HYSA

NecessaryEmployer488

I'm 60 and have this mindset. The issue is that life has many twist and turns that knocks you down and half to adjust. Most businesses fail. No it is not popular thought but does happen. Many starting to invest do not know about [dot.com](http://dot.com) bust or 2008 financial disaster. Unfortunately, in each family someone has to worry about money. Why, because society is set up that way. Well I got over the stress by building a large emergency fund like $100,000 in a HYSA. This takes the edge off investing because you have a back drop. I gave up short term investing for medium to long term investing. Do I look at the market every day. Yes. but look at my charts at night a make trades long term in nature and not short term.

DudeWithTudeNotRude

Probably max 401K and HSA first if reasonable. But personally I'd keep 2-3 months of salary in the hysa, and have the rest of my Emergency salary/house/car Funds to brokerage, maybe split into something like salary in Money Market, house in SGOV, and car in BNDS. As long as you have a few months salary that is easy to access, your credit cards, HELOC, et al can cover you for the ten days it might take to get to the rest of your emergency money out of brokerage. I wouldn't call it optimal, but it's a good intro to how taxes and everything are different in brokerage, and now you have a platform ready for after you've maxed all your tax-advantaged accounts. Taxable brokerage is where I tend to have "smaller" or more focused indexed ETFs, if that makes sense. If everything was available to all my accounts, I might have the most fund index like VT (with maybe some bonds) in 401k for simplicity, then in ROTH IRA would be VOO (with less/no bonds) since I want the most tax-free growth possible there, but then in brokerage, instead of VT I'll use smaller ETFs like VTI + VXUS (which together they are very similar to VT). That way i can benefit from the foreign tax credit in the brokerage, and I have more flexibility for re balancing as needed over all of my accounts. And bonds will go heavier into which ever account has a compelling tax reason. E.g. if I have a high state tax, some bonds might make more sense in brokerage, but otherwise I'll probably have more bonds in the 401K. Be careful of having the same funds (or funds that are practically identical) in brokerage that you have in other accounts. If you ever get to the point of tax-loss harvesting in your brokerage, you can't use that if you have the same or similar-enough funds in your tax-advantaged accounts. I'd lump sum from HYSA Have a plan for retirement, and then ignore dips until you are close to retirement (or have a plan that includes buying more during dips to benefit from the discount, but I'm not smart enough to time the market like that). Your plan should include the possibility of a crash during retirement. If you aren't actively spending money from your accounts as income-replacement, such as you would during retirement, then downturns mean little (unless we finally have The Downturn That Never Upturns Again, in which case, have extra ammo and water, since your accounts probably won't matter) You plan should cover all your accounts. If you want 10% bonds now and 50% bonds closer to retirement, that would apply to all your investments. Your accounts don't have to have the same distributions ides each one. Remember that only ROTH dollars are showing you your real invested dollars. E.g. a good portion of that money in your 401K belongs to the government, so subtract 22% if you want to know how much money you have in there (or subtract whatever your tax bracket will be in retirement, which we unfortunately can't know). For brokerage, it's more complicated.

Radiant_Permission15

From an investing standpoint no investment is guaranteed to grow 100% besides maybe a HYSA at 3.5%. As far as realistically from a history standpoint things like the s&p500 has historically shown to average 8-10% a year. It is not guaranteed but that is the average. It isn’t necessarily safe but also is way safer than investing in single stocks

RespondTemporary3099

Well as of right now a HYSA would have outperformed the S&P.

Kindly_Habit_3305

PNC has a dividend yield that is nearly as good as a HYSA

LowerSeat2712

Thanks for the feedback. I think my love of gold comes from growing up in a family where my wealthy relatives treated gold like the ultimate safe haven. The amount of money I've made from my gold investments over the past 6 months has only reinforced that bias. Currently my cash is in a HYSA and some CDs, but I plan to distribute it more into the market over the coming months.

CrumbBCrumb

Too many comments are saying to wait for the dip or something like a HYSA. The HYSA is certainly a safe idea but reddit has been saying wait for the dip for years now. This section is also notoriously wrong about which stocks are going to continue to fall and when a market correction is going to happen. In April of last year so many were claiming Google was heading to $100 or below. If you bought in April 25, it's up almost 100%. A lot of people have been saying we're due for an over correction since the COVID recovery. I would be very cautious of any comment around here

NastyNade

Take the estimated tax amount, throw it in a HYSA to soften the blow a little and reinvest the rest.

LevelSevenWizard

I have been trading for 4 weeks. My first week I made a rookie mistake and lost 2k realized. Luckily that loss was on USAR, my first pick, and I ended up selling at break even. Learned my lesson, researched, and changed my mindset from gambling to investing for wealth building. I have since turned my 2k seed into over 12k in holdings. Stayed up last night doing research on the Iran situation, bought and sold a few energy stocks at lows and peaks. Put my realized into my HYSA and reinvested my initial + interest into high quality tech stocks at a steep discount. I can tell by the few lovely interactions i've had on this sub that its full of gamblers who mostly lose. I lost once gambling, broke even, and learned my lesson. Turns out this game isn't hard if a rookie with barely a month of experience can spend a few hours around 12am-3am trading and waking up to a solid green candle on my daily with 4 figure in realized headed to the HYSA. Honestly thanks for concern though. People lose their ass on this because they dont listen to advice like yours. Like I said I only trade securities. No margin, no options, futures, etc. Just good research, intuition, and patience. Good luck I hope you make as much money as you desire.

thebalancewithin

For those sitting on the sidelines with their cash, where are you parking you money? T-bills? HYSA?

