HYSA

dasgoose245

I think I've confused myself a bit more.. \-When i said i max out my 401k i guess i meant i max out my roth contributions of 23k. But this will only be maxed out by the end of the year once I've contributed through all the pay periods. Is this considered maxing? Or when people saying maxing are they doing the $69k? Overall w/ company match and their extra contributions and my contributions i put away about 35k/year into my 401k \-For the mega back door roth, does that only work once you've fully maxed out the 23k in the Roth? What i am getting at is that i might not be able to do it if that is the case since i will only hit the max by the end of the year. \-If i convert the $45k that is in my after tax account to the Roth 401k, wouldn't that mean no tax on future growth? I know I've paid taxes on it already but dont you pay taxes on the growth as well upon withdraw? If so, wouldn't it make sense to convert the 45k to the roth so as that grows for the next 25ish years i wouldn't pay tax on that growth? That would be considered a mega back door roth right? \-Are you saying to max out a Roth IRA & my HSA before bothering with the 'After Tax 401k' for the mega back door roth? \-I need to look into the fees, from what I've found i believe its 1.75% annually on the first 400k which is where i would be sitting. It lowers with more. From what i think I've gathered it sounds like my route should be in this order?: Max Roth 401k Max HSA Max Roth IRA (i could use $7k of my $8k that i have to invest which leaves 30k into my HYSA for emergencies) If i want to keep going after that, i could then contribute to my After Tax 401k and convert those funds to my Roth 401k every 2 months (give the 6 conversions a year) Once again i greatly appreciate it. You are really helping me understand.

Heyhayheigh

OP said he is doing match. Probably somewhere from 3-6%, probably not close to maxing out the 23.5 limit. Even if you were super Roth oriented, wouldn’t it make sense to do that in 401k which has more than 7k available? People love ROTH IRA because of more choices, pssshhh, in my experience that abundance of choice is a bug, not a feature. Set the plan to lowest cost internal sp500. Get as much in there as you can swing as early as you can swing it. Don’t care if Roth or pretax. Start looking into brokerage Roth IRA or taxable once you’re fully maxing 401k. I know there is an order of operations and great, educate yourself to optimize, wonderful. But people spend precious energy on optimization when they should just be going as hard as they can with 401k as early as they can. I’ve seen people “just do match”, “just do Roth IRA”, and think they are good. They don’t compare income vs expenses vs sautomatic investment; they had room for more savings but overthought, packed it into HYSA, then end up under invested staring over a cliff of indecision. Best of luck out there to all.

xiongchiamiov

>Don't pull the $8k from my HYSA and let that grow. But he also mentioned to 'build an emergency fund' which i believe I would have at least 10 months of emergency funds even at $30k (by taking that 8k out) Yeah, if you already have 10 months of expenses then I think you're good. People have differing sizes of emergency funds because of differing spending amounts. >Increase Roth 401k to 18% with spillover (this assures it's being maxed i was very close before) Sure. >I was planning to contribute an extra $500-1000/month to investing - but they suggested to consider investing that money into the After Tax 401k and the converting it into my Roth 401k - which I am allowed to do but only 6 times a year. So every 2 months i could do that? I also pay them a small fee to manage the account so it's a bit more comforting knowing it's in better hands. This is commonly referred to as a "mega backdoor Roth" (which is different thing than a backdoor Roth). Most 401k plans don't support it, so it's great that yours does because it increases the amount you can put away. Fees by the way can really add up, but just keep an eye on it. >They did suggest that after i find a comfortable amount for the After Tax 401k (say 4-5% of my salary) to THEN look into brokerage account via Schwab and learn to invest that way. Essentially try to max out my 401k as much as possible via my employer w/ Edelman's help and then with the spare money invest on my own. Well, IRA and HSA before the taxable account. But otherwise yes. >I also have $45k in that after tax account already from when i first started working there. Should i convert all of that into my Roth 401k? If so, i would just pay taxes on the growth from that account right? Up to you. You contributed after tax so you've already paid the taxes on it. >How do people make the assumption that they will be in a lower or higher tax bracket when they retire? If roth is good for people early in their career, when do you make the decision to stop contributing to a roth entirely? For example if i make 130k now, and in 10 years when i am 43, i make 200k a year do i keep putting into a roth even though i probably wouldn't expect to be making 200k a year off my retirement? It's less a science and more of a guess, really. But generally if you think you're around the high point of compensation, you'd prefer a traditional 401k.

