HYSA

OGS_7619

This. I would do Roth IRA for a simple reason that the basis is accessible any time. But a better question - what are you trying to accomplish from keeping your rent money invested - you won't get much gains over a couple of months but there is a substantial risk of losing some of it if the market crashes and you need money urgently. For short term needs most people would recommend HYSA. The amount of capital gain taxes you are saving with Roth is quite small anyways - may not be worth the trouble.

CosmicQuantum42

>I know those high-yield ETFs are not sustainable, especially without dividend reinvesting because of capital erosion, Why not just put your money into a high interest savings account and just spend it down over time, which is the functional equivalent of what you're proposing anyway. Just about any ETF that's yielding a high dividend will lose principal, or at least has a very high risk of doing so. There is no such thing as using $50k to cover your living expenses unless your living expenses are $2k/year or you are willing to spend down the principal. If you want to invest that money for growth and are somewhat risk tolerant, a conventional answer is VOO or VTI. If you want to save the money with low or no risk tolerance, a conventional answer is T bills or an HYSA account or buy SGOV ticker symbol. Crypto is not really a conventional investment, it's more of a lottery ticket. You might do well or lose your shirt. Unless you truly win the lottery with your choice of coin, crypto isn't going to pay your living expenses with a $20k or $50k investment either. Not a financial advisor, but your best bet is to invest that money into some instrument like I list above and then pay your daily expenses out of a paycheck from employment, better yet slowly adding to it over time.

Separate_Mountain701

Not sure where you’re located, but sometimes regional banks will send out targeted mailers for certain types of savings accounts. I was able to get a HYSA from Huntington bank at 4.86% APY, which has held steady even as others have dropped to 3.5 or 3.6. They could change it at any time, but for now I’m enjoying it 🤷‍♂️

Boleeezy

I believe the HYSA money was for emergencies like ER visits or forced FMLA after surgery. it seems his savings rate is close to 20% if not more. not sure what his exact port looks like but I think he only has a mortgage. He could absolutely invest more but for what?

rugerduke5

Youre right they don't make commision. Just off everything else like Order flow, interest off short positions and margin, money off loaning stock out, money off debit card services thru partnership, interest from bonds to pay for people's "HYSA", etc. The list goes on

gentlegiant80

You’re in a good position. Honestly if I were in your shoes, I’d open a Roth IRA and put the money in index funds like VOO or QQQ and let your money grow. I say Roth because you’re not in a high tax bracket and the tax free withdrawals in 4 decades will be far more valuable than getting a tax deduction now. I wouldn’t mess around with individual stocks right now. I wouldn’t mess with bonds at 17 either. I would put some money in a high yield savings account you can open online so you have money for an emergency. If I could only save $250 a check, I’d put $100 in a HYSA and $150 in the Roth IRA.

Heyhayheigh

HYSA is for short term money. If he isn’t spending, might as well invest. Set beneficiaries. Basically nothing in this situation changes the normal plan. Person still working. Person still has bills. Person still grossly underinvests. I would say an emphasis on enjoying life is in order. But other than increasing fun budget, the investing plan should resume. Teach the wife auto investment is the way.

ArthurDent4200

I think you could do better simply buying a SP500 Index fund or ETF. Target date funds tend to be expense heavy. Following the plan you have suggested is a lot better than simply putting it in a HYSA. Take a look at the holdings of the three target funds you have selected. I am going to guess there are a lot of duplicates. Finally, your options are flexible going forward. Do this for a year then compare the performance to whatever option you did not select. I never had a 401K, but I am guessing that you can reallocate your investments in the future. Art

Scary-Ad5384

Tough question. One thing I learned is to trust my gut. Seeing you seem somewhat prepared with options you might consider putting that 600 weekly into a HYSA. Not that I’m particularly bearish..sitting on 10% cash but jobs and tariffs have my gut talking to me..I’d do that through the jobs report in September where shit may hit the fan for both tariffs/ inflation and jobs. Vietnam tariffs it turns out aren’t 20% as announced..they’ll be a minimum 30% and up to 60% if China components are used in final assembly.. does that make you feel confident? Me neither 😉..Trust your gut..If you’re wrong it won’t cost you much and you can change at any time. I’m 73 and make moves like this anytime it seems prudent.