Icy_Letterhead4893

Bro you were in HYSA because the market scared you and now you're stockpicking instead of buying SPY? That's not less risky lmao that's more. MSFT and AMZN are already like 15% of SPY, you're literally just rebuilding the index but worse. And putting RDDT and SOFI next to BRK is sending me... one is Buffett, the others are straight up coin flips ngl.

johnnymac_19

Put what you think you'll owe in taxes next year in a HYSA and reap the benefits of interest.

modder9

It’s been within 2% of ATH for 6 months. Inflation means it’s going down even when it goes sideways if you were better off putting your money in a HYSA instead.

chongjin

VTI would be good since you have all int'l ETFs. Is the cash at least in a money market fund/HYSA if you don't want more equities?

Paul_Robert_

I definitely should've just DCA'd into a HYSA 💀

modder9

Might as well just get a HYSA with the past 9 months of price action.

pink_ego_box

Ain't no HYSA that can do +100% in two months

Lucky_Platypus341

I have all 3 and would recommend Fidelity. Fidelity: good sweep fund (SPAXX right now. is 3.32%, Schwabs pays 0.1%, so uninvested cash gets nothing), fractional shares, easy treasury ladders, easy platform to use, can do bill pay right out of your sweep fund (so get HYSA level interest on money you pay bills with), running balance on activities make using it for bill pay easy. If you decide you wanna move, no fees for closing the account (others charge $100). Schwab: best for active traders (good tools, and opens trading activity on the side instead of reloading over your current window), people who want a Coverdell ESA IRA (not offered by Fidelity or Vanguard), and people who think they may go ex-pat in the future (had int'l branch). Not supporting fractional shares and not offering any interest on the sweep fund are my main issues. Vanguard: find myself going through lots of menus to do simple things, and doesn't offer running balance on activity screen (have to generate a PDF report). An example is I'm looking at a holding. I click the "cost basis" link and it takes me to a screen of all my holdings again where I can scroll to the one I was just looking at and click a expand arrow to see all the bases. I should be able to access all info relevant to that holding from one screen. Vanguard offers the best rate on their sweep fund (VMFXX is 3.59%, so 0.27% better than Fidelity). Vanguard offers eft versions of their biggest mutual funds at a lower ER (0.01% lower), so you can access all of Vanguard funds anywhere. Fidelity and Schwab have their own versions as well.

I_kwote_TheOffice

What kind of rates are we talking about? I have a similar situation, about $40k in a HYSA at 3.20% because I expect to use that money in the next year for a remodel. What are we really talking about in a money market or CD? Would I be gaining that much more than 3.20% in some other short-term investment tool that is equally liquid?

Heyhayheigh

CD’s are for when you know the exact date of the spend. Short term money just money market or something like SGOV if you’re using a self managed broker like Fidelity. I generally tell my clients their emergency fund is safer with me in a money market than in HYSA or SGOV in self managed account (people just tend to tap into it more in my experience). I generally tell people to not bother with CD’s. The difference in yield is generally negligible. Have a plan to auto invest, your advisor should be pushing you to spend less and invest more auto, putting you into financial planning software. Emergency fund in money market is fine.

KlitTorris

If you cant stomach -5%, maybe park your money into a HYSA and call it a day.

Oykb101

This isn't the end of the world. Just take that 4k you'll owe next year and squirrel it away in a HYSA, or some other safe, fixed income product.

StepAsideJunior

Safest place is an HYSA (High Yield Saving Account) that collects anywhere from 3.65% to 4.15% (you may even find higher than that). **Now for the conventional advice you'll hear from everyone:** 1) **Max out your IRA** Contributions for the year. You have until April to max out your contribution for 2025. So with 30k you could max out 2025 and 2026 (7000 and 7500 respectively). 2) If your company offers a **401k** use it. 3) If you are young and healthy consider an **HSA health plan**. The **HSA is a triple** advantaged account in that money that goes into the account is \- Tax deductible \- Withdrawals for medical expenses are not taxed \- And the best part is that you don't pay capital gains tax on earnings from your investments in the HSA. Even if all you did was max out a ROTH IRA for the next 30 years at an average return of 8% you would have close to a million dollars of non taxable income. Just investing $7500 a year into a basic S&P 500 ETF like VOO will get you to 7 figures.

naisfurious

Stick it in a HYSA and use it as a safety net to get you through some type of schooling/training/certification to increase your income. The returns on that will far surpass anything else you can do.