Practical_Ad_4453

Okay the mental aspects aside then from a purely investing perspective, assuming rental do in fact increase it sounds like it’s a keeper. Try in a spreadsheet assume a 2-3 % rental increase, fixed debt cost and same cap rate and the extend 10-20 years out. You’ll be amazed to see what the return on invested capital ends up being compared to a HYSA

dasgoose245

Hello!! I talked to the company that manages my 401k last week. They made a few suggestions.. 1. Don't pull the $8k from my HYSA and let that grow. But he also mentioned to 'build an emergency fund' which i believe I would have at least 10 months of emergency funds even at $30k (by taking that 8k out) 2. Increase Roth 401k to 18% with spillover (this assures it's being maxed i was very close before) 3. I was planning to contribute an extra $500-1000/month to investing - but they suggested to consider investing that money into the After Tax 401k and the converting it into my Roth 401k - which I am allowed to do but only 6 times a year. So every 2 months i could do that? I also pay them a small fee to manage the account so it's a bit more comforting knowing it's in better hands. 4. They did suggest that after i find a comfortable amount for the After Tax 401k (say 4-5% of my salary) to THEN look into brokerage account via Schwab and learn to invest that way. Essentially try to max out my 401k as much as possible via my employer w/ Edelman's help and then with the spare money invest on my own. \-I also have $45k in that after tax account already from when i first started working there. Should i convert all of that into my Roth 401k? If so, i would just pay taxes on the growth from that account right? \-How do people make the assumption that they will be in a lower or higher tax bracket when they retire? If roth is good for people early in their career, when do you make the decision to stop contributing to a roth entirely? For example if i make 130k now, and in 10 years when i am 43, i make 200k a year do i keep putting into a roth even though i probably wouldn't expect to be making 200k a year off my retirement? Thank you so much again.

nightman001244

You are able to withdraw the amount you contributed to your Roth IRA, not the earnings, penalty free. But if you are worried you might need the money in the near term, a high yield savings account might be better for you. Also you can invest in index funds in a regular investment account. The one I mentioned, VTI is an exchange traded fund that follows the US total market. It’s a very popular recommendation. I guess in general, the more confident you feel you won’t need the money in the near term, the more money I’d put in Roth IRA. But if you are concerned you might need the money soon, look for an HYSA (high yield savings account). You can probably get close to 4% guaranteed return now. If you want to save for like a down payment on a house or a car that is like 5-10 years out, a taxable brokerage would be good. Putting some cash into each type of account is totally fine. Just align the amounts with your goals/priorities

GaylrdFocker

Probably just keep it in a HYSA unless you already have an amount set aside.

No-Dragonfruit-1324

Oh yes, please DM me for financial advice and stock picks when I’m being outperformed this year by a HYSA

Heyhayheigh

Money is about when you will spend. Anything you will spend in 2 years or less: SGOV (better than HYSA). After that, it should be invested in something that has a chance of beating inflation. It is never too late, but you should have learned this LONG ago. Soon you will be RMD age. Hopefully you can do the tech (you’re on Reddit). Honestly try to find an ethical trustworthy pro in your community to speak with. Maybe they don’t even manage your money. But you likely need help. But yea. All personal finance is the same: spend less than you earn, have emergency fund, the rest invest in something auto (don’t rely on self discipline), sell when you have something urgent to pay for, do that every month of your life. Best of luck

MacarioTala

You should be able to calculate that pretty easily by looking at things like interest and maintenance expense over your projected holding period. You can also look at the Case Schiller index for your area. Other things to consider are whether or not you can buy out the loan in cash or if you need a loan to buy it out. At the very least, you'll be giving up CD or HYSA rates. No model I've run for myself has shown me that RE outside of REITs had a place in my portfolio. I've never been convinced of having a house/home as an investment. I've always thought of it as a consumption choice. That said, I do own my own place, and it has appreciated, but not enough to be able to get me into an equivalent place today. My period adjusted conservative portfolio though, generally doubles every 6 years. All just IMHO. Loads of people on here have deeper knowledge and maybe better models.

Anthrax2112

Hello, I (30m) recently did some rebalancing of my portfolio and I am looking for feedback. I keep most of my money in my HYSA but I am looking to move more into the market for long term growth. I have established a small (14k) portfolio and want to grow it. Currently I am holding: VOO (65% of portfolio) SCHD (20% of portfolio) VXUS (10% of portfolio) BTC (5% of portfolio) I am currently able to invest $225 weekly into my portfolio and plan to split it to maintain the above ratios. Is this a healthy portfolio / strategy for long term (maybe 10 - 15 year) growth? Am I better off putting this money somewhere else? I would love to hear other people's feedback.

Various_Couple_764

money into your best interest to get money into retirement accounts as fast as possible. It takes time for compounding growth to build up. And the only way you have to accelerate it is by adding money as fast as possible. Your SO for your retirment around work up to the max contribution and you want the HSA. Getting. HYSA is simply a savings account with a high interest yield. Many people save up 3 months of living expenses in a HYSA for emergencies. such as an unemployment or a medical crisis. However it takes a year or more to get back to work you saving will run out. before you get a pay check. An alternative to HYSA is a high yield ETF like QQQI with a 13% yield in a taxable brokerage account. And turn off auto dividned reinvestment. The dividend will appear as cash in the account.Many brokerages will put the money in a money market account which is basically a HYSA. IF you have more than 6 month of cash reinvest the excess cash. Eventually QQQI could generate 6 month of cash a year or more. QQQI geneerates a continuous flow of money. QQQI also takes steps to lower the tax you pay on the dividend income. I would also recommend you read the book the income factory. It is a good guide on how to invest in your retirment accounts. The information is also useful in taxable accounts.

