HYSA

Competitive-Teach675

Well, if we're cherry-picking 2022, the S&P 500's total return was -18.11%. In comparison, bonds were -10%. I dunno about you, but I'd rather lose 10% of my money than 18%. Of course, 2022 was a highly unusual and bad year for bonds overall. Now that things are getting back to "normal," you'll notice that the Year-to-Date (YTD) total return, including dividends, was approximately 7.28% to 7.4%. -- Which is actually, really good. Rents and housing are starting in a disinflationary and/or deflationary environment right now. There have been quite a few articles talking about this. Depending on where you live, you can get some pretty good discounts on rent. Rent/Housing makes a big portion of the CPI, so we are definitely in a transitional environment to the downside. Nationally, home prices have gone up about 1.5%, which is really good if you're looking for a house. If the job market starts to weaken, bonds will become more attractive because the Fed will cut rates further, and those bonds paying higher interest rates will look even more appealing. Think about all those 10-year treasuries paying 4-4.5% while your HYSA is paying 2.5% or 3%. Time in the market beats timing the market. That's why a diversified portfolio, which has US stocks, world stocks, and bonds, gets you through. I'm not complaining about my 16% YTD in US Stocks, 7% YTD in bonds, or my nearly 30% YTD in VXUS.

Running4Miles

Yeah, I think this is the move for me. I'll aim for 50% of the down payment (10% of the home purchase price) in the HYSA. And for the other 50% of the down payment, i'll liquidate investments. This feels like a balanced approach where I won't miss out on market gains by having the full down payment in HYSA. And at the same time, it will reduce some of my exposure to market downturn.

Longtermhold3r

3-6 months of living expenses in a HYSA first, then everything to investing IMHO

Accomplished_Cow_335

HYSA earning 3-4%

injineer

We (also VHCOL, west coast) ended up leaving cash invested and then just building home fund up to 10% in HYSA while actively touring homes and making offers, then sold the other 10% worth of down payment from long-held positions when we got an offer accepted. Basically splitting it to ensure we didn’t miss any short term gains while we looked for 1.5-2 years, but also enough cash on hand for good will payments/holdings, that sort of thing.

D_Pablo67

If you plan to buy in the next 12 months, stick with HYSA. If longer horizon, put some into VOO, but not all.

Advanced-Mango-420

I'm so glad I put 99% of my net worth into stocks since 2020 instead of putting it all in an HYSA to save up for a house, now I have enough in my brokerage to put 50% down on a house in my area

smb3d

HYSA, or SGOV to save on some taxes.

Bigbadbuck

It’s really terrible advice tho. You lose way more then you gain by keeping in a HYSA

Running4Miles

That's the plan. Just need to figure out whether I should split those downpayment funds between VOO or an HYSA.

Running4Miles

*"If that's all you're worried about, then it's just a question of whether you think the market will outperform the 3.5% APY (or less) HYSA over the next 3-5 years."* You're right. It seems like this is ultimately the question. The answer is that I have no idea how the market will perform in the next 3-5 years. I suspect it will grow more than 3.5%, but it may not. It may do much worse. I could offset that risk by splitting the home downpayment 50/50 or 60/40 in VOO/HYSA.

iAtty

I’m in a similar financial position. My HYSA is $170k and hoping to be closer to $200k around purchase. Looking to purchase no more than $750k. Rest of my money is in brokerage and emergency fund in SGOV. Retirement is all separate.

Various_Couple_764

prioritize retirement account and what ever is left goes into a taxable brokerage account and HYSA or money market fund. but also keep in mind the HYSA is only the first step in your taxable savings. Everyone needs an emergency fund. But cash in a HYSA won't last long if you loose your job in a recession. After you get your HYSA at an adequate level you could consider using a high dividend fund. If you built up a dividend fund in a taxable account it can provide you with a continuous stream of income to to help you with the unexpected bills in life. and provide income if your get injured and can never return to work. For example 50K in QQQI 13% yield (and tax efficient) can generate about $500 a month or 7000$ a year. you can use the 500 a month to: * Cover some monthly bills. * Make monthly payments to your Roth or personal IRA. * To refill your HYSA * Or Reinvest theme in /QQQI or another dividend fund for more income. The more dividend income you get and use can allow you to divert work income to other needs. Eventually all your regiment savings could come from your taxable dividend income. And if everything goes well it might even allow you to retire before age 60.

cdude

The consensus amongst all personal finance subs is to keep down payment money in a HYSA. You should only invest it if you're willing to postpone and wait it out in the event that the market drops by then, and of course, being okay with realizing large gains in a short period of time. The other guy is kinda right, you shouldn't listen to anyone. The fact that he thinks $65k is enough for VHCOL shows that he's operating in a different economics than you. His advice doesn't apply to your financial situation.

