long they will happen. All you can do is diversify out of the S&P and take some profits now, reinvest in some good valued areas, then rinse and repeat back into the S&P along the way.

Knarz97

Depends on percentage of your net worth. I’ve got basically 1 year of mortgage and bills in HYSA. It’s also probably only 5% of my total net worth that’s in retirement so it’s really not that much in the grand scheme of things. Not a bad hedge when you work in an industry that’s constantly laying people off.