Valvador

If your goal is to not be working anymore, your salary is meaningless because the implication is that you are trying to not rely on your income. * How much do you spend on survival on a yearly basis? * What is your net worth? * How much do you have invested and where? The amount you spend on survival on a yearly basis basically sets how much money you need to have right now to not be dependent on corporate America, to be "financially free". There is an entire concept around it called FIRE. Example, the general rule of thumb is that you can probably spend 4% of your Net Worth every year if you're invested mostly in diverse index stocks + some small amount of HYSA and bonds. If you need 120,000 a year to survive you need to have 3 million dollars invested. This 4% value means you 3 million dollars is most likely going to continue growing while you spend some money. But that's it.

advan24r

If you want to potentially save more with your after tax yield. HYSA you're going to get taxed federal and state. T-Bills, just federal, and if you do a Muni Bond Fund with all Texas Munis, you would have no state nor federal!

Over-Computer-6464

If you are worried bout 0.02% then you should be worried by the much larger difference between T bills interest rates and the typical HYSA account.

composer98

If Dante were writing it: the people paying late fees AND high interest rates on their debts in one very deep circle; the people avoiding late fees but still paying high interest on their debts, a level up; the people managing to avoid stupidly high interest rate but keep any money they may have left over in checking and near-zero savings, next level up. The people still paying interest and putting any money in "HYSA" of any type, beyond absolute emergencies, next level. Pretty simple: if your investment earning rate is less than your debt interest rate, either improve the investment rate or simply pay down more debt. This is probably obvious to most people interested in investing, so sorry if I say the obvious.

Fantastic-Surprise34

I have 26 week tbills through public.com. SGOV through Schwab. Most of my cash is in those two with a little in HYSA at 4.1%. They all have their place.

Richieb313

HYSA for everything. Don’t invest.

fallingdowndizzyvr

For 2 years? No. For 20 years? Yes. Since with T-Bills you can lock in the rate. You can't with a HYSA. Remember when the "high yield" in a saving account was 0.03%?

grinchman042

Sounds like you should have more cash cushion. Start with a 6-month emergency fund and keep it in a HYSA. Then start saving in advance for anticipatable expenses that will be difficult to cashflow, like major home repairs, car replacement, child care expenses, etc. I use Ally bank’s saving account buckets feature for this purpose. You can even have a “fun” bucket that you’re required to spend on fun experiences together with your family. Sure, diverting retirement contributions will reduce the long-term growth potential, but it sounds like you have no problems there. And anyway the point of all this is to lead a great life, which always requires tradeoffs between present and future orientations — sounds like you just need to tweak that balance a bit.

Key-Highlight4910

Nah, stick with HYSA.

Pokemon_Trainer_HTX

Max out all tax-advantaged spaces (401k, HSA, Roth IRA, etc...) Park any surplus cash in HYSA or money market accounts (Fidelity and Vanguard have competitive options). Once you're unemployed, you can consider backdoor Roth contributions to take advantage of lower income. In regards to searching for your next role, applications won't be enough, you almost certainly will need a warm connection within any organization to get past the initial automated application tracking system and HR screening. Take the six month lead to reconnect with all former colleagues who've moved on, start attending in-person networking events and conferences, use LinkedIn to identify contacts at target firms and request a pre-interview to inform your application.

IceCreamforLunch

You shouldn't be investing the money you need to live on outside of something like a HYSA. Put 6-12 months of living expenses in a HYSA if you haven't already and then think about investing anything you have on top of that.

naisfurious

Your mind is in the right place, but I think fully funding an emergency HYSA that you have immediate access to would be highest priority.

SeismicRipFart

Bro I’ve literally admitted my ignorance at every step on the way throughout this post lol.  Sure, I know “relatively” nothing. But I know more than people who think holding all their money in HYSA is the best move.  Like I said, given my age and choice to only invest into ETFs, I’m pretty certain that’s a better choice than holding in cash until I’m “ready”.  I literally came here asking for help and you’re calling me arrogant😂 You must’ve missed your coffee this morning.. or maybe had too much. 

vulcan_on_earth

Which HYSA? Yield?

astockstonk

Unless you are saving for a house or something, you have way too much cash in the HYSA

Tahtooz

Either or is fine in my opinion, I personally have American Express and love it (32 y/o). I think sofi has a $300 bonus you can get for going with them. So if you wire $5k into the HYSA you'll get $300. The best way to use HYSA is just put the amount in your checking you need for cost of living each month. Then keep drafting all the extra into your HYSA. Once you have some savings built up initially you can look into retirement accounts etc. Typically it's good to build up a year of emergency money in your HYSA.

thetreece

Why do you have 115k in HYSA? Is this a house down payment or something? If that money is meant for long term investing, move it to a brokerage account and invest it Boglehead style. HYSA is a fine option if you need it in the couple years for a house or something. How much you should invest depends on how much you value financial freedom. If you really don't want to have to work if you don't to, then you should be investing everything leftover after your basic expenses. If you don't mind working into your 60s, then 15-20% is probably fine.