HugeResearcher3500

If that's all you're worried about, then it's just a question of whether you think the market will outperform the 3.5% APY (or less) HYSA over the next 3-5 years. You'll be paying income tax on the interest generated on funds held in your HYSA. At least it would be cap gains if selling a long held investment asset.

Running4Miles

My concern isn't the market tanking, although that would be sub-optimal if it happened shortly before I plan to by the home. My concern is being taxed on the investment assets if I liquidate them for a downpayment on the house. I suppose the post-tax gains from money in the investment account could be greater than the amount I saved by not paying taxes on the HYSA funds. But I'm not smart enough to figure that out.

FellateFoxes

I was saving for a down payment for a house, I put half that money in a HYSA, and the other half in tech stocks. The HYSA has earned about 4% this year, and the tech stocks have earned 18%. YMMV but man that's a huge difference. Since you're pretty young I'd say keep enough to make you feel comfortable in the HYSA, and go more aggressive on the stocks. Over the long term you'll be happier with the higher returns but there will definitely be some stressful points when it drops (which obviously this won't happen with the HYSA). Learning to not care about this is a pretty valuable skill

FellateFoxes

I was saving for a down payment for a house, I put half that money in a HYSA, and the other half in tech stocks. The HYSA has earned about 4% this year, and the tech stocks have earned 18%. YMMV but man that's a huge difference. Since you're pretty young I'd say keep enough to make you feel comfortable in the HYSA, and go more aggressive on the stocks. Over the long term you'll be happier with the higher returns but there will be some stressful points when it drops (which obviously this won't happen with the HYSA). Learning to not care about this is a pretty valuable skill

HugeResearcher3500

You can start slowly moving parts of your taxable investment accounts into more stable investments if you're worried about the market tanking. Enough to cover whatever down payment you want. Other than that, I don't think it necessarily needs to be in an HYSA until you're getting close to paying.

Running4Miles

Thanks, that's kind of what I suspected. I'll probably need a downpayment of closer to $150-200k. Guess it's time to start building the HYSA.

bank_truth

Keep a chunk in your HYSA so you can max out I-bonds early next year. They’re at a 1.10% fixed rate plus inflation right now and don’t swing with market yields. STIP or VTIP dropped when rates spiked in 2022. Buying individual TIPS or defined-maturity ETFs and holding to payout keeps that risk down. SGOV is fine for short-term Treasuries, less rate exposure but no inflation bump. Rates can always rise or fall depending on the Fed. For HYSAs you can check updated rates on our website before moving money.

Heyhayheigh

Open a Fidelity account. Use SGOV instead of HYSA. Buy auto and weekly. 125/week is same as 500 a month. Just a better habit. Do this all your life. It’s really about income vs expenses vs auto investment. If your med school is 4 + years away I wouldn’t feel bad about having more in the market. Had you been properly DCA’ing the last 5 years, you would have these questions. As soon as you know money should be spent in 2 years or less, take out of market and put in SGOV. Otherwise, DCA. That’s it. That’s all personal finance is. Spend less. Invest more. Best of luck!!

AmerikanerinTX

When my husband died, I was suddenly hit with way more money than I could have ever imagined. He handled all of the finances, so I knew literally nothing. I put it all in a hysa at 4% interest and sat on that, and then studied personal finance like I was getting a degree in it. I talked to everyone, even people who I think make bad personal finance decisions. (This was much more enlightening than it seems, as it helped me sort out bad advice from good.) I approached it slowly and methodically. I kept our 401ks and IRAs as they were, since I trusted my husband's judgment on that and that is my primary safety net. I got a Step account (normally meant for children and young adults). I learned about ETFs and stocks, and each time I got interested in one, I bought exactly $100. This gave me skin in the game, in a way that reading could never do. I bought VOO, VTI, Fidelity Bitcoin, Roblox, XLG, MAGS, etc. A decent variety. This process was sooooo beneficial, as it allowed me to 'feel' the ups and downs, and work through that feeling of 'omg did i just throw money away?!' I sat on each of my $100 purchases for months before taking bigger action. Only once I was comfortable, I would withdraw from my HYSA and invest $1k, $10k, $50k, etc. This process helped me balance FOMO with confidence, as yes of course, I could've earned more in that time. I wanted to know that *I* was making these decisions, and not just chasing Warren Buffet or the millionaire next door. Nowadays, my parking lot is VOO and not an HYSA, but I don't regret my HYSA days at all.

MrAkimoto

If your intent is to build wealth, you only need one fund, and S&P500 index fund from Vanguard, Fidelity, or whomever, it doesn't make any difference. You don't need a bond fund unless you want income, VTI and VXUS are redundant when you have an S&P500 index fund, and the same holds for TSP. If you want to save some cash, use something like Vanguard's CMA or a HYSA. You portfolio shows a complete absence of any thinking or looking at the vehicles you are using for investment. In fact, my post could apply to virtually most of the posts on here asking your question.