MayorMcBussin

Aren't you paying taxes every time you take profit? It seems like you're so downside adverse that you're willing to actualize a tax penalty in exchange for NOT losing it in the stock market. If you need the money soon, put it in the HYSA. If you don't need the money soon, put it in an account and forget about it. But otherwise stop selling stocks.

No-Dragonfruit-1324

getting outperformed by a HYSA by 4.3% this year

Certain-Ad-2418

Just finished school and soon starting a position paying a little over 100k and also army reserves. Only have 10k in a checking account and no experience investing. Company's vanguard 401k matches 4% if I defer 8%. Company health insurance contributes 700 annually to HSA. A friend suggested wealthfront HYSA but I'm not sure what platforms are best. I've heard of IRAs, TSP, fidelity, charles schwab, navy federal, etc. I really want to set myself up for success but I'm not sure where to start and want to ask folks for advice.

Inflation_2022

HYSA might barely keep up with inflation. The US market tends to beat inflation in the long run. If you like money do some hw and learn about various options available to you.

onelifestand101

Yup. My thoughts as well. What are the alternatives? You can diversify your investments of course, maybe add some precious metals or gold, very speculative and aggressive stock plays, and some bitcoin but it’s insanely foolish to put it all in HYSA and keep waiting for a collapse, that will likely never come and make it 10x harder to accumulate wealth when you finally do invest.

averyhungrynomad

Exactly this. Lots of people say we’re in a bubble and that the market is unreasonably high. They’re probably right but so what? Should we just put our money in bonds, gold, or HYSA while inflation eats away at it?

visionarymind

What’s the 🐻🐼🐻‍❄️ logic for markets with 🌽 comfortably resting above $100,000❓ Like, being negative about any asset seems pretty fooking dum @ this point imvho…just put the money you’d use for short date downies into a HYSA & thank yourselves in a year 😐 …nite nite, poors 😴

MarsupialNew9418

 i have 100k in a HYSA lmao, I'll look into investing that into a brokeage or mainly the sp500. Thank you buddy 

IllustriousPepper765

#should of retired instead, one million in a HYSA

Heyhayheigh

If you have a lot in HYSA, whatever that number is, you’ve missed out on that amount of money. So if you have 50k saved up, you should have over 100k had that been invested. Find a trusted pro to have a relationship with. Even if they don’t manage your money (you likely don’t have enough for a good one), you should know a couple. Like knowing a few good lawyers. Like knowing a few good CPA’s. You’re super young. Get started early. You will be fine. Look through my comment history for all personal finance is the same. Educate yourself on bogleheads. Best of luck out there!

xiongchiamiov

If it's reasonably likely you'll be using it during these next few years, the standard options would be to open an HYSA, or if you want to do a bit more work, open a brokerage account and invest it in a money market fund.

roastedjays

How safe would you consider these compared to a normal HYSA?

Heyhayheigh

Find a trusted pro you talk to and can trust. This is no insult. Your lack of knowledge has cost you about 300k. The market has doubled in the last 5 years. And what you saved was with no “extra encouragement”. It was with no purpose or structure. If you had a good advisor (most are mediocre, so understand this), you should have actually set more aside. Stop using HYSA, use SGOV for liquid cash. Normally better return than HYSA, and it has the added advantage of comparing to sp500 on historical performance page. This is no insult, and I know you probably hit it big with the bit of market of timing you’ve done. But you’ve actually left much more on the table and don’t realize it. Best of luck out there.

thonda27

It all depends on your interest rate if you should payoff. Now I have a 2.25% on my mortgage. I get better returns on my HYSA and MMA, so I’m not going to mess with it. Sometimes people will have peace of mind paying it off early, and nothing wrong with that.

Throwawaymoneytalk19

In general, ETFs are preferable over mutual funds because you have more flexibility with them and you don’t have to pay as much to get started as you do with mutual funds.  I use Vanguard and love it, it’s very easy to use and manage things yourself. I have retirement accts with TIAA and Fidelity but prefer Vanguard for the HYSA and brokerage accts.  Good luck!

Stararisto

What about considering a Roth IRA? Save on a HYSA some amt. But also contribute to a Roth IRA. Food for thought.

xploeris

I don't see the issue. Stocks you sell to pay for moving aren't "investments". You basically put your money in a high-risk HYSA that tripled it. Congrats on your luck/foresight, but what were you going to do, not move?

AICHEngineer

Yes, a normal brokerage is great for an emergency fund, since you can buy a simple TBILL ETF for your savings and save on the state tax and get a higher yield than a HYSA. Any excess money beyond your 401k/IRA/HSA can go to brokerage equity investments, same investments as your retirement accounts.

Straight-Annual8687

Still - much more fun than a HYSA!