Various_Couple_764

VOO is a good growth fund to start out with. And it is tax efficient. With 8K a month coming in this money willl mostly end up in a taxable brokerage. But with grim the popularity often falls quickly. It might be better to consider a dividend fund instead of a growth fund. A dividend fund invests you money and then send out Quarterly or monthly cash profit sharing payments directly into your your brokerage account. QQQI is one with a 13% yield 50,000 will generates about $500 of income you can use for anything:to * you can use the money to keep you savings account full * Use the moeny to pay regular monthly bills * make a yearly deposit into a Roth retirment account. * you can use the money to invest in grwoth or invest for more dividends. Essentially you are replacing the passive invoke from the game for passive income from investmentsin your brokerage acount. I am near retirment and am investing for passive income. I keep 6 month of expenses in a money market account (it's basically the same as HYSA account). And currently have 6 about 6K a month of passive income. Most of which I spend to cover living epees and and the rest is reinvested. A good book to read about dividend investing is The income factory. ArmChair income on youtube invests the same way but he does detailed reviews of funds many of which iare in his personal account.

expert-on-reddit

Can’t tell you what to do. But assuming under 30 and if it were me: Invest $150,000 into a low cost index fund (for example VOO) through a respectable broker (Fidelity, Schwab or similar) and name a beneficiary in the event that something happens to you. Keep the beneficiary information updated and keep up with any tax information but otherwise forget it exists until you’re 65. Barring exceptional unforeseen or tragic future events, you now own your future. Next, take the remaining $30,000 place it into an HYSA and use it as sleep well at night emergency fund only. Make all other financial decisions as if this money does not exist.

Tayler_Ayers

Makes sense actually. Just need to add an fdic HYSA (unless i missed it on their plat). Lots of $ in CB might as well increase offerings to keep it on the plat

sonofdang

As others said, get ready for taxes, save at least half in the HYSA. Consider purchases you made that could be claimed as expenses (hardware/software/subscriptions, physical stuff like office furniture/supplies etc). Talk to a tax pro, if you've been developing the game for a while you might consider refiling previous year's taxes even.

Reasonable-Desk3273

For a 5-year house fund, protecting the principal matters more than squeezing extra return, so your instinct is right. HYSA, short-term treasuries, or a simple CD ladder are boring but appropriate because they remove timing risk. Equities only make sense if you’re flexible on the purchase date — otherwise stability beats chasing yield here.

kitehousecyprus

If your horizon is not at least 15-30 years (you said 2years) don’t put money in VOO VOO return in 2024 24,94%, in 2025 17,82, in 2026 so far 0,62%. There is clear slowed growth last 2-2.5 years. And it could be very easily followed by decline. SGOV yes or HYSA, but for such short term(2-5 years) I wouldn’t risk my money in any US index.

Fast-Squirrel-9500

HYSA is the safest, no argument there. But wouldn't I be missing out on a lot of compounding putting 6-9 k away a month? That would add up fast

Grrrrrrr_r

Timeline is probably the biggest factor here. If you're 1-2 years out, I'd keep it boring—HYSA or maybe short-term treasuries. But if you've got more runway, you could stomach some market exposure.

Gladiz1972

What's your HYSA paying now ? I know the Vanguard money market funds are yielding around 3.70 now .If you want take on a bit more risk they high yielding bond funds in the 6-7 percent range I am in VWEHX which is a Vanguard fund .

Pale_Pineapple_4147

I was in the same boat as you. Honestly just invest it slowly overtime in ETFs and gold. Has I not done that 3-4 years ago I wouldn’t be as well off as I am now. I have all those gains from the past few years I wouldn’t have had in an HYSA

djlawson1000

To make this question easier I’d clarify what your specific savings goal is. But for me, I’d focus on something boring like HYSA and S&P contributions.

junger128

The problem with investing money you plan to use within the next 5 years is what of your portfolio loses 50% of its value and it takes you a decade to recover? That’s why you don’t invest that money and keep it in a HYSA or equivalent.

therealjerseytom

HYSA or similar investment is probably your best bet, and over relatively short time horizons your contributions will be doing most of the work for portfolio growth. If you were to do something with a brokerage account I'd still keep it very low risk and predominantly short or at most intermediate bonds. Maybe like at most 15-ish percent equities and low-volatility leaning.

djlawson1000

Am I reading this correctly that you have high 5 figures (70-90k) in an HYSA already? Thats more than enough for a down payment on a starter home. Are your HYSA funds untouchable for the house purchase or do you want to save as much as you can and supplement with the HYSA?

2016KiaRio

Lmfao, you're retarded if you think tomorrow is going flat. Like, not WSB-joke-esque retarded. I mean genuinely-pull-your-money-out-to-a-HYSA retarded.

ClosedDimmadome

Why not contribute more to a tax advantaged account? Up your contributions with your employer assuming it's being invested in a target date fund or low cost total market index. Or open an HSA if possible. Typically it goes.. save 6 months in a HYSA, get the full employer 401k match, max your roth ira, then go back to contributing to the 401k unless you have an HSA.

HadrianXVI

Max out your 401k. I won’t tell you what is a safe amount in HYSA, but might as well take the tax advantages of the 401k first before opening a brokerage account

Machine8851

85k in a HYSA is just wasting money to inflation and more than likely pays a measly 3-3.5% in interest. Might as well put it in SPYI which pays a distribution rate of 12% and is less riskier than VOO. You wont pay taxes with SPYI in a taxable due to the tax efficiency of ROC plus you will get a guaranteed return of 12% a year plus capital appreciation.