TexGay

The only bubble is the U.S. Dollar… People finally wising up to the fact that putting their money in literally any other asset (stocks, real estate, crypto, gold/silver) is better than letting it sit in cash. What’s your alternative to DCA into literally any asset right now? Hold a ton of trash cash in a HYSA making 3.75% and wait for a Crash that will never come when everyone wants to own something because cash is trash? There’s literally nothing else to do with it besides invest it.

cupoteaforme

HYSA for money you’ll need within 5 years or so, invest with money you won’t need for 20 years or so.

cloutvegan

I'm in an identical situation myself. My goal is to buy a house/property in the next year or two, so for now I have the majority of my money on my HYSA. I've maxed out my roth for the year, I have a 401k going through my job, and just opened a brokerage account and started dumping a little money at it too. Curious what OP or others have to say, but I'd like to think our current strategy is a decent one? Btw best of luck everyone working on their financial goals :)

Engi-near

I’m saving up for a house and have a considerable amount of money in my HYSA. The house purchase will happen in less than a year. Having that much money tied up in the market for that short of time is a huge risk. My money is still earning interest in my account, and it’s very safe and liquid. The videos you watch on TikTok are the exception and that’s fine and good that they are putting money into the market, but they have different goals than you. Your current strategy is a good one and I think you should stick with it. Your potential earnings from becoming a doctor will outweigh what the vast majority of content creators are earning.

sailphish

You really need to read up on asset allocation and formulate a plan that matches your age, risk tolerance, job security, retirement horizon… etc. Investopedia, /r/bogleheads, white coat investor have good information on this, but it will take some digging. Priority should be your emergency fund. This is usually about 6 months of expenses (some people do 3, some do a year) where if you lost your job today, you could survive (rent, food, utilities… all your basic expenses). HYSA is a good place for this. After that, yes, most would say you should invest all the remainder. At a young age, 100% stocks isn’t unreasonable. You need to decide some ratio (I go about 2/3 US stock, 1/3 international stock), and either invest in broad index funds (VT is the total world market - about 60% US and 40% international stock), make your own portfolio using broad US and International funds (VTI and VXUS), or invest in a diversified group of individual stocks of your choosing (this is probably too advanced given your question). As you get closer to retirement (or some big planned purchase like a home) you probably want to move money into fixed income assets like bonds. I have a schedule where I started at 0% bonds, and every 5 years increase the percentage, until I end up with 40% bonds near my planned retirement age. Sounds like you have all your money in HYSA. If you already have an emergency fund, you are leaving money on the table. Your HSYA is probably somewhere around 4%. VTI is up 16% this year, and VXUS is up 28%. Now understand this is not a normal year, and who knows where it will end with all the volatility, but overall on long term basis, the stock market averages better returns than savings accounts.

Ok-Sheepherder7898

If you need it in the next few years then you can put it in a HYSA.  If it's for retirement then stocks.

BradBrady

IMHO you can never have too much in your HYSA unless of course you’re investing 0% It’s really up to you and what your risk levels are. What are your goals with your HYSA?

therealjerseytom

> Right now I have $60,000 in my HYSA. Is this too much? You're the only person who can answer that question. What's the purpose of your HYSA savings? How much do you need in there to meet that goal?

ConcentrateOk523

Okay so I should just own VTI and VXUS and sell the bond funds. Keep a few years in cash or HYSA.

Sweetycherryx

if that 100k is your only cash cushion, don’t move it all. markets can drop 20% overnight and you don’t wanna sell when you need cash. maybe keep 20–30k in HYSA and invest the rest. i rotate between banks depending on rates i find on BankTruth.

nocountry4oldgeisha

I got lucky with a 3.8% 4-yr fixed last summer while my savings was making 4% in HYSA so made sense. I specifically chose a non-luxury car with historically good resale value. I'll probably pay it off next year just to be safe. But I can't imagine paying a much higher rate. I guess the $80K monster truck dudes are mostly self-employed tradesmen who get major tax advantages on big trucks, so that's a different calculation altogether.