Vegetable_Phone3935

You’re in a really solid position — no debt, strong savings, steady income, and you’re already contributing to a 401k with a match. With your current expenses around $2k/month and a biweekly take-home of ~$2.4k, you’ve got good cash flow and more than enough room to invest regularly. Since you’ve already got a healthy HYSA cushion, you could easily invest $800 to $1,200 per paycheck without affecting your day-to-day comfort. The key is consistency and making sure your money is actually working for you. Beyond your Roth and 401k, you might want to look into strategies that aim for higher returns over the mid-to-long term. One worth exploring is Norman Vitalii — it’s built for people who want to grow their capital more aggressively than traditional index investing, without having to gamble or micromanage trades. With your profile, putting a portion of each paycheck into something like that could seriously boost your long-term upside.

ikeepeatingandeating

That's unfortunate. It sounds like you sold at the bottom, moved in cash to your new IRA, and it sat in cash through the rebound? This is article 1 on why not to attempt timing the market, but hopefully hindsight is 20/20. As you're retired now, the general advice is 1-2 years in cash, 5 years in fixed income (bonds, or in this interest climate HYSA is fine), and the rest in equity. I'd take the advice others are giving and move your credit union IRA to a real low-fee brokerage (Fidelity, Vanguard, and Schwab are all fine), and re-invest your long-term bucket in broad market index funds as quickly as you can.

Diffus58

Wealthfront pays 4.0% on its HYSA. It's 4.5% for three months with a referral from a friend. And I'm a friendly guy, lol. Seriously, I move all my excess short-term cash into Wealthfront's HYSA. If I need some (to pay a credit card, maybe), I transfer back to my primary checking. When my paycheck comes in, I leave about $1,000 in my checking account and move the rest to Wealthfront. They also offer bond-laddering accounts, which heretofore I haven't looked at, but which I might, now that I sold a property and can trade a little market risk for yield. There are other HYSAs, and you might check out what Fidelity and Vanguard are offering in their short-term products.

Korvus_Kar

I would personally use USFR if you're comparing to a savings account, it functions more similarly than 3 month treasuries like SGOV. USFR will give you a higher return than your HYSA and have no state income tax. It's perfectly safe unless the US government defaults, in which case your money wasn't safe anywhere.

Comprehensive_Bid365

Sorry for the extra q- I'm kinda noob So trying to move on from 3.5% CapOne HYSA, are there more reasons than slightly better rate (may be 1%) that these bond ETFs offer? SGOV basically risk free just like HYSA

bank_truth

SGOV usually settles in about a day, so it’s pretty liquid for most people and you don’t have to deal with the transfer limits you sometimes see with HYSAs. Treasuries are a lot more low risk. The main advantage of a HYSA is the FDIC insurance, but rates are usually a bit lower. If you’re curious, you can check out [our site](https://www.reddit.com/user/bank_truth/comments/1lo2bp1/banktruth_online_savings_account_interest_rates/) for current HYSA rates if you want to line them up before deciding.

Character-Flower-969

I am a 25 year old teacher wondering if there is a point in having a Roth IRA account. I have a brokerage and HYSA as well as a 403B. In the state I live in you get 75% of the average of the last 3 years salary for the rest of eternity. At that point my assumption will be I am a principal or maybe higher making around $220,000 a year by 65. I do not qualify for social security due to being a teacher but around $165,000 a year in retirement plus my brokerage account seems fine. Am I wrong?

ChaseballBat

But my HYSA does 5%. So it's only a 2% risk. And also it's not for longer than a year... It's only until we know the risks of this administrations policies... It's like y'all don't understand the reasons why people exited the market in the first place.

Misaiato

I fundamentally do not believe in keeping cash idle. I imagine every dollar has a job, like people. And every dollar sitting in something like SGOV or HYSA are like people collecting government handouts. Some people have valid reasons they need help, but not everyone on the dole should be allowed to stay there. I think of myself as the office of employment for those dollars. I’m constantly criticizing their lazy asses for not working more. I put them to work as soon as I can. And what I’ve learned and observed over 40 years is that even menial jobs are better than no jobs at all. Some productive output always out-compounds idle hands.

WKU-Alum

On behalf of everyone, we thank you for speaking for all of us lol. Trust me when I tell you plenty of people have retirement money sitting in bonds, HYSA, or other low-risk/return assets.

p-unctuated

I've been using Wealthfront as my HYSA for 4.5% with a referral.