MizDiana

• HYSA: $85k earning about $200/month in interest That's a waste. Cash loses value due to inflation. The 85k should be invested in some index (perhaps VT) in a brokerage fund, put into a different store of value (like, say, a gold ETF), or at least put into treasuries or something like that. Keep a few months of expenses in the HYSA as an emergency fund (aka a "fuck off fund" just in case you land a bad boyfriend or girlfriend, lol). Since Trump was elected, I prefer broad ETFs of non-USA stocks. Stuff like VGK (Europe), FLKR (Korea), or ASEA (South-east Asia). VXUS (everywhere but the US) or VT (the USA + the rest of the world too) if you want super-broad based etfs that you ignore forever and ever. You're 23. Stocks go up over the long-term (because companies overall become more profitable as technology improves). In a brokerage account you want to invest in ETFs or stocks that you will hold for a year or more. (In the USA, stock market gains are taxed as capital gains if you held the investment for more than a year. They are taxed as regular income if you held the investment for less than a year. Capital gains taxes are much lower than income taxes.) "How do you mentally handle market dips?" Not looking. Seriously. Keeping in mind you want broad, diverse ETFs that you will hold for a year or more, I wouldn't bother to pay any attention to the brokerage account unless you are adding more money to it. "Did you transition money gradually from HYSA into investments or lump sum it? I lump summed it. No real reason to transfer gradually, in my opinion. Though in my case I never had an HYSA. Never saw the point. "how you decided on your allocation at a similar age" I didn't invest until I was older, but it went like this: Oh my goodness, I have money now. I know money always loses value over time due to inflation. I should invest my money, because stocks and real estate don't lose value to inflation like the dollar does. The classic investments for Americans building wealth are real estate and the stock market. I can't afford a house and don't want one where I currently live anyway. I'll invest in stocks. Bonds and other conservative assets like gold generally grow slower & are more suited for risk-adverse retirees, so I'll just stick to stocks. I want what will grow most over the next few decades, so, stocks. I'll max out a Roth IRA and then put the rest in a brokerage account. (Contractor business income - no 401k.) I'll invest in broad-based ETFs with diverse holdings so that no one company falling apart can hurt me too badly. I'll invest in ETFs holding USA stocks even though they are overvalued because the markets believe in American Exceptionalism and USA stocks bizarrely keep growing faster than everywhere else. That went well. Oh my goodness, Trump was RE-elected. American Exceptionalism is dead. I'll shift my money into broad-based ETFs holding non-USA stocks. That went really well. Hey, look, a reddit post I think I can answer helpfully.

MarketObserver_IN

At 23 with Roth maxed and 401k funded — you're already ahead of 95% of people your age. The $85k HYSA question is the right one to be asking now. \*\*Answering your questions directly:\*\* \*\*Cash vs invested ratio:\*\* I keep \~6 months expenses in HYSA/cash (emergency fund, non-negotiable). Everything above that threshold gets invested. At your age, you don't need more than that in cash. \*\*What to invest in:\*\* Broad index funds — VOO (S&P 500) or VTI (total market). Trying to pick winners is a loser's game for most people. The data overwhelmingly supports index investing over stock picking for long-term returns. \*\*Mental handling of dips:\*\* This is the hardest part and the most important. The trick is to pre-commit to not checking your portfolio more than once a month. Dips \*feel\* terrible but are statistically meaningless over a 20-40yr horizon. Automate your contributions so emotion is removed. \*\*Lump sum vs gradual:\*\* At 23 with a long runway, lump sum historically outperforms dollar-cost averaging \~2/3 of the time (Vanguard's own research confirms this). But if it helps you sleep and stay invested, DCA over 3-6 months is fine psychologically. \*\*Practical next step:\*\* Keep $30-35k in HYSA (emergency + near-term goals), open a Fidelity or Vanguard taxable brokerage and invest the rest in VTI. Then automate $500-1000/month into it going [forward.At](http://forward.At) 23 with Roth maxed and 401k funded, you're ahead of 95% of your peers. Here's a direct framework: You're already doing better than most people twice your age — seriously. A few thoughts: \*\*Yes, open the taxable brokerage.\*\* At 23 with a long time horizon, having money sitting in HYSA beyond your emergency fund is essentially losing purchasing power to inflation over decades. \*\*VOO vs VTI:\*\* Both are excellent. VTI gives you small/mid cap exposure on top of large cap — over very long periods the difference is minimal, but VTI is slightly more diversified. Either is a great choice. \*\*On the $85k HYSA:\*\* Keep 6 months of expenses as true emergency fund (sounds like \~$20-25k based on your numbers). Everything above that should be working harder for you in the market. \*\*Lump sum vs DCA:\*\* Research (including Vanguard's own studies) shows lump sum outperforms DCA \~2/3 of the time. But if the idea of dropping $50k+ at once keeps you up at night, spreading it over 6 months is perfectly fine — the psychological benefit of staying invested matters more than theoretical optimum. \*\*The real key at your age:\*\* Automate everything and don't watch it daily. The biggest wealth-destroying mistake is panic-selling during a dip. Set it, forget it, let compounding do the heavy lifting over 40 years. \*\*On the $85k HYSA:\*\* Keep 6 months of expenses as your emergency fund (sounds like \~$20-25k based on typical living costs). Everything above that is "excess cash" costing you real returns. \*\*Should you open a taxable brokerage?\*\* Yes, absolutely. \- Invest in VTI (total market) or VOO (S&P 500) — these are essentially equivalent, VTI slightly more diversified \- At 23 with decades of runway, 100% equities in a taxable brokerage is defensible \- Gradually shift toward 80/20 equities/bonds as you approach 50+ \*\*Cash vs invested ratio:\*\* Emergency fund in HYSA, rest invested. At your age there's no reason to hold more cash than that unless you have a known upcoming expense (house down payment, etc.) \*\*On handling dips:\*\* Automate contributions so you never have to "decide" during a crash. The worst thing you can do is sell during a downturn. Remind yourself: a dip just means your future contributions buy more shares cheaply. \*\*Lump sum vs DCA:\*\* Lump sum wins \~2/3 of the time historically. But DCA over 3-6 months is fine if it helps you stay the course psychologically. You're doing great. Open the brokerage, set up auto-invest, and let it run.