Various_Couple_764

There is nothing wrong with moving it into index funds. And it is not difficult to do. But often the primary reason for HYSA is money you can tap quickly for those unexpected large bills that show up of time to time in life. The problem index funds is you have to sell them from to get money. but you want to sell them at a profit not a loss. Unfortunately many need this money when they loose their job in a recession. Which often means selling at a loss. You want to avoid that. Another way to avoid the liquidity issue is to split the money. Keep 6 months in HYSA. And put the rest into a high dividend fund in a taxable account. For example 50K in QQQI would yield about 7K a year ($583 a month) of income. Significantly higher than the what your HYSA is generating now. So with 50K HYSA and 50K in QQQI you can: * you could put the dividends into your HYSA to keep it at the 6 month or living expenses. * If you empty the HYSA you still have the monthly income from QQQI which can be used to refill the HYSA. * You ca use the dividends to cover some monthly bills. * Deposit the 7K dividend income in a Roth account. * Or reinvest the money for more dividend income. IF you keep reinvesting the dividend income you can grow the dividends to 1K a month, 2K a mont or more. And since it is in a taxable account you can use the dividend income at any time to retire early. * QQQI is also a tax efficient fund so you pay less in taxes for the dividend income you get. So using a dividend fund has more liquidity and versatility than a growth index fund. With many possibly uses for the income. I built up 5K a month of dividend income using a variety of funds including QQQI and it allowed me to retire before age 60. 5K a month is enough to cover all of my living expenses.

brobz90

Right before liberation day, I took about 60% out of my brokerage and put in a HYSA- left 40% in brokerage which has performed well. Most of my investments are still in retirement (which I max out now, although temporary lowered it a few percent a couple months ago to have more cash on hand if I lost my job). I have a great cushion now, but I'm still not contributing to my brokerage post retirement. The money that I normally had leftover after retirement, I now use to have fun experiences like traveling, going to concerts, dining out at cool places, and other things I've stopped myself from doing in the past. Right now, the world political and economic climate just feels like a South Park episode. Objectively, it seems like AI is just not going to deliver what's been promised and the entire American economy is being propped up by what seems like a gimmick/meme. Combine that with our unstable, pay for play leadership and I have no regrets with my decisions. I'd like to invest in things that have a solid foundation and right now it seems like the foundation is rotting and people are robbing the bank before it collapses. The near term future seems somewhat bleak to me, objectively, so I'm still in a bit of wait and see mood and I feel OK about that. Yeah, I might lose out on some % gain over the next year or 2, but I have peace of mind and am enjoying myself. If someone has a different opinion and can look at the board and say hey I think this looks solid and makes sense, then more power to them. I may disagree with you, but everyone should make the choice that makes them happy and is in line with their risk tolerance.

elinordash

Your monthly expenses are low, but with a lot of lay off happening, I would recommend you keeping $20,000 in a HYSA. Beyond that.... VOO is up 18% this year. VT is up 19%. VXUS is up 21%. So why are you planning on focusing so heavily on VOO?

Fatalmistake

And it totally could continue into next year, or we could be in a recession and drop 20% because the economy isn't exactly firing on all cylinders. I think if you're saving for a house keep it in the HYSA and hope for a crash and buy a house in a few years. Just my opinion though.

D_Pablo67

If you are in a high tax bracket (likely if you have RSUs), I would use your Roth IRA as a safety bucket with interest income until you build it up to over $50,000. This is more tax efficient than having your HYSA in a taxable account subject to federal and state tax. If you want to mix in some buy and forget long term plays like IVES or IBIT, fine, but I would build the Roth as a safety bucket first.

West-Philosopher-680

Savings- 6 months emergency in HYSA, rest in money market, buy some TBILLS or CDs and create a ladder.(if you have state tax TBILLs can be a better optiony, as they are not subject to state taxes. You can also just use SGOV or VBIL ETF for TBILLS or buy CDs through your bank.) Retirement- max out ROTH IRA, contribute to 401k and HSA (you can invest excess $$$ HSA after you've hit your cap.) Visit r/bogleheads for tried and true ETF's Personal Brokerage- create a dividend portfolio. I use QQQI and SPYI ETFS currently. It pays for my monthly spending. I also have a little gold just to hedge and put spare change towards BTC. And if i get excited about a up and company company ill bet on that if I have extra cash to toss around. DRIP- Enable reinvestment for your Retirement and savings positions!!! Set it and forget it. Also use DRIP methodology until you get your dividend portfolio where you would like it to be. LIVE BELOW YOUR MEANS and budget EVERYTHING (including tine) ! - No matter what stay humble and live far below your means. Don't pay above 25 percent of your income for rent, keep your grocery budget reasonable. Instead of eating out shitty every week go to one nice restaurant a month etc.. No one knows what tommorow holds. Dont piss away your hard work buy making your day to day bills eat up your whole paycheck. All it takes is a lost job and now you have lost everything.

reedshipper

My biggest expense is my health insurance, which is $315 per month. I also pay for my Canva membership which I use for my job, which is $13 per month. So that's about $330 of expenses gone right away. The remaining monthly expenses are maybe $150. So I could keep maybe $15k in the HYSA and the rest transfer over.

azure275

If you lose your job, how low can you get your monthly expenses? You need 6-12 months of expenses based on losing your job in a safe place - HYSA, money market, or SGOV etc. After that, just invest and forget. Whether VOO, VOO + VXUS or VT makes the most sense is a whole nother conversation.

LostMyTurban

Keep about 6 months expenses (assuming you're employed) and move the rest in VOO. Make sure you save for taxes on the HYSA earnings as well.