Various_Couple_764

HYSA (high yieat the Yield saving account has no tax benifits. Any interest you earn at a bank is taxed at the income tax rate. You probably are confusing HSA (Health Savings account which does have a tax benifit in most states.

Various_Couple_764

I am not relying on government bonds or HYSA for pasive income. Instead I am relying on dividends from funds like PFFS 6%, UTG / SCYB all with a yields of 7%, pbdc 9%, EIC 11%SPYI 11%, ARDC 12%/ QQQI 13%. All with yields higher than government bonds or HYSA. So I need a lot less money to get the passive income I need to cover all of my living expense in retirement.

Fragrant_Witness_713

FIFO. You can simply sell the same # of shares on July 2nd as you bought July 2nd of last year, then do that for each purchase you made. Or you could gamble (or be lazy) and let it ride until November. Up to you and your predictions; and risk tolerance. If your primary goal is to buy a house with it, don't leave it in the market. If you do, there are very conservative energy stocks with dividends but you are probably just as good keeping it in your HYSA or a CD. Note that a CD is likely better for your situation, though, especially since it does look like interest rates will drop some over the next 18 months. A CD will beat a HYSA over time as long as rates don't rise, which few think they will anytime soon. If your plan is to buy a house 5 years from now, just do a 5 year CD rates are around 4.3-4.4 now for that). That makes you stick to your plan, and will beat your HYSA.

Webs_Lives

Can’t the bank change my HYSA rate at any time? With Bonds, I know the rate is locked? Forgive my ignorance, I’m very regarded and want to park my EF somewhere safe. I have 401k maxing, long term CDs, 10% Gold. HCOL area, so still a 500k mortgage, but it’s at 2.8% and the house is around 800k. Where should I keep 6 months of cash expenses to beat inflation?

Mi7che1l

HYSA is solid for the tax benefits. SGOV if you want more liquidity but similar returns

Some-Speech-4105

I will be doing the HYSA then just to play it safe it was by pure dumb luck I made something out of the initial investment

flint2018

The point the others are trying to make is that money you are earmarking for something other than retirement(especially short term things)normally shouldn’t be put into the market where it has a chance to lose money. If you want to buy a house in a few years I’d take the 4.1% HYSA. If you are okay with the risk of it losing money and then paying capital gains if it does go up then put it in the market. Most people trying to actually plan for their future are going to go with the former though.

Some-Speech-4105

I should have said that better I don’t need it soon but my overall goal is to use for a house. I’d rather not lose value as well so you do make a very fair point. Also at the same time my HYSA is at 4.1% but theres no room for growth. I’m just not entirely sure what I want to do.

PulIthEld

Strategy: Invest $1,000 in SGOV, buy before the ex-div date (e.g., June 30 for July 1), grab the $4.40 dividend, sell after (July 1-2), park cash in Robinhood HYSA (4.9% APY) for ~29 days ($0.39 interest). Repeat monthly. Annual est: $52.80 (dividends) + $46.73 (HYSA) = $99.53 (9.95% return). No fees, but watch for dividend/price swings. Thoughts?

SirGlass

SGOV holds the full faith and credit of the USA FDIC is an insurance program that is implicitly backed by the full faith and credit of the USA. The constitution requires the government to pay its debts, it does not say anything about FDIC To me the difference is negligible , I use ultra short term bond ETFs as a HYSA for the tax benefits

AsleepApplication642

I would Dca weekly or monthly. Put all of it in a HYSA if it allows you to pull money out. Then just DCA weekly or monthly.

OUEngineer17

I put cash in a short term Treasuries ETF like SGOV or GBIL. Yield is higher than my HYSA.

Any-Cup8629

I don’t. The only money I leave sitting is that in my HYSA emergency fund. Seeing money sit in my brokerage makes me feel like it’s just wasting away, I’d rather just throw it into VT or hell, even SGOV

Misaiato

My rule is I keep it in SGOV. I was buying treasuries manually for a year, and I decided that that was more effort than just buying SGOV for the same or perhaps slightly less return. It also created more forms at tax time, and having everything centralized from Schwab is less effort. I keep about 15k in that, another 40 or so in HYSA and laddered CDs. The CDs are timed to mature just before I have to pay property taxes each year.

Used-Commercial203

Emergency funds should be parked in SGOV or a HYSA. Not investments. If $100k fell into my lap right now, I would put 80% of it into SGOV, and 20% of it into JPIE, then I would sit patiently waiting on a market dip before buying up any actual stocks/ETFs. We are currently hitting all-time highs in the stock market, I would highly suggest that you *do not* invest all $100k at once in the current market.