Revooh17

CFP here, you're on the right track but I would take a step back and sit down with your wife to understand your goals. Starting with investments is like sailing a ship without a destination. With goals in mind, this will better direct you on how much to save and more importantly where to save (401k, Roth IRA, savings account). As a high level example for your goals: 1. Buy a home: How much do you need for a down payment, closing costs, etc. Assuming you are buying in the next couple years it would be wise to save into a low risk account such as a HYSA. This amount should be added on top of your rainy day fund (3-6 months expenses). 2. Start a family: Kids are expensive. Start to calculate additional expenses and how this affects your budget. If you want to save for college, again how does this mesh with your income and budget. 3. Save for retirement: The pension sounds amazing but keep in mind life could take you in a different direction. The Roth IRA is an excellent vehicle to begin saving towards retirement so contribute as much while also balancing goals 1 and 2. If your wife has a 401k through work, is there a match? Take advantage of those free dollars. Since the time horizon for retirement is 30+ years, these assets should be invested more aggressively (stocks rather than bonds). Let me know if you have any questions and I'll be happy to help.

Subinatori

How's that 0% gain this year doing for you? You could have made more on a HYSA. LOL!!!

IKnowNothing1998

Hey, forgot to mention I already own a house but plan to sell it in 3/4 years for the new one. Edited above. Also, with a VA loan no downpayment is needed, but definitely want to pay it down at the start as much as possible. Goal is to at least pay the land off out the gate. The E-Fund is in a separate HYSA, but I plan to combine them soon. It was just an organizational thing at first.

-Morel

Where is the E Fund being held? That should also be in an HYSA. Since you're looking to buy a house soon I would keep putting money in an HYSA, up to 6 months expenses plus the expected down payment of the house.

type_error

TLT and HYSA for you then huh?

SenTedStevens

Even better, how's the return of an HYSA over 5 years compared to GME?

averyhungrynomad

Happened to me in April, here’s what I did. Take out at least $70k and put it in SPY shares or a HYSA because you will for sure blow it away trying to recreate your success. Gamble the rest or set it aside for taxes.

MrBigBossMan

HYSA for several years

No-Dragonfruit-1324

Should have just stuck with a HYSA smh

Sciencegirl1330

Start with the basics. The market is great but not if you don’t have a High Yield Savings Account and emergency fund. A lot of people get excited about investing and put their money into stocks as their savings strategy which is a no-no if you don’t have at least a little money set aside for emergencies. Ask yourself this: if I popped my tire tomorrow and it was 1k to fix would I be able to pay for it not on a credit card or be able to pay that expense off right away? When I started investing I did it after I had about 3 months expenses saved. Now I split up money I have left after essentials into investing, Roth IRA, and HYSA. Once you start investing, I recommend ETFs. They’re low maintenance (set and forget) and usually yield good returns over time. If you want to do something a little bit more, I like acorns to just round up purchases and robo invest for me. Very hands off!

thememanss

And I will likely reinvest roughly 30% of the interest from the HYSA model, as I currently am doing quite fine with only 35k in expenses, including all bills, fun stuff budgets, etc. It would take close to 13 years for the COL for me to reach 65k.  By that point, I can assure you I will have invested it in higher yield assets. In reality, I would only keep about 250-500k at most in HYSAs, and then put the rest into an index fund.   At a measly 7% interest rates, that's only 5 years for $1.25 to reach back up to $1.7-1.8 million. At 10%, you are there after 3.5 years. I can assure you, I can live quite happily for five years on 500k in a HYSA.  Probably closer to 10, given that that's almost my take home after taxes right now and I'd doing just fine.

IraqIntel

Put it in a HYSA and keep putting the fries in the bag…

Icy_Professional3564

Put your emergency fund in a HYSA and the rest in total stock market fund.

SJ1392

First, what kinds of "advisor" are your meeting with? I'd be willing to bet this is going to be an insurance sales person... Run away fast! Take 6 months of living expenses which cold be a good chunk of that 50K and setup a CD ladder with 1/2 of that amount and put the rest in a HYSA. Then put the remaining S&P500 or some other index fund and let it ride for a while...

Random_Name532890

you dont need the advisor to buy a broad market ETF and put money in a HYSA which is the answer as always

thememanss

If all you do is put it in a HYSA at 4%, you are making around 65k a year.   I could easily retire off of that and live indefinitely because my expenses are well below that amount.  If you put it in an index fund, you will average probably closer to 100k a year.

xploeris

Do you have a solid emergency fund? Say $30-50k? If not, build one ASAP. I wouldn't skip the employer match but instead of putting extra beyond that into retirement, put it into your emergency fund. You can hold it in a HYSA, or money market account, or put it in whatever easy-to-liquidate stable fund you want if you don't want to hold cash, but don't lock it away and don't gamble with it. Once you hit a comfortable amount, you can switch back to pumping your 401k. Anyway, at 23 you can handle crazy risk. I'd put half the 401k in a market index fund, VOO or VT or whatever, and use the other half for YOLO plays. Not dumb stuff, but high risk - options, leveraged ETFs, smallish companies with potential to explode, that sort of thing. If you lose you'll have decades to make it back. If you win, split the winnings and try again. You'll probably lose as much as you win, but you'll learn a lot.

KrakenClubOfficial

I think the bigger risk than the market crashing is that it just does fucking nothing for a few years. Like, less than a HYSA nothing.

StagedC0mbustion

The government owes anyone with a HYSA that money. What do you think your bank does with that money lmao?

qqqqqx

Park it in SGOV, reinvest the dividends, collect about 4.6% annual yield. Will basically always match the best HYSA rates, very liquid, stable and safe. I trust it a lot more than opening a HYSA with some no-name online only bank that offers a comparable rate.