yamni_zintkala

If you want to diversify from a HYSA, then yes a cash brokerage is an option. Depending on the state you file taxes a muni bond ETF or mutual fund is a good option. A broad market mutual fund or ETF is also good. Then I'd look at the large cap dividend company stocks like PFE, GIS, VZ, T. Buy 5 shares a week. Collect all the S&P100 or 500 or 1000! Ok maybe that's ludacris. But you get the idea.

Legal_Potato_9063

Everyone here is right that $10k won't matter compared to your physician salary. But the best investment you can make with it right now is protecting your sanity during med school. Keep it liquid in a HYSA as your "I don't have to panic about money" fund. Financial stress during boards is the last thing you need.

Legal_Potato_9063

You're 23 with no debt, maxed Roth, and $85k in savings. You're not being too conservative, you're being smart. But yes, at your age time is your biggest asset and $85k sitting in a HYSA is leaving a lot of growth on the table. Keep 6 months of expenses in the HYSA as your emergency fund. Move the rest into a taxable brokerage gradually. Dollar cost average into VOO or VTI over 6-12 months if lump sum makes you nervous. Historically lump sum wins about 2/3 of the time, but DCA lets you sleep at night and that matters more than people admit. At 23 a market crash is actually a gift. You have 40 years of compounding ahead of you. The people who get hurt by downturns are the ones who need the money in 2-3 years. You don't. Don't overthink it. VOO and chill.

HVVHdotAGENCY

Interest is interest. Marginal gains on your capital are where the difference is made in the long term, so it’s always better to clear debt, even a low apr like that. The only reason you might not want to fully dump into investments would be saving for a large purchase like a down payment on a home, but otherwise yeah, I’d just invest it. You mention opportunity cost, and sitting on that much cash in a HYSA is peak missed opportunity. If you have more specific questions about ETFs, indexes, or other ways to invest, feel free to ask. You might want to see what the market does in the next week or two w the Iran war, etc, but you can always DCA into whatever you decide to invest in over the next couple months if you’re worried about timing it. If it’s for FIRE purposes, I wouldn’t sweat it too much and just pick something that fits your risk tolerance and keep adding as much as you can

Gigawatts

That's your emergency fund. HYSA

mushy-shart-walk

HYSA. You literally can’t lose.

19kjc87

An HYSA.

AtHomeWithJulian

There's no reason to have that amount of money in the HYSA, you are essentially leaving substantial gains on the table. You want 6 months to a year of expenses in the HYSA, then pay off all debt and then everything else should go into your taxable brokerage, in that order. It's hard to answer your questions without knowing your risk tolerance and when you intend to possibly need this money. If you feel your income is stable and you have no foreseeable need to withdraw anything from your brokerage any time soon, then you can afford to put money into a more aggressive portfolio. The safe and easy long term plan is to put it all into VOO.

Aggressive_Finish798

Do you plan on having a need for that 85k in the next 3-5 years? If not, I'd start investing it. I keep a years worth of expenses in my emergency fund (HYSA). Before you start in with a brokerage, are you maxing the 401k with just 6%? I'd max that out before the brokerage. Max your HSA too if you have one. The brokerage would be the final bucket if everything else if filled (or on track to be by the years end).

HVVHdotAGENCY

85k in a HYSA is silly. Pay off your car, leave a six month emergency buffer in the HYSA and invest the rest. Find a vehicle that matches your risk tolerance, but for most folks that don’t want to pick stocks or dig in too much, an sp index, sp equal weighted, full market index, etc, are an easy, solid choice

Positive-Tourist-319

I keep about 100k in HYSA because that’s what makes me comfortable if I lose my job. Wife doesn’t have a large income, 40k. So our lifestyle is largely dependent on me. And then in my investment accounts I keep around 20-30% cash to put into opportunities when I see them. Like NOW, Netflix, Microsoft, etc

lesteroyster

HYSA. Also in your free time, of which you will have little, read up on topics on boggleheads.org - the website, not Reddit - to have a foundation on investing once you are in a position to start investing.