KindKoala1

I put everything in HYSA the day after the all time high in Feb. Bought ASTS in March (which has almost doubled since then) and then bought back in completely across different stocks and mutual funds in April during the upswing. I didn’t buy back in at the bottom but also not near the top where I sold. I slept well when everything was tanking and luckily it worked out.

Ill_Safety5909

One thing, if you lump sum or DCA - don't be dumb and pull it out when it drops. You can put in stop losses so you don't lose a bunch but if you don't put them you are going to be along for the ride. Don't worry it will (eventually) recover. The big things are: 1. Keep your emergency savings in an HYSA (mainly so that you can withdraw quickly but also so you are never pulling out stock when the market dumps) 2. Don't panic - if you are screwed, so are a lot of us. 3. Time in the market > timing of the market If you want to be risky, you can do a x2 or x4 ETF.

Mission_Rip1857

unpopular opinion. HYSA at the moment. wait for 20 % dip in the market

PizzaCatTacoUno

I would recommend two things… 1) instead of HYSA at 3 something %, do treasury bills (or SGOV) at 4 something % return. 2) as many comments are suggesting here, average invest your money into equities over time (maybe 2 year horizon and increase the amount in case of dips).

aspergillum

I'm a cautious person and investor but that's way too much cash in a HYSA for most people. If you're unsure then divvy it up and find a way to auto-invest a chunk each month. Consider at least some into a n international index too.

FiftyshadesofPeaches

Max out ROTH IRA ($583 a month) and invest in VOO/VXUS (70/30 split). Contribute to a 529 plan (which is flexible and also tax advantaged) for my kid when they go to college. Anything left over, HYSA.

sweaterandsomenikes

HYSA for a house

GotAnyGogurts

Re: HYSA, look into CIT Mobile Banking. HYSA's are 4% currently. And re: buying in high, I think it's better than now buying in at all. There are always deals to be found.

QanonQuinoa

Wdym? It has a 4 year return of over 50%… that’s higher than a HYSA

my5cworth

Ah cheers! Its currently all sitting in a HYSA @ 4.5% which is where I'll be leaving the risk averse portion for home down payments etc. (Short term emergency funds are also covered elsewhere). I just currently have 50k in a stock, but im not touching it and its not doing much. The 3-5 would be for cashing out some of it if required, but ideally it'll be my retirement one day.

DivineBladeOfSilver

If your timeframe is only 3-5 years I would look at just a HYSA/short term T bills/standard money market account with interest. That is too short of a timeframe if calamity happens to make it back and very risky if you need that soon. If you are adamant about being in the market though I would look at value/dividend funds for some growth + dividends with more safety.

Bush_Killed-Harambe

I recommend getting RH Gold and buying USFR with the $1,000 of margin. The free margin will nearly pay for the price of RH Gold. I also live in CA and USFR is exempt from state taxes. If I were to get 4%-4.5% using a HYSA or Robinhood Gold I would have to pay state taxes on the interest.

Hour_Associate_3624

I do a bond ladder... get some interest payments that are state tax free, with a similar yield to a HYSA. Good for the emergency fund.

zpickz

I think also people that are currently “on the sideline” due to high savings rates. Theory being that once rates are cut and the HYSA rates come down with it, people move that money back into stocks. An HYSA paying 5% has been very attractive for a couple years now.

Borne2Run

Lowest risk is to park it in a high-yield savings account (HYSA) of 4-5% rate. Pick a bank that is FDIC insured, don't be that guy investing in a 8% hysa only for the bank to go under and your money dissapear. At 5% you should get about $15-18K profits minus taxes on the gains. Low-Moderate risk would be those ETFs you mentioned with the dividend and steady return on investment. Otherwise park it in VOO and walk, then clear it for cash in 2030. You'll make more than the hysa approach but be exposed to market swings including crashes. Dividends taxed, the overall investment you lose 10% on the gains at the end of the 5 years when you sell. (25% tax on gains if under 12 months) Highest risk book a trip to Vegas and put it all on black. Or South Dakota if you prefer anonymity on gains (they take the tax out for you and don't publish your name).