No_Seaworthiness1627

HYSA meaning High Yield Savings Account or do you mean stock ticker HYSA the bond? Because the bond does horribly.

TheSleepyTruth

Yep. If you plan to withdraw the funds then invest in HYSA or money market account. Something with basically guaranteed returns. If you put it in QQQ you could gleefully go to withdraw the money to buy your house in 4 years and see you actually lost 20% of your savings. Stock market investing is for long term investments, but not for parking money that you will need to use on a short-to-medium horizon. Stock market goes up overall long term but will be volatile and could actually lose money on any given year. HYSA/MM will basically guarantee you a return, right now around 4%

ChaseballBat

I sold everything in the weeks before in incremental amounts and made +100% on puts. I don't need to risk it in the market when I'm going to use it to buy a house. If it collapses sweet, huge buying opportunity. Spy is only projected to be at 6300 by end of year... That's 5% from right now. The risk does not outweigh the reward of keeping it in a HYSA or something like that which makes 4-5% a year. If the market does a drastic 180 and goes oh actually it's going to be 6600, I'm out like what? 5% missed gains? I'm not sweating over that.

Dry_Row_6694

The less regarded idea is to just keep in a HYSA and take the interest you get and return the $50k later.

Random-Cpl

Park it in a HYSA for now. Purchase “The Simple Path to Wealth” by JL Collins and do what he says. 1. Pay off debts 2. Establish an emergency fund of a couple months’ expenses equivalent. 3. Max out a Roth contribution for this year, make sure it’s invested in a low-fee broadly diversified index fund. 4. Park the rest in a taxable brokerage, and do the same.

Sea-Rough-5874

HYSA, beating inflation and risk free. Think we get 4.3% currently

Longjumping-Tone-623

I bought back in slowly over March, April and May. Mostly back into big tech like MSFT, NVDA, AMZN, GOOG and some risky ones like SOFI, RKLB, HIMS etc. Still holding some cash but overall I'm happy with how I've reallocated my money. I wish I had bought more NVDA though. It's my best performing stock so far. Big takeaway for next time is to not freak out when others are losing their shit. People over here were convinced apocalypse is upon us. In their defense, the macro outlook hasn't changed. The deficit is still an issue but I'm glad I talked myself out of doing something stupid like selling all my holdings are putting it in HYSA but I could be proven wrong. Time will tell.

Trenavix

"Going cash" also means holding in HYSA or bonds I think. It still beats inflation and is safe from any potential rugpull the market could do. It's the best option for someone who actually plans to use their money in the next few years The dip definitely showed me I should not be all-in or even mostly-in on a market due for correction so I adjusted accordingly with zero fomo.

asanano

I would update and say a CD ladder. 3, 6, 8, 12, and 18 month cds. Stat educating now, and then invest as the cds hit maturity. This will allow you to naturally DCA, give you time to educate, and generate a decent safe return rate in the mean time. Also, put 3 to 6 months living expenses in an HYSA for an emergency fund. Good luck!

SwordofGlass

1) Pay off any debts you have. 2) Set aside 6-months of expenses 2) Don’t discount a Roth contribution. You can contribute a maximum of 7k anyway, so you might as well. 3) As others have suggested, put the rest in a HYSA until you figure out a plan. 4) Housing prices might fluctuate, but they aren’t going to crash. If you can afford a home now and want one, waiting isn’t going to benefit you.

tommy_pt

A HYSA would get at least 3.5 % interest. You could put there until you decide anything. It could generate 10ka year doing nothing but collecting interest

StagedC0mbustion

$SGOV has better guaranteed returns than your HYSA

eyevandy

Securities aren't the solution for assets that you'll need to access on a seasonal basis like this. Get an Openbank HYSA.

EastandWestGuy

Each do $580/mo into RothIRA into mutual funds. I do $900-ish into 401k/mo, wife does $300-ish This all is about 25% of net income. That does not include my match (9% given by company) or HSA funding since we treat that more as a cash account right now. Also doesn't include money put into an HYSA. I have my 401k set to go up 2% every year, will be fully funding it in 5 years.

clydefortier

Agree. Sell and put in HYSA until you need the money. A time horizon of 6 months, with the current policy uncertainty, is not a time to be fully in the market. If you were retiring in 6 months, would you still want your entire nest egg in equities?

Ok-Barracuda39

Higher rates = higher interest on HYSA/CDs/etc, no? At least, mine do.