RickDick-246

Let it sit in my HYSA until the market settles down. I’m fine losing 3-4% to feel comfortable that if the market tanks and I lose my job I can weather the storm. I’m only about 20% cash right now but it’s 2 years of expenses so either I’ll be right and deploy the capital or I’ll be wrong and miss out on about $9000 in gains which I’m okay with.

cast-not-casted

I’m SUPER new. I have 90K to invest and I haven’t pulled the trigger yet on how, where, etc. And, of course, I’m inundated with both sides telling me “it’s time in the market, not timing the market” vs “there will be a correction”—-im almost of the mind to invest half now. Throw the other half in a HYSA, and have it at the ready for if and when that correction happens, but I’ll put an expiration on that. Like, 2.5yrs. I mean, I’ve waited this long, what’s 2.5yrs more? I don’t know

Easik

Do you have debt? If yes, pay that off. Do you have an emergency fund of 3-6 months? If no, put it into an HYSA Otherwise, listen to the other comments.

FatSadHappy

Depends on your situation. If those money would likely be needed soon and you don’t have savings with some cushion- open HYSA. You can open one with 3.5% now( Amex and others) If you don’t need those money in forceable future- VOO and chill works

Good_Ride_2508

HYSA (high yield saving account) is the option for you or Certificate of deposit whichever is giving you higher interest rate.

heathenpeasent

10 month is a short period for investing. Just put it into HYSA.

RagnarokWolves

For now keep the 15k in a HYSA. It'll earn about 3.75% annually, paying about $46 a month with your current amount. You'll be able to withdraw the money whenever you want. The market is great but it's for long-term holding. Presumably you still have short-term expenses to worry about and you have no idea if there's some epic recession or bubble pop that's gonna hurt the market for 5-10 years. You need to be able to have patience for recoveries for anything in the market. When you get a part-time or full-time job, get in the habit of investing 5-20% of each paycheck into the market. (enough to hurt a little but still enough where you'll have enough on hand for life) VOO if you want to bet on America or VT if you want to benefit no matter what country comes out on top. This habit will be what makes you a multi-millionaire at retirement.

KT810

Market close on the weekends. I turned off the switch and focus on friends and outdoor activities. Go hiking, fishing, the oceans, the mountains ects. Its like a reset. Reconnect with people and even pets. We sometimes forgot about the count-down clock ticking the second we are born with unknown time expiration. Work but live also. Or plan your live acording to our life expectancy. For example im 40 right now, married, no kids. I only plan to get enough finacial security for 35-40 years out. Once that is reach, go to HYSA and I’ll officially retire. Remember all the money you earn are from sweat and tears, if you died having a large amount of extra unspent it will be a waste, matter of fact a tragedy.

Heyhayheigh

So you are doing GREAT for your age. Shift your thinking to monthly income vs monthly expenses vs monthly auto investment. Use SGOV in a Fidelity account for emergency funds, it’s better than HYSA. Then just focus on buying whatever you want on an auto weekly basis. Doesn’t matter if it is QQQM VOO VTI, whatever. Just set to auto weekly in accordance to your income and expenses. Do what’s comfortable at first. Then work to increase that auto weekly. Sell ONLY when you have something urgent to pay for. You can do the same with individual stocks. But LEARN the lessons. You will see that it takes a lot of effort and you will find it hard to set auto weeklies. You will also find yourself trading them. These are normally mistakes. Rome wasn’t built in a day. Learn as you go. Never rely on self discipline. Set to auto weekly. You will do great!!

Creative_Elevator311

Nice work stacking 30–40k while deployed—serious discipline. With both cars owned and no house rush, I’d max TSP/IRA and park extra in T-bills or a HYSA while you map your next move—you’re set to crush it.

Hokie027

This is like a Saudi Prince offering to store his money in my HYSA after I send him $100 to validate my account is real.

cjorgensen

If you are going to need the money for school just keep it in your HYSA. Don't invest money you will need in the next 3-5 years. What if the markets go down by 20%? The only exception to this would be that I'd go ahead and fully fund the Roth IRA because you can only put in $7,000 a year. You can take this out if you have to, but you can't put it back.

MrSnow702

I just started investing this month, I’m only investing $10 a day across VOO, SCHB, & SVGOV(HYSA) but I wanna start investing in the cloud service business and gonna dip my toes in CLOU. Everything I see on TikTok, and YouTube makes me feel good about adding it into my portfolio and budget, just wanna understand how research my own ETF Also just curious I am planning to buy a house in 5 years and I plan on having at least 40 invested by then, would I be able to use these funds as like leverage or something if it’s in the Robinhood app? I use Robinhood cause it’s beginner friendly but plan on moving my money out once I hit $1000

Wowmuchrya

HYSA is retarded when they're about to cut the rates to 0 when Jpow gets replaced. 2 years of 20-30% gains into 2021-2022 style crash.