BigDipper0720

CD, HYSA, or T-Bills.

WMan37

* Finally get into investing at the start of this year because fuck it, my job gives me a 401k plan with fidelity where I get an extra 3% of everything I put in because I chose to allocate 6% * Within days my shares depreciate like a collective $200 in value even though I diversified, which is like 50% of what I put in * Feel like a sucker and I'm currently waiting (hoping) for them to go back up to at least a point where I can break even * Go to report my taxes on TurboTax the other day It doesn't make it super clear how to report gains from sold shares, meaning I'm worried about that too when it's no longer de minimis. I can now absolutely see why people call it gambling. I should have just been happy with the 3% APY returns from a HYSA. That'd at least be upward-ish enough momentum to pay for a trip to the gas station every month despite inflation taking a chunk of buying power anyway. Feels like gambling, because I did the right thing and actually tried to look into companies I was investing in, followed places on the internet like here to get a broader scope of discussion surrounding this, consumed a lot of investing based youtube content, and even then I still got screwed over a bit. As an example, [AMD beat earnings](https://www.investing.com/analysis/amd-beat-earnings-by-600-million-so-why-did-30-billion-disappear-200674451) and their share prices *tanked.* Then I bought 1 share of VOO to test the waters since people say that's what to go for, and then it tanked 10 dollars the next day and hasn't really yet broken even. Tried to get into metals after reading news articles, so own shares of silver and gold, tanked and hasn't reached purchase prices yet. When a company does well and still gets reamed, and you do research and it doesn't feel like enough, it definitely feels like gambling. At least I didn't put anything in I wasn't ready to lose, but it still feels bad. People act like it's this super approachable, easy thing, but you get a mountain of so much conflicting information and it feels like just taking potshots in the dark, I'm probably not going to be investing much after this. The only thing that has earned me minor amounts of upwards momentum is FXAIX and even that makes like a few cents of overall progress while wildly fluctuating up and down. Maybe it's because I'm new to investing, but so far I feel like the time I spend trying to follow the stock market would be better spent just doing uber/doordash/instacart, etc. as a secondary source of income.

MrMaxMaster

If you need the money to be generally liquid for use then keep it in a HYSA.

RedditIsAWeenie

The HYSA is basically deciding to just stay ahead of inflation rather than get ahead. Over the long term, 20+ years, the stock market has never lost money. When you are 80, you probably don’t have 20 years to invest, so this makes sense for them. At this point, we are admitting they are not planning for legacy wealth, which would be most people.

Hot-Yam-444

+1 for SGOV, current rate last I checked yesterday was 4%! And you don’t pay tax like you would with a traditional HYSA through a bank

Obvious-Row-2319

We have an IRA at work that’s available for everyone with a match from our employer. Myself and another supervisor are the only two people who take part in it. Constantly we try and tell the others they should do it too. I’ve heard every excuse there is not to but mostly people say they need the money even though it’s taken out of our checks before taxes with such a small % that there’s no noticeable difference in pay. Everyone seems to think that they can get better returns saving there money in a basic HYSA. It’s something that frustrates me to no end because these people are so young if they started with the Ira now they would have a nice bit put back when they needed it. It’s truly baffling to me the mistrust and just general ignorance about how it all works.

Peppertheredfox

Smart to diversify. Gotta stash the gambling wins away somewhere and HYSA aren’t covering inflation decay

New_Sport_8490

If you are nervous, use stop limits. Not foolproof but will prevent a complete flush. I have majority invested, but in dividend stocks…boring I know but much better tax rate than savings.Rolling 1 month treasuries to meet needs and a little more juice than HYSA. And 2 months cash in hysa.

AverageCatsDad

3-3.5% is essentially zero relative to inflation after taxes on the gains are taken. So if you never want to have your capital work for you then go with a HYSA, but given we live in a capitalist economy where proper allocation of capital is rewarded I would not view a zero relative to inflation as a good investment for anything more than an emergency fund.

Crazy-Cat-Lad

I hear ya. I like the idea of HYSA too because even if the APY goes down, your bank account isn't going to crash like a stock could. I just dont put all my eggs in one basket. Banking at WF, Paypal/Openbank for HYSA, Fidelity for stocks, 401k elsewhere thru work. (Im new to stocks) 

UnicornMilking

I am such a pussy slut for the 4.5% I am getting in HYSA that I refused to full-port oil and have missed out on a free $16,000. Is it too late, is everything priced in? Chungus life.

max1030thurs

If you’re only getting 3% on cash, you’re basically just keeping pace with inflation. And if the market crashes, your cash loses value too, but you also miss out on 5–10 years of compounding interest. An S&P 500 ETF like VOO has tracked the index almost perfectly and returned around 16% annually over the last five years. HYSA CASH 100k in 5yr = 116K VOO ETF 100k 5yr = 221K

snotick

Thanks. The funny part is, they have another $300k from the sale of their house. They were going to give him that money to manage as well. Not anymore. My mom currently has that in a HYSA. If I felt more comfortable with him and his fees weren't so much, I would have let him manage it. I think she's better keeping it where it is. I may end up opening a vanguard or fidelity account if rates drop.