Party_Shoe104

This is long, but bear with me... I never buy, I always sell. Selling always guarantees you some income. Buying does not. Covered Call....To sell a covered call, you must own at least 100 shares of the stock. Each covered call contract represents 100 shares. When you sell a covered call....you pick a price you are willing to sell your shares for. This is known as the "strike price." Then you pick a date in which the shares must hit the price by. This is known as an expiration date. There is something known as "Delta." The Delta serves 2 functions: 1) the amount the contract moves for each dollar of the stock. So, if it is a .2 Delts, if the underlying stock goes up $1, the value of the contract goes up 20 cents.. A .5 delta will move 50 cents for every $1 change in the stock price. 2) the delta is also the probability in which the contract will expire "int the money." or achieve the strike price by the expiration date. An "Option Chain" is where you find the strike prices, expiration dates, and deltas for options. Let's use ENPH as an example: I own ENPH at $70. Right now, the stock is trading at $45.85. Instead of selling it for a loss or waiting for it to get back to $70, I can collect money (known as premium) by selling a call. Because I do not want to lose money, I will pick the $70 strike (break even). Looking through the option chain, I can sell or buy and option with the $70 strike (I'll be selling). Since the probability of ENPH hitting $70 tomorrow or the near term is just about zero, I have to pick an expiration that is several months out. The Sept. 19th expiration reveals I can collect $146 from a buyer that is interested in paying $70 for my 100 shares. So, I am getting paid to sell my shares at my price. I can pick a later expiration (Nov. 21) and collect $277. If I don't really want to sell my shares, then I look for a .2 Delta or lower. The Sept. 19th expiration has a .18 Delta. So, I click on sell option. I enter 1 contract (represents 100 shares), I enter expiration date Sept. 19th, and hit submit. In this example, when a buyer purchases the contract, The $146 goes into my account. This $147 represents an APR of 7.54%. from the cost of my 100 shares. It's like creating your own dividend. That is more than a HYSA, most dividend stocks, a CD, Bonds, etc. If by 4 PM on Sept. 19th, ENPH closes at $69.99 or below, I get to keep my shares and the premium. Then I rinse and repeat (sell another call). If I owned 500 shares, then I could sell 5 contracts and make 5 times the money. If ENPH closes at or above $70, then I am obligated to sell my shares at the $70 strike to the buyer. The buyer has the right to purchase the shares, but does not have to. I equate selling covered calls to owning property and renting that property out. I am basically renting my shares and collecting/generating income. If you actually wanted to sell your shares, then pick a higher Delta ,4. The best time to sell a covered call is when the stock is rising and when it reaches the top of the Bollinger Band. Premiums fluctuate with the price of the stock Cash Secured Put Option....You do not need to own 100 shares, but you do need enough cash on hand to purchase 100 shares of the stock....or the price of the stock minus the premium you collect. This is a way to get into a stock and not have to pay market price. I recently sold a cash secured Put on RDDT. I chose the $95 strike and picked the July 18th Expiration. A buyer paid me $915 to buy his shares for $95 by 4 PM on July 18th. If the stock closes at $95 or less by 4 PM on July 18th, then I have the obligation to buy those 100 shares for $95. BUT, since he gave me $915, my cost basis will be $85.85/share. If the price of the stock closes above $95 on July 18th, I keep the $915. That $915 represents an APR of 68% on the $8585 of cash collateral I needed to have on hand before selling this cash secured put. I'd be happy to own RDDT and I am happy to generate the $915 if I do not have to buy the shares. In selling a cash secured Put, you open up the option chain and go through the same thing I listed above for Covered calls, pick a strike price, look for a .2 delta if you just want to collect cash and not buy the shares or a higher one if you want to buy the shares, pick an expiration. Best time to sell a cash secured Put is when the stock is decreasing (premiums are higher) or when it reaches the bottom of the Bollinger Bands When selling a cash secured put, the buyer is Bearish while you are Bullish on the stock. When selling a covered call, you are Bearish on the stock, while the buyer is Bullish There is much more to Selling Options, but in selling them, you always collect a premium (earn money). Not so in buying. The Risks: The only downside to selling a covered call is that you cap your upside. In other words....if ENPH hits $90, you are still obligated to sell those shares at $70 (your strike). You still make money on the profit of the sale (if I were to pick an $80 strike) plus the premium. The downside to selling cash secured puts is if a stock tanks. Let's say RDDT is at $60 by the time expiration hits. I still have to buy at $95 (DCA of $85.85)/share. (which is how I got into ENPH and BKSY). You should spend time watching as many Youtube videos as possible on options (my advice is stay away from buying) and read as much as possible. Learn everything you can on options, then start generating some revenue. Some of those tobacco companies and oil & gas companies pay out a decent dividend. Imagine adding premiums to the money you can generate with those cash paying cows...

Decent_Project_3395

Q: Why do you value a HYSA more than a standard bank savings account? Both of them hold your money, right? A: Because the HYSA is going to pay you more. There are some standard methods, but they apply to different companies differently for various reasons. When you are buying a company, you are looking for how it will pay you back, how soon, and how much. And then you decide if you can do better. The question you are asking is like, "I want to look at cars, computers, bananas, and streaming services. I need a standard metric that tells me which one to buy." It doesn't make any sense. If you want a car, you spend months researching all the cars, makes models, maintenance reports, maybe going to the dealers and taking a few test drives. If you want a banana, you go to the store and look at the bananas. Do you know anything about quantum computers? No, you do not. Does the company you are buying have a clear business model? How is it going to pay you back? It will pay you back because the stock price is going up, right? But why? You don't understand the company, it has $0 in revenues and steep losses since the IPO, and there is no product. There is no metric that is going to tell you if that company will make it to profitability, ever, so you can get paid in other ways. That is a spec stock. If you want to invest in quantum computers, do at least as much due diligence as you would do to buy a car or a house. Learn about the tech. Learn about the players and the history. Become an expert. Figure out who has an edge bringing something to market or making some sort of money on all of this. I am using quantum as an example. You might not care about quantum computing. :) Go look at what the company does, how it makes money, how much it makes, the competition, and how it is going to pay you back. Look for stuff that the market has undervalued, maybe. "Undervalued" is also a loaded term and means something different for every company. Dude, if it were easy, we would all make bank all the time.