Wayne_Kurr_1

i made like 20 trades in the last 3 months, and ended flat i would literally have been easier for me to just park my money in a HYSA. https://preview.redd.it/z4xe4635k9xf1.jpeg?width=616&format=pjpg&auto=webp&s=1d1d641f90b57cca5256cac5fcb4745e00fe3edc

charliekunkel

Im 52 and id love a crash. 6 months ago i went from all index funds and individual.stocks in to dividend and target date funds that only would lose 1/2 of indexes if the market crashes. 250k in a HYSA waiting for a the next dip. Every 10% dip that happens will now be met with 75k transferred from HYSA into index funds until we hit ATH's again, at which time it'll all go back into target date and dividends. Even if it takes 10 years to hit ATHs again, I'll be retired like a pimp in a tropical paradise by then...

quiteCryptic

Both are decent options it just depends what your financial plans are. If saving for a down-payment for example most people would opt for the HYSA for certainty and no fluctuation

freesincemybirth96

Props for YNAB. I also use it as our budgeting software and it’s simply amazing. Keep it up! I’m 29 and have your same goals, low cost on car/rent, want to buy a house as soon as I reasonably can. ROTH is a good move for retirement, I would recommend build up a 3-month vision first and land that in a HYSA or something like it. I put my savings in a Vanguard MMA and I get a higher APY, but to each their own. For a ROTH you can withdraw up to 10k for a home so you have flexibility with your goals, but everyone here is going to recommend to leave it and they’re not wrong. Just be conservative with your securities and allow your money to make you more money. You’re 19, that money will go a long ways when you’re older.

Zargz96

A couple questions. 1. Why max out a Roth IRA over 401k first? How does the Roth IRA produce a bigger return if I’m investing in the same index fund (S&P)? My simple mind just tells me to max out 401k completely and if/when I have additional cash, then I’ll throw that into a Roth IRA. 2. Can you withdraw from a Roth IRA like that whenever you want? I thought I read somewhere that you can, but only your contributions without penalty. If thats true, then I might put all my HYSA into it..

Affectionate-Day2743

4.3% is pretty damn good. there's always the risk of "what if something happens and i desperately need this money" but thus far that hasn't been a problem and, like you said, its not like you can't get it back. i think over the course of the next 7 months 4.2/4.3 is going to be quite a lot more than what an HYSA or SGOV/etc. will average.

Affectionate-Day2743

local bank is offering a 7 month CD at 4.20% APY. Considering the anticipated Fed rate cuts I think moving some of my HYSA over there is a decent move. what says WSB?

PainUser1490

I think I misinterpreted what you said earlier. It sounds like you're talking about having a 6 month emergency fund and critical supplies, which I think everyone should prioritize before putting a penny into investments. Hope you're allocating that cash to a HYSA. I have one at Openbank and they're currently paying 4.2% APY which helps hedge against the decline of the dollar while being able to access fast cash if God forbid hyperinflation does occur. Also strongly agree on manual labor skills, especially relating to being able to fix your cars or things around the house. My grandfather was exactly the same. Learned on his own how to fix a house and a car even though he was middle management at a telecom company. Those were critical life skills then and are becoming even more critical today.

IllBuyYourCar

The pump has been confirmed again, I really should unload my HYSA into something tbh

BigvalBROski

I thought Trump was supposed to kill the market like everyone said so I pulled all my money out and put it into 3% HYSA. Haha.

terrible-investor

Keep tuition + first years expenses in a HYSA, the rest can go into short-term bond ETFs such as SGOV. I'd look into setting up a Roth IRA if you have some money you won't touch until retirement. Only contribute earnings you were paid from a company you worked for.

bc_this_is_America

As everyone else has commented, you're only taxed that higher rate on the dollars above the new tax bracket threshold. For an emergency fund it's best to keep that money liquid and safe. This means that you're accepting the reduced earnings due to the taxes you're paying on it in exchange for having that money readily accessible in a true emergency. If you want to get your yield up some you might be able to use a combination of cash in a HYSA and some shorter term CDs to lock in rates. The idea would be that having enough cash to get you through to when your CD matures and can be withdrawn. You may also supplement a portion of that with safe bonds as well. But that carries its own set of risks for emergency funds. I'm a high-income person and I've personally put about half of my emergency money into municipal bonds due to the lack of federal taxing on them. This way I get a full 3+% interest on them that is federally tax exempt. BUT, my munis have been down most of the year and only have been coming back based on lowered interest rate expectations. For me, I'm ok with that elevated risk in this current environment, though. Ultimately, the safest bet for your emergency funds is to find the highest yielding FDIC insured account and place them there. It's usually not worth jumping through tax hoops in order to get a slightly higher return on this money, especially at the expense of liquidity.