greenpride32

>I’ll wait at least until this revisiting of the tariffs comes up soon but don’t want to wait much longer. Is it dumb to buy in now with the market at an all time high? Based on your comments it seems you want to time the markets. Look at the long term chart of the SP500 (30-90 years out). You will see the markets go down sometimes, but they always come back up. Ideally, you could save all your money, wait for the very bottom of the chart, then sell it all at the very top, rinse and repeat. And in no time you'll be a multi-millionaire, and if you kept pushing billionaire is not out of the question. Now how realistic would it be for your to call every bottom and top, consistently? It's about slim and none. Typical person gets out of school and works 35-45 years until retirement. Go and find me a 35-45 year window where the SP500 is down - I'll save you some time, you won't be able to find one. You'll see many negative comments such as the market was bad from this 10-15 year stretch, you would not have made any money. First of all, investment time horizons are longer than that. Second of all, if you look at the charts, most peaks are very short, and most down turns are extended. This means that over a 10-15 year "dead period", you are accumulating more shares at the low points, than at the peaks. This means even if the index is worth $x at the start and $x at the end, you are still positive, because you were buying more when the index was $x - y. My suggestion is to keep an emergency fund in cash at all times in HYSA. Then take a number you feel comfortable with for monthly contributions. Keep some dry powder on the sidelines and use it when the market is down near term x% (pick a number such as 10/15/20/25%).

1-Dollar-Doge-Coins

Nothing in life is guaranteed, so saying "past performance is no guarantee" is kind of useless advice. It doesn't mean it's a bad idea to invest if you have a long investment horizon. There will always be risk, which is why we are compensated with higher returns than a HYSA offers.

GMVexst

You don't make significant gains in a HYSA. You make 4.65 which is fantastic for how safe it is, but no it's causing you a huge capital gains bill.

scwt

Pretty sure they meant HYSA

InclinationCompass

Open Bank HYSA is 4.3%

SnooDoughnuts1763

The real question is if you invested 1.15 million im 13 years (not including HYSA), why are you not retiring until 70? By 62 you'll have roughly 3 mil. Why not retire at 67? Are you trying to maximize benefits by an extra 24%?

SnooDoughnuts1763

I live in TX. Also I have Tbills that I bought bacl at peak. My Wealthfront HYSA is an emergency fund. I also have a 6% matching 401k, with an additional 3% RAP. So I pay 6% annually for a total of 15% of my salary going towards retirement which is split between a time horizon fund and an ETF. I bonus every year in March and put that into individual stocks aside from my 401k (as well as money from my part time job which pays me more coincidentally) and I also take part in the company matching ESPP where I put in $5k over a year and the company gives me (.75 to 1) an extra 3,333.33. I also have a monthly disability check from military service. I'm not some nucklehead that hasn't done my homework and I am very diversified in my retirement choices. The only thing I'm lacking is looking into CD ladders vs Tbills since I don't have a state income tax.

nonstopnewcomer

I love them defining “a little risk” as its share price dropping 50% since 2019. I realize this was a unique situation with interest rates that probably won’t be replicated in the near future, but it’s wild to just brush it off as if it’s just a little more risky than a HYSA.

quantumoutcast

I wouldn't call this accepting "a little risk". This fund may be good to maximize income, but over 40% of it is junk bonds and from what I can tell, looks leveraged as well. Probably one of the more risky fixed income investments you can buy and not at all comparable to a HYSA. It's just not possible to find a 14% yield with low risk.

Frank_TJ_Mackey00

You can find a HYSA with 4.3% no minimum. No risk

Tackysock46

You’ll see the price per share increase throughout the month until it reaches ex dividend date. One ex date hits it will fall the amount of that month’s dividend. I kinda like using SGOV instead of a HYSA because it’s almost like I’m getting interest daily.

gorgeouslyhumble

I'm someone who took a large chunk out of the market during one of the "oh wait just kidding about tariffs" upswings. I think I lost around 10 - 15% from the date of inauguration. But the thing is... the money I took out was the down payment on my house and I immediately put it in HYSA. I wanted to access my money within 1-5 years for a house and the volatility was really making me nervous. I didn't want to delay the home purchase I was saving up for because some random bullshit caused me to lose 30% of my portfolio overnight. I still made money off my investments and I would have made more money if I held to this point but who knows what tomorrow brings? Will tariffs get increased back to 200%? Do the current tariffs coalesce into a market report that causes stock depreciation? Do we fucking go to war against Canada tomorrow? I genuinely do not know. It's great that the market is returning to its ATH and I wish I didn't take a 15% haircut. And I really do want economic success for everyone. However, for my investment needs, I would rather have stability and peace of mind so I moved a large amount of money to a HYSA. I still have a bunch of money in the market but it's not as important as what is earmarked for my future home. If I wasn't planning on accessing my money for 5 to 10 years I would have probably held and even put more in.