therealjerseytom

This is more of a /r/personalfinance question and there's a whole flow chart of what kind of basic decisions to make. But I think yes, your emergency savings should be the priority, be that HYSA or money market or some very liquid and safe investment. What you do beyond that is really open-ended and is a question of your age, financial priorities, risk tolerance, etc.

TheSleepyTruth

If this is emergency fund cash and not an investment dont listen to people telling you to buy stocks or put it into BTC. You should switch money market accounts or HYSA. In current economy you should be able to get 4% pretty easily... i use fidelity money market and current yield is 4%. Do not store emergency fund cash somewhere the value could go down and then forced to withdraw funds at a loss.

Classic-Finish-7433

You should be getting 4.5-5% rates on a money market/HYSA. That’s what I’m getting with CFG Bank

TheDadThatGrills

I'd contribute 50% to a Roth IRA account tomorrow with the goal of reaching your annual contribution by year-end. Put the rest in a HYSA for emergencies.

wildstolo

Stop investing in BTC. CDs, bonds, HYSA. Still put some money in broad market ETFs, but in general the stock market is just a giant question mark right now.

Apart_Olive_3539

If you read the gist of the post, the solo would only be a secondary IRA with SGOV instead of using a HYSA. If getting an average annual return of 11% over the last 25 years on our self made elections is ignorance, well then so be it. It was a simple question that didn’t require a condescending answer.

alphalegend91

Why do you have a rental property with negative cash flow? And why are you putting so much extra into the mortgage weekly? If those are your only holdings you are teetering on the brink of ruin. I would get a minimum of 20k built up in a HYSA before throwing extra money at a mortgage or other investment accounts.

shit_fucks_you_up

16% to max 401k. 4.5% match. $7000 to max ROTH IRA. $4300 to max HSA. $500 weekly into a taxable brokerage account. $100 monthly into a HYSA (emergency fund).

Sufficient-Noise4918

HYSA and live off dividends from 30% of that. stop. now. Dividends = end game freedom.

bobcatbart

My wife (37) and I (38) contribute 4% and 6% respectively of our gross to our 401ks, then we have $783 going into our two Roth IRAs, $200 into a taxable brokerage mutual fund, $600 into our 2 kids’ 529 plan. Plus we are putting $300 into a HYSA (Marcus). We should probably consider moving out of the mutual fund into an index fund to lower fees but it’s just how we are set up right now.

greytoc

It depends on what financial problem you are trying to solve. In general - generating cash yield in a brokerage account is a lot more flexible and can normally generate a better post-tax yield depending on the state that you live in. A HYSA these days rarely exceeds the short-term risk-free rate so I'm not sure why anyone would bother with a HYSA. You may want to read these 2 FAQ entries in the sub wiki: [https://www.reddit.com/r/investing/wiki/faq/#wiki\_what\_are\_low\_risk\_investments\_with\_liquidity\_that\_can\_be\_used.3F](https://www.reddit.com/r/investing/wiki/faq/#wiki_what_are_low_risk_investments_with_liquidity_that_can_be_used.3F) and [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)

Ill-Veterinarian908

Topic: HYSA VS Vanguard’s MM account (VMFXX) Question: Understand some HYSA’s may have a slightly higher return and FDIC insurance (the latter seems like the kicker when comparing the two), but all things considered, how dumb am I to park $5,000-$10,000 in Vanguards MM fund as opposed to some of the other popular HYSAs?

ShinsoBEAM

HYSA's are 4% right and "safe"...but you also pay taxes on that. It's normal income tax so 22% so you are right back to where you started at 3% basically. Commercial real estate investment is an entire thing and tricky to learn, you could get lucky but it's pretty risky. If you have the cash to hold long term, investing in VTI (vanguard total index) will probably result in you coming out on top 90-95% of the time, be aware you could come out on the wrong side too. This is probably your best option as long as you can hold the risk everything else is probably a mistake imo.

Still_Title8851

VGLT. Better than HYSA, and some good upside in the next 2-12 months.

zel_bob

Roughly 18% to 401k And 8% (maxing out) Roth IRA. I have a car payment right at 4.99% so it’s basically break even if I were to put into a HYSA so I’m working on getting my car paid off first. That’s my only debt. Every few months 2-5 I’ll put a lump sum to my car then the next 2-5 months I’ll put some money in my HYSA to help build that up (to buy a house in the next 5 years).

smartcomputergeek

That’s damn near just a HYSA 😂

thicksaucemagoo

First build up 3 months of living expenses into a HYSA just in case you’re out of work for a short period of time or any emergency. Then all monthly income after that should go 75% daily expenses/bills, 20% into investing, and 5% into a HYSA. You can adjust those numbers to your liking by keeping your living down or ignoring your HYSA so you have more for investing.