Lou_Sassle

You’re comparing apples to oranges. Your 401k is an investment retirement account, not just an inflation hedge. You can pay the full amount into your 401k and also own a home. The point I’m making with the HYSA example is that inflation absolutely does make a mortgage more affordable than you think, and is far from “mental gymnastics”, it’s basic economics. You are not actually “paying double” when accounting for inflation. I think we will just have to agree to disagree, respectfully. Your response moreso reads like you cannot afford a house, and are bitter about it. I bought a home that I can afford, and I have emergency savings (6 months). And if like takes an unfortunate turn, you can always sell your house, you are not shackled to it for life (like a “debt slave”). And more often than not, it has appreciated in value when you sell. In fact, I plan on selling someday and using that money towards a down payment on a nicer home hopefully. Hell, I could even rent this property out to someone someday for additional cash flow. Now buying a home that you cannot afford is a whole other conversation - THAT is a poor decision. If you are making the argument that the housing market at this time is unaffordable for the average American, I can definitely agree with that. But mortgages being a total scam that forces people into insurmountable debt, we can agree to disagree on. Also, if you are arguing communism vs capitalism, that is a whole other rabbit hole discussion.

Ok-Economist-7646

Inflation is eating your savings account. All of it. 5% cash for opportunities. 6 months of expenses in a HYSA.

QuirkyGlove3326

If it’s in stocks, it’s not liquid. I keep a buffer of 6 months of living expenses saved in a HYSA in case I get laid off or have a big unplanned disaster bill.

Lou_Sassle

That’s a bit of a false equivalency. By that logic, you may as well keep your money in a safe, instead of a HYSA or S&P 500. You don’t seem to mind inflation eating away your savings. It’s a straightforward concept honestly.

True-Buffalo-6609

You're balancing well retirement savings, EFTs, and HYSA for a house fund. That's smart. I do the same core in EFTs, but I keep a portion allocation outside equities so I don't stress about short-term swings.

anerdknownaswill

Hey man it sucks you lost all that money but $6k is still more than the vast majority of people have to their name at your age and you can make the money back if you keep working. You need to quit trading until you have a better handle on it though. Until then just open an IRA and try to max it out every year and put your other savings in an HYSA

Majestic-Bass6772

MSFT underperformed a HYSA 😭😭

ski_town

95% invested in market, 4% HYSA, 1% checking account

ebing_86

I've thought about the same move. HYSA gave me peace of mind, but my yields felt low. I shifted part into Schwab's Fund for liquidity, while keeping a portion in long-term, such as real estate exposure. That way, I had cash accessible but also something compounding quietly in the background.

spik_n_spinez

I have 6 months worth of emergency savings split between my bond ETF and HYSA and the rest is in the stock market mostly in ETFs and about 10% in Nvidia and Google.

elkomanderJOZZI

Your claim of financial literate or not is clearly wrong. Yeah, like I already said, if it came down to it, sell the stocks. My money did way better invested during this crazy bull market than having it sitting in some “risk free rate” or HYSA

Head_of_Lettuce

The money is “sidelined” (actually, sitting in US treasuries or a HYSA earning the risk free rate) because it’s serving a purposes. It’s a hedge against life’s risks. If my car explodes, the hot water heater breaks, I lose my job, etc, I need access to immediate liquidity. What if the market turns a down turn and I need my cash? The money I needed to pay for those things has lost value, but I have to sell it. And now I’m selling at the worst time. We’re right back at square one where this conversation started.

elkomanderJOZZI

Bro dont listen to that guy, invest all you can. At most keep a months worth of expenses in HYSA

Zeitzen

To add to this, you have to consider how your debt is essentially inflating away. I don't think there's a specific verb for this in English, but in Spanish it's called "licuar la deuda". It refers to the process where inflation reduces the real value of a fixed payment. Because your nominal income rises with inflation but your mortgage payment stays the same, the debt effectively "shrinks" relative to your purchasing power. At the end of the day: 1. Having a house gives you some semblance of stability and housing security 2. If your APR is lower than what you can get from investments (even if it's a HYSA) then you take your time paying it since you get more out of that than paying your mortgage early money-wise 3. If your APR is higher than what you can reliable/easily get, then you put extra money into your principal every month, essentially making that money give you your APR in now-cancelled interest. If you're trying to make money, and assuming house values at least remain the same while adjusted for inflation, you're betting on inflation rising and/or the mortgage rate you can lock in being really good. And that doesn't even cover the mental benefits of knowing you'll most likely have a roof over your head and are not at the mercy of your landlord. Having said that, I don't think housing should be an investment vehicle, but that's another issue. Realistically to change that you'd need long term government policy to keep prices frozen and let inflation depreciate them until it balances out, but if you do companies would drop their inventories on the market and cause a rapid decline possibly causing other issues...

username_taken1776

The guy is 26 and has $225k saved between his HYSA, roth, and 401k. If you remove the kids of billionaires from this calculation, that leaves OP in the top 0.01% for his age group. OP is just bragging.