SnooDoughnuts1763

I have a 4.5% HYSA that has no stipulations like you stated. Pulling funds out takes about 3 days to show in my checking account.

Scary-Jury-2182

I am a fund manager, so I would love to see you invest in a debt fund like mine that pays straight interest at much higher rates than a HYSA. That said, the higher the interest, the higher the risk. However, even US Treasuries seem somewhat risky with the geo-politics the way they are going. Most people won't tell you this, because a lot of folks are unaware, but one of the most consistent dividend paying investments over the last 150 years is mutually owned whole life policies. No, I do not sell insurance, but I do have a policy that is set up with riders to increase the cash value during the first few years. I take loans against the death benefit while the money I put in continues to earn 4% compounded monthly. Right now my policies are on me and my wife, but I plan to add policies on my children, and ownership of the policies can be passed along to them after I am gone. Pair this with vehicles like family trusts, and you have what is known as the Rockefeller method, because it was the Rockefellers who were the first known to use this strategy to grow and preserve family wealth. Google the "Rockefeller Waterfall Method" and you should get a lot of info. And your average whole life insurance salesman won't know anything about this. You will need to find a wealth manager or someone who specializes in the Infinite Banking Concept. And if you are interested in putting some of that into a fund that is backed by real estate for cash-flow, I can do a whole lot better than a savings account. DM me for more info.

rackoblack

Had you been in equities these last 20 years you'd have $5M. At this rate, I wouldn't count on leaving any for the kids. For your $1M and 30ish years left to live off it, you need more growth than HYSA will give. You have to invest more aggressively.

Rumis4drinknburning

I do my states municipal bond funds for my e fund and extended savings, completely tax free and in my tax situation I’ll make more money at the end of the year compared to a HYSA with technically a higher rate. It’s worth looking into imo

Icy_Professional3564

If you need the money quickly than HYSA, which has a variable rate and could go up or drop to 0. If you want to lock in today's interest rate then buy a bond or CD, which also locks your money up a little. SGOV also has a variable rate, usually better than an HYSA and easier to sell than a bond/CD.

Pcenemy

'the trouble of buying them'----- once your account is set up, they aren't much 'trouble' to buy. without knowing what your entire financial picture is like, hard to say. if you can get 4.65 in an HYSA, right now that's the better option. but you could also set up your tbills with that account as the primary and if the rates flip and tbills are better, simply buy from there i probably have a bit too much allocated to bills - which is why that's where my spending money is coming from right now, to bring the %age down

Over-Computer-6464

You now have enough liquid assets that you should look at the overall picture rather than locking large amounts up in a low yield savings account as an emergency fund. Even simple core money market like SPAXX that Fidelity uses for uninvested cash does better than your HYSA (current 7 day yield 4%, 1 year return of 4.85%). In addition, if you put $300k into VTI in a margin account, then you have instant access to a loan of $150k. So $50k into VTI cash-like holdings is more than sufficient for your emergency savings. That $50k can be the combination of some money in a checking account at a bank, plus cash-like in your brokerage account. With a mortgage interest rate of just 3% it is likely that your *average* return from the stock market (VTI) will be higher. I recommend just laying off your mortgage per the normal amortization table. Your last issue is the mechanics of moving your cash into the market. You state that you are "afraid of investing". So rather than putting it all into the market at once I recommend that you just start a program of putting another $25k into VTI each month for the next year. Or if you can convince yourself to do it, $50K per month for the next 6 months. Pick a day of the month and then do it, ignoring whether the price is high or low.

nicolas_06

I have an HYSA at 4%, long term investment grade bonds at 5.5% (VCLT for example has a 30 day SEC yield of 5.85%). And you can get around 6.5-7.5% high yield (junk) and CLOs. The long term return of such things are quite solid from what I saw. But all these things - except the HYSA - come with increased risks. Still at 4% and 30% marginal tax rate, an HYSA at 4% is only 2.8% net, less than the 2.99% rate of OP. Also not sure we will keep 4% or 3.8% return for the next 10 years.

optimiism

You can get a HYSA at 4+% still. 5yr bonds at 3.8%

safbutcho

So here’s the deal. The goal is “spend less than you earn and **invest** the delta”. Clearly you are frugal and doing great; your dilemma is how to “invest”. Hopefully these last few years you’ve at least had 4% returns on CDs or HYSA. I shudder to think maybe you’ve been earning only 1.5% in a bank savings account. That’s not investing; that is actively losing you wealth due to inflation. So, you’re frugal but you’re also risk averse. That’s not good or bad; it’s just a fact. That’s good to know about yourself moving forward. Paying off your house is a perfectly good investment. 4% CDs or TBills are as well. But if you add a little more risk, you can earn more than inflation. VT or VTI is a good path forward. But if you understand the **risks** of your low risk tolerance approach to investing and still want to pay off your house or earn 2-3% in safe investments, by all means do what helps you sleep at night. Good luck!