PassiveF1st

I'm kind of bummed about more rate cuts tbh... I liked my HYSA fund actually paying out some interest for a change.

Mapleess

We don't call it HYSA in the UK, by the way. It's just a generic savings account. Have a look here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ Bear in mind that you will most likely be paying tax on the interest gained. This tax is usually taken out through your payslips.

GymBro-92

Any recommendations on HYSA in the UK that is 4.5% or higher? Everything seems to be dropping quite a bit.

jc456_

Lightyear have a HYSA. Very easy to set up Definitely do not buy assets (stocks, bitcoin etc) because you'll be liable for capital gains tax on withdrawal

Audi52

Best option is a HYSA. 12 mo is just not long enough to come back from a significant drop

t0astter

You have zero cash flow and don't know what unexpected expenses may come up. Do not invest it. Keep it in an HYSA.

seraph321

(I'm just a guy, so this isn't financial advice) It's all about risk tolerance (how much short-term loss you can stomach without selling) and time horizon (how long you can leave it invested). Anything less than a year or -10%, I'd leave it in a HYSA, but keep in mind you're essentially burning money both in terms of actual inflation AND opportunity cost (what you *could* have made if you invested). Then there's 'safe' things like total stock market index, or balanced indexes (which incorporate stocks/bonds/real estate/etc), but they can still move large amounts. Things like commodities (silver, gold, etc) are generally more for hedging against market downturns or for preserving value, not for growing it (if you happen to time it well, you can gain value as commodities 'catch up', but arguably the tiime to do that was 12 months ago when it comes to gold and silver). Then there's longer time horizon stuff, with higher volatility, like S&P 500 (still pretty safe, but there's a lot of bubble worry) and Bitcoin (used to be impossible to even mention in this sub, now somewhat more mainstream). If it were me, and I didn't have any bitcoin yet, I would allocate whatever I don't need in the next 5 years to that (whether buying it directly, or via an ETF). You could even get crazy and buy a leveraged proxy like Strategy stock, but that's getting even more risky (with bigger potential reward). Then there's the whole world of trading, options, leverage, poly market, etc. Stay far away from those.

knocking_wood

You risk having less than $62k in two years.  How much do you need to buy a house and is the Sept 2027 date of some significance?  If you need a lot more money and the date can slide, I would keep the money aggressively invested and hope for the best, realizing that you might have to save for longer if the market tanks. I also agree that you should move from risky stocks to something more stable like ETFs.  Even that is risky for money you absolutely need in two years.  For a two year timeframe, bonds, money market, or HYSA are the safe bets.  Anything else risks being down, possibly by a lot, in two years.

StrictMidnight7126

I have more like 17k but 10 is in the HYSA. I guess I just feel like I should be doing more with it

Embarrassed_Truck_46

IMO just start a Roth IRA for now and throw the max contributions and whatever you have left let it grow in the HYSA

Plane_Employment_930

Why would you sell before you actually need the funds? If it's for retirement, you sell once you need it for income when retired. You don't take profits, unless you are confident that stock or the market in general is going to tank. But getting out of the market to wait for a dip usually results in missing far more gains than the dip itself. It's good to reevaluate your portfolio every now and then and move your funds to other stocks if you feel the need. But you don't take profit unless you need the money or want that money somewhere else (HYSA, CD etc).

ChaseballBat

House was built in 2007, sold for 330k. Valued in 2022 at 800k. Rate of return a little higher than a HYSA, accounting for inflation it is barely an 80% return on investment in 15 years. S&P500 went up 425% in that same amount of time.

am22fcw

If AMZN doesn't knock it out of the park next week I'm dumping this POS. Worse than an HYSA.

pizzasandcats

I would like to buy a luxury watch. I can afford it. However, I will likely have to wait 6 months to a year to actually purchase the watch. Maybe longer. I’d like to just park the funds in a separate brokerage account while I wait. However, I don’t mind taking some risk since it can wait. Rolling a couple of options in my head. I considered a lower-beta index ETF, something like SCHD. Another alternative is to just mimic a TDF allocation for say, 2027. Would consider a bond fund or even using the money (about $8k) to run some wheel strategies. I really don’t want to just have the cash sitting there in a MMF or HYSA since I’d rather not miss the opportunity cost of being totally out of the market than not miss the watch. All my serious savings/retirement is in global index ETFs. I’m an experienced investor just looking for some opinions!

alexbananas

My HYSA gives 8.5%, should I do that or SPY (I'll still have other cash for regard options but this is more my safety net)

sturdy-guacamole

I’ve been holding enough for 20% down on a house in HYSA for 6 months now. 🥶

Business_Train_5938

Complete n00b here looking for recommendations for a new ETF portfolio starting next month. We've got a bunch of other fundamentals in good shape (IRA, 401K, Cash, House, etc) and want so start making our cash do better than a simple HYSA. We look to be investing $25-50K per year with an initial of about $10k before EoY. I am quite risk averse, so I'd like to have a good blend of investments, without a ton of high risk or volatility. This would be buy and hold minimum \~5 years and at least twice HYSA ROI (7-8%). What should I put in my brokerage account as a newbie?