Forsaken_Country_631

But if you’re trying to buy a house then it should stay in a HYSA just in case the market dips

Square_Buy9371

i am 95% invested. the 5% in cash in a HYSA is enough to cover 1 year of expenses if absolutely needed. i basically go pay check to pay check all in on expenses and investing every month without saving any cash.

syunsquared

I’d recommend skipping the prudential advisor and any financial advisor. They’ll just eat up your cash on fees. Skip the annuity. Open an account with Schwab, Fidelity, or E*Trade. Without knowing your investment objective, risk tolerance, time horizon, conservatively, if you need a $1,000/month for living expenses, you can put $300k in a HYSA that gives 4% interest (at least for the time being while you can still get 4%). Invest the rest in SPYM (smaller expense ratio than SPY), VTI, QQQ, or a combo of these. Set it up for dividend reinvestment.

Comfortable_Yam_9391

I’m sorry this happened to you it’s a brutal market. Do not use this money on options unless you want to ruin your life. I would try to take a step back and focus on what matters most, which is the health of your baby and your wife, so probably make sure that you are covered for the health insurance related expenses that are on the way. I don’t think you should invest any money in the market at this point given your situation, and if these gains are long term, start looking at migrating your investments into HYSA so you can retain what you have to stretch it as far as possible.

Grape-Plenty

I have 6 months of living expenses plus any near future expenses in a HYSA. Everything else is invested

AtHomeWithJulian

I'd say putting that money into the market is a risk you can't afford currently. Try to find employment and keep that money in a HYSA.

Fun-Personality-8008

$50k efund in a HYSA then everything else goes to stocks

partypantsdiscorock

I mean depending on account size, it can make a difference over the long term. But personally I keep a few months in HYSA at 3.3%, some in SGOV at a little higher rate, and some in higher interest securities.

garulousmonkey

I have about 10% of my monthly cash flow that O invest monthly. Free cash total is around 80%.  I have a 2 year cushion in a HYSA.

NatasEvoli

Absolutely. And with a HYSA you can at least still get a 3-3.5% return on it. So not an optimal return but not 0.

TheSleepyTruth

I have only enough in checking account to cover my immediate upcoming bills (at the moment 2k in cash, keep as much as 10k if its right before mortgage and car payments are due), and have all savings in brokerage. I have enough cash flow and job security that I believe having an emergency fund is not necessary. I can use credit cards to cover any unexpected expenses in a pinch and just pay them off later in the month when I get paid. In the incredibly unlikely event I lost my job I could just liquidate some stocks to cover expenses and would still have made more profit than if that cash was just sitting in a HYSA "emergency fund" over same time period. For people with less cash flow or less secure job field, I wouldn't recommend being quite this aggressive though and having some level of cash emergency fund is typically recommended.

bobby1128

For ne, HYSA covered the short-term needs. Fundrise was the solid alternative I used for growth, since it's structured real estate exposure that doens't depend on interest rates.

Various_Couple_764

If you look away from money market accounts, HYSA, and government bond funds you can get dividend funds that have yields of 5 to 10%. Dividend are cash payment made directly into your brokerage acount. You don't see the dividend stock together the money. I a retired and living off of my dividend inomt of 5K a month. Funds I am using are QQQI 13% yeild, ARDC 9%, PBDC 9%, EMO 9%, CLOZ 8%, UTF 7%, UTG 6.4% JAAA 5.5%.

AtmosphereFun5259

I guarantee I would in Mexico lol. I have enough money to build my house out there already. The 1 mil would just be put into an investment account or a HYSA and bro I’d be SET easily

harrison_wintergreen

how much money are we talking about here? on the one hand, I get it and sympathize with the goal. on the other hand, the dollar amount matters. if you have $5,000 in this savings account, the difference between 3% and 4% will be about $50/year. not a life-changing sum. I know people who burn $10,000 worth of brain calories to get $500 worth of interest yield and credit card rewards per year. it seems like a wasted effort, a very stressful hobby with spreadsheets. they could earn more cash with an overtime shift every month, but seem to enjoy gaming the system and feeling clever. so keep things in perspective. but for all I know you have half a million cash and 1%/year will be a substantial difference, in which case go nuts. ETFs with "collateralized loan obligations" and "floating rate debt" are not guaranteed and have a more risk and potential tax complexity than HYSA. but they are relatively stable and tend to have a price that hovers in a certain range over the long-run. the yields can be attractive. JAAA has a ~5% yield, JBBB has higher risk CLOS with a 7% yield. FLRN has a yield in the 4-5% range. for a few examples.

TheP4rk

HYSA/CD's are mostly used for shorter term investments or Emergency funds. Something where you don't want any risk of losing value and have pretty quick access to it. Emergency Funds, Down payment funds, weddings funds, travel funds stuff of that nature that might have a couple year timeline and wouldn't benefit from a long term trend line if a bad year were to happen.