scotty6chips

Just for the sake of financial safety if you actually did manage this, put at least 15k away in a HYSA and put aside 3k or so for taxes. That 3k is completely untouchable. The other 12k should be untouched as well if you have the discipline. Go nuts with the remainder, continue working your strategy, see if it was just beginners luck. No need to melt down your entire chunk thru tuition paid to the market. Take your winnings and play with the rest if you must!

nicolas_06

Not after tax. After tax, you would lose money putting money into an HYSA and keeping the debt.

nicolas_06

If you put it in HYSA at 3.6% instead of paying back home, you lose a bit of value because you are taxed at your marginal tax rate on the HYSA so only 2.6-2.8% after tax. On top we don't know the future, but I wouldn't be surprised if HYSA return would lower a bit to maybe something like 3% within 1 year or so. So maybe 2-2.25% after tax.

paperlesspython

Bruh, you can get more than 2.99 in an HYSA risk free by placing 180k in 2 different accounts (to be under the 250k FDIC limit) and arbitrage 1.5% annually for free. It gives you liquidity, the choice to pay your mortgage if you want, and to make a tiny little bit on the arbitrage but I’d argue that having risk free liquidity at 0 cost is better than debt free.

Droo99

You sound pretty risk averse. You should move the cash to a vanguard account/money market fund to get an extra 0.5% or so over the HYSA and then put 100k in a total stock market fund. 6 months from now evaluate how well you deal with the ups and downs of the 100k and if you have been fine with it, invest more.  Expect to possibly lose half the money you put in stocks at some point. 

optimiism

2.9% per the post. I wouldn’t bother paying that off quicker at all. HYSA arbitrage at a minimum.

duqduqgo

I'll assume you mean the US treasury market, because there are many bond markets sovereign and corporate. bond market isn't signaling much of anything in my view. It's reflecting the changing values of global trade and adjusting for future spending all over the globe and US stability and interest rate change probability. The UST market has been in a range for a while now and the curve has been pretty stable. Once again an understanding of what drives currency values is critical. The greenback has been a reserve currency because when the US buys stuff from other countries we pay them in dollars. Those countries then have a lot of dollars because we buy a lot of stuff. They often keep the dollars because they have proven stable stores of value over time, and they buy treasures with those dollars as a HYSA, and the UST market is multiples of the size of any other sovereign debt market. All global debt and currencies are graded on a curve. Unless and until and to the degree that other countries buy more, are a better store of value, are more stable and pay better interest, the greenback will remain a reserve currency. The US is not going to default. If the US did default, it would be technical and very short term and not actual. The UST can print all the money it wants to service it's nominal debt and avoid actual default.

ResidentCat4432

Don't pay off a 2.99% loan. You're making more money in the HYSA and you'll lose the tax write off. Invest in the market.

Medical_Watch_6283

70% HYSA for emergency fund + buying opportunities.

therealjerseytom

There's something to be said for having a mortgage paid off, it certainly feels good. There's an opportunity cost though with resetting your principal value down to zero before you start investing (in equities, presumably). Let's look at two scenarios. One, you pay off the mortgage, and start contributing $2k / month in equities, at a 10% annual return rate, for a 10 year span. Alternate scenario, you keep paying down your mortgage, put that $368k into an equity investment, and continue adding $2k / month. In the first scenario, your end balance after 10 years is $413k. In the second scenario, your end balance is $1.4 million. So, you'd have to look at your mortgage and the remaining balance, how much of that is interest. Wiping that out, is that worth giving up $1 million? Obviously these projections aren't guaranteed and are predicated on assumed long-term rates. Could be less than 10% return. Then again, the past 15 years has seen a 13.4% annual growth rate in the S&P (nominal dollars). At that rate, if you started with $368k, plus the $2k/month, you'd have $1.9 million after 10 years. If nothing else you're giving up some return by having that much money parked in a HYSA. Money market funds are around 4%, and if you roll your own treasury bill ladder you'd be around 4.2%.

BRK_B__

if 2.99 u are making money not paying it off and keep in HYSA. btw my vanguard MM fund gets 4.2% so look for better rates