TestingLifeThrow1z

If OP wants a house in 5-10 years they need a HYSA and/or Short term Bonds.

TestingLifeThrow1z

I got a very elaborate plan but it involves half a dozen investment vehicles and brokerages. Here's mine sort of: 401k Employer matched VT 401k Personal, VOO, QQQM, Emerging market and small cap. Roth IRA: VOO, QQQM, Thematic etfs and international index funds because I like doing those Cash: HYSA, Short term Bonds, Fixed Income varying, 6-7 specific funds for USA, Europe, Canada, Emerging Markets, Resources, Sectors, etc.

TheNewOP

I think it really depends on a lot of things, the biggest being your safety net. I used to think I need to keep 6-8 months of expenses in my HYSA/CD/savings acct, but then I realized that if I ever lost my job, I'd just cancel my lease and bills, and move back in with parents. I'm Chinese American so there's less of a stigma from the Asian side. Though I do feel conflicted from my American side... anyway I moved that cash to the market and have been very happy with the results.

tropicsGold

You should always live well below your income and save at least 10-20%, and then INVEST all of your savings. A brokerage account and a home are the obvious places to start. If you have an emergency, you can borrow against your home or account at good rates. There is no need to keep any significant amount of money in cash for “safety.” Now you might put savings into a HYSA if that is the best investment. But keeping a large sum in a checking account for safety would be foolish. Especially 6 months worth!!

ChuckOfTheIrish

Mix stocks, mutual funds/etfs, T-Bills (higher return than HYSA with short turnarounds and no state/local tax), and some market hedges (precious metals and stocks like WMT/MA/V that perform well in a downturn). Puts a ceiling on returns but helps to build a floor in case things go south. While it could certainly be a bubble, the AI growth has much more rational backing than dot com ever did, where revenue was not there and companies with under $1M ARR were getting astounding valuations around and over 60x their revenue while actively losing money. AI does have inflated values, but there is at least revenue to back a price around 60-90% price of most valuations (excepting some wild ones like PLTR which has a P/E over 600). So while I can see the bubble "bursting", I think a firm floor is in place compared to 25-30 years ago. I'm actually a little glad to see some (relative) stagnation in AI valuations as it shows the market has become a little more aware of what happens when betting entirely on potential.

TheCriticalTaco

Dude same… it’s not much, but all my non-retirement cash. I was like why tf am I leaving it in a HYSA when I should’ve left it in GLD since the beginning of the year. I thought there would be more upside, but I did buy at the ATH, so I have no one to blame but myself. I still think the conditions that made it go this high are unchanged. It’s just a minor pull back I tell myself 

Anxious-Ad2229

The fact that someone is bragging about being down so much sums up this sector. Investing is about making money and or a hedge against inflation . Stop what you’re doing and put your money into a HYSA, this sector is a joke lol.

WordSalad11

I always look at it as the minimum amount you should have in a safe place. After that, you should still save, but it doesn't have to be 100% in HYSA/treasuries/I bonds/etc. We aim to have 6 months savings in cash equivalents and then look at other savings as a separate pot which we diversify according to risk and time line.

No_Royals

So just put it into a HYSA (high-yield savings account). I've got mine in one that has a 3.6% APY that pays out quarterly. That can still weather a particularly bad quarter or two in the market and be more liquid, since it's basically just cash.

greytoc

Money markets offer liquidity so it's good for emergency funds or short term needs. If you don't have to worry about duration risk - a longer duration product is usually better. But it depends on the current yield curve at the time. You can spend a lot of time trying to optimize on cash yield - depends mostly on how much effort you want to expend. More info in the subreddit 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) I personally don't believe in using a HYSA - that's not as flexible.

duckme69

My HYSA is sitting at 3.75% APY currently. Those emergency funds can do some work with your money besides just safeguarding cash

Aerzon_

This is my main motivation for starting. I've been sitting on 15,875.67 in a HYSA and just watching the interest rates drop and the dollar lose value for the last 3 years. Wish I started sooner. Could've had insane growth starting in 2022. Just starting to trickle in now.

therealjerseytom

Pretty similar. Money market might have a smidge more return. I don't have a HYSA; almost entirely brokerage positions for me. I have a money market bucket for planned short-term as well as discretionary spending. Discretionary as in... maybe it'll go towards a vacation, or refinishing my deck, or something else. Fluid spending money. The added benefit there is if there's great buying opportunity in the market, I have the option to say "Ehhh the trip to Europe can wait, let's dump that all into some investments."