Historical_River2996

1. $15k HYSA if don’t have an emergency fund 2. $5k BTC 3. $80k VTI

Ray_725

HYSA

Party_Shoe104

Answering your questions: 1) Let's say your investments compounded10% annually for the first 4 years, then a correction hits. We'll use $20K as your initial investment: Yr. 1 = $22K, Yr. 2 = $24.2K, Yr. 3 = $26.62K, Yr. 4 = $29.28K. In 4 years, your initial investment has increased $9280 or 46.41%. If on year 5 the market drops 20%, you investment drops to $23,424. You are still in the green. 2) Yes...I believe the historical history of the S&P 500 has shown that holding for the long term (20+ years), the probability of you being in the green is 100% (hop on youtube and search for the "Moneyvest" channel, the host mentions that on many of his podcasts) 3) Given the previous fact, "now" is always a good time. If you follow the markets, it is always advantageous to deploy more cash into the market when the VIX is high. The dips that you are worried about on your first question is when you deploy a larger portion of your money into the market. 4) No....see the example I provided in mi first answer. If we take that 5th year (from 1st example) and continue the 10%/yr of compounding for the next 4 years, then year you would have $34,295.08. That's an increase of over $14K from your initial investment. You would not get that type of return from a HYSA, or any other conservative investment. That 10th year (any time the market has a correction) is an opportunity to load up on your favorite stocks/ETFs (deploy more cash).

Adept-University-445

Guess I'm the opposite of previous comments, as I say Webull. 4% on univested funds acts as a HYSA, plus I can handle all my trades on the mobile app. Very happy with it.

smartcomputergeek

You’re down payment money should be in a HYSA not options dummy 😂

PaintIntelligent7793

Right. Well, OP is looking for something besides a CD. I presented HYSA as the first option.

PaintIntelligent7793

9% annual return on avg. What do you consider steady? I’m presenting this as a potentially more lucrative option than HYSA or CDs, but I’ve also noted the risk/volatility, which OP may not want to accept.

FxHorizonTrading

As for cash / cash like investments, there are basically 2 options HYSA, and money market funds e.g. SGOV in the US Depending where you reside, you have *some* tax advantage with a MMF compared to a HYSA e.g. in the US, MMFs can be state tax exempted as they hold Tbills How big that advantage really is, you gotta google / ask chatgpt / a tax advicer Canada, as example, doesnt offer a tax advantage between HYSA and MMF, in europe it depends again on the jurisdiction..

Slight-Song1404

No, no, and invest more of the HYSA since you only live in Seattle.

CSCAnalytics

- Set aside 6 month emergency fund in a HYSA. - Pay off any and all high interest debt. Credit card, personal loans, even car if high interest. - Max out tax advantaged accounts like Roth IRA. Index fund such as VT / VTI + VXUS. - Put the rest in a taxable account and buy one total world equities fund, VT is like .07% expense ratio or something crazy low. If you’re older, add bonds exposure accordingly. - Set a RemindMe to thank me when you retire a Multimillionaire, debt free, homeowner, with an 850 credit score and six figure income for the rest of your life.

Fy15412cf3

#1. Set aside 6 month emergency fund in a HYSA. #2. Pay off any and all high interest debt. Credit card, personal loans, even car if high interest. #3. Max out tax advantaged accounts like Roth IRA. Index fund such as VT / VTI + VXUS. #4. Put the rest in a taxable account and buy one total world equities fund, VT is like .07% expense ratio or something crazy low. If you’re older, add bonds exposure accordingly. Set a RemindMe to thank me when you retire a Multimillionaire, debt free, homeowner, with an 850 credit score and six figure income for the rest of your life.

dlr1965

We have cash equivalents in CD’s, money markets and HYSA’s. But we have investments too.

Legal-Upstairs1383

23M, have saved this much throughout college so far. Currently enrolled full time and working part time. I will probably finish my engineering bachelor's degree in a year and master's degree in an additional year. I have 5k sitting in a 4.5% HYSA, 1.4k in wealthfront's automated investing account, and about 300 distributed among specific ETFs, Stocks, and meme crypto. Come from a low income family, I earn about $500 a month and have relatively few expenses. I want to be able to set up a foundation that will let me not have to worry about money in the future, but unsure how to go about it. I have heard that it is better to move most of my savings into ETFs instead of keeping it in my HYSA due to inflation and opportunity cost. I do not know if it would be a good idea to try to start a small business, as it seems risky in case it does not take off. I am very ignorant about money.

SnooDoughnuts7934

To be fair, he could just drop it in an HYSA and get ~4% interest. If the hysa ever drops lower than 2.99% then he would have enough to cover it if he doesn't spend any. Obviously most people needing a 50k starter loan aren't good enough with money to actually do this without spending it on something stupid so I do agree its a bad idea, but it's not like it's risky (from a purely math matical point of view).