HYSA

Capital_Math98

Hello, I am 25M currently living (renting) in Bay Area, California with a job in IT sector. I have $70k cash sitting in an HYSA account and about the same amount also invested in tech stocks. I already have a sufficient provision for medical expenses and don't have any upcoming major expenses like marriage, primary home buying or kids or moving states for next 3-5 years. I want to invest it right now so that it ripens 4 or 5 years down the line when I transition to a more family oriented (having kids) phase. I am thinking: 1. Buy a primary home in Bay Area California, ideally a 2B2B and move-in to stop the rent payments and let the investment appreciate. 2. Buy a home in some other state like Texas or North Carolina and rent it out. 3. Invest it in index funds like VTI or QQQ and let them grow. I feel #1 is far out of reach considering how little I'd be able to put towards DP in California. The interest payments will eat up a major chunk of my current salary. I'm tad-a-bit more inclined towards #2 since it'll give me a stable growing second stream of income after 3 or 4 years (considering I can refinance the home at a lower interest rate in future & rental prices increase in that market). #3 is a safe and chill option which will give me liquidity, peace of mind and is low-effort. Would like to hear your opinions and also hear if there are any other strategies which I should consider. TIA.

entrovertrunner

Will your parents pay for your education/rent if applicable? If so I think it would.be good to invest part of this money (say 6k) If you have to self sustain during uni, HYSA.

OkApex0

FYI, HYSA stands for high yeild savings account. A bank account that pays around 4% interest annually is common. If you think you'll need this money in the next year or two, I'd say HYSA is the best route for you. If you can possibly wait longer I'd just put it in an SP500 ETF fund, such as VOO. Of course, the best possible scenario is you put it in the SP500 and forget it exists for the next 40 years. At 8% annual growth you'd have $180,000 at age 58.

-JPowsMoneyPrinter-

You could buy bonds or put it in a HYSA. If you are going to rely on this money down the road dont put it into indexes or equities. There is liability in the market going down and not having access to all of the cash you have now.

HoldTheHighGround

I'd park that cash in a HYSA and wait for the crash. You won't be waiting for long.

redhtbassplyr0311

>Would bitcoin be best to throw 64k into right now, when to sell, what I’m risking etc. This isn't a simple question and providing you a simple answer will just end in tragedy. If you don't understand what you're buying, you're not likely going to hold on to it. It's about one of the most volatile assets besides meme stocks you can invest in as of right now at least. $64k could turn into $32k within a month. The only way to prepare for that is know what you're getting into. If you don't you'd probably end up scrambling watching the value drop and selling for a loss. Do some more research before throwing $64k at something without any knowledge. I wouldn't even invest a dollar in Bitcoin without knowing what you're buying. Once you understand it, you'll be able to answer the question yourself. >"what would you do?". Not do what you're thinking about generally speaking. The only thing I'd agree with here is yeah having $200k in a HYSA doesn't make much sense. Yes, hysa's have good rates now but not as good as the market would return over a long period. Depends on your age though too. If you're living on fixed income at $90k a year you may be tolerant of having a little more aggressive investments and having your money in the market. All circumstantial and individualized. Hard to make any recommendation here with little to go on If you want to buy a Tesla model x Plaid, nobody is stopping you, but nobody could tell you that is a good financial idea logically. It's a decision based outside of logic and just a want and desire that is on your personal bucket list. It's not an investment and it's a liability in more ways than one. No financial advisor says go buy a brand new car you don't need. >And the bonus question is would you consider a lease in my situation ? You're throwing away money always and since you don't need it and if you're willing to give it up at the end of a lease term, then maybe it's worth considering but it's still just money going towards nothing. Psychologically it may make you feel better with spending less monthly, but you're not building any equity either. Valuations don't seem to hold up though too well on Tesla's anyways so maybe this would be better answered in a Tesla subreddit from someone who can weigh in on their experience with Tesla depreciation and resell values.

FxHorizonTrading

Onto a HYSA..

Benji2108

For what it’s worth, I’ve owned for 15 years in Portland metro area and recently sold. I have similar savings and actually enjoy renting a nice townhome while watching my money grow in a HYSA at 5.25% (Jenius bank). It’s a pretty cool feeling to make that kind of money on interest alone while not having a high interest rate on a new home right now. Sure, there’s things I miss about owning a home, basically the floor plans only. Otherwise, I find so many pros in renting apartment/townhomes etc. it’s also kinda nice to get a change of scenery every couple years if that’s something you’re into. Don’t overthink it, just go with what you actually want in your life. I was born and raised in Scottsdale myself. It’s beautiful! Hot as hell tho lol.

Kryogenic7

If you really need ALL of it liquid, a high yield savings account (e.g., Ally Bank) would be good. If you only need some of it liquid, I would maybe do 1/3 in a HYSA like Ally and 2/3 in a 6mo CD to ride out the election. If it's a blue president, the market might have dropped and you can buy into an ETF for stocks or bonds with a Charles Schwab IRA or taxable brokerage (depending on how liquid you want it). If it's a red president, the market probably saw a little jump in price or is doing about the same so you can choose to buy into an ETF or just roll it into your HYSA.

Angel_Moonglow

What in Yevon's name... Blimey at that point, yeah just stuff your money in a CD or HYSA and once you're bearish on $YOLO, start small or with paper trades before getting back into options.

BlackBastado-2124

In HYSA?

CleanFlow

You could do a CD "ladder?" I think it's called. Put 1/6 of your money in a 6-month CD. Next month do another 1/6 into a CD. Do that every month and after 6 months you will have all your money invested and every month you have access to 1/6 of your total while keeping it all invested. It just do a HYSA in Marcus at 4.4% and be done with it.

this_barb

Well, if you need it liquid, you only have a couple options with the easiest being HYSA. If you can afford a lockup period, VOO. 15 years @ 10% = $800k. Even locking it up for 10 years = $500k.

isaacbunny

Your historic gains and losses have nothing to do with whether it is smart to sell. Rebalance as much as you need from your brokerage to your HYSA to match your risk tolerance. No need to wait.

CGonzalas

HYSA generally give less interest than inflation so your emergency fund is not actually growing as the price of emergencies are increasing faster than your interest rate. If your emergency fund is properly calculated then you should just leave the money to accumulate and at some point add more to make up the difference in inflation.

skynetsatellite013

Unless your HYSA emergency fund is outpacing inflation you ... don't actually have any extra money.

Kind-City-2173

Don’t put it in a HYSA. Put it in a muni or federal money market fund instead. Far more tax efficient

Cruian

>it’s extremely disappointing and it’s because it carries so many losers in the pool of assets it invests in. This is true of the US as well. Most stocks everywhere don't beat Treasuries. >The ten year average return on it right now is 4.48% per Fidelity which to me is not worthwhile at all when HYSA or Ultra Short Bonds can go 4.5-5.5%. That is looking backwards. We can only capture the future returns. Those can be very different.

sealth12345

Depending on the state you live in, T bills aren't bad right now. Pay more than HYSA and avoid state tax.

Chart-trader

We have a certain savings target from our income: Once we reach that goal every year we set the additional money into a "fun account". The fun account is for bigger purchases like cars, renos etc. For investment, retirement accounts we have a pretty strict target of 10% gain per year. Once we reach that we put any additional gains into a "I love stock market crashes" money market account. That money only gets reinvested if an index drops 20%. It helped us get out of the 2021 drop quicker because I put that money into large caps early 2023. Now to your question. Any additional HYSA money (other than investment accounts) goes towards our emergency fund. If it is already fully funded, because we did not have any emergencies like a new roof, we actually spend it on fun stuff. One can over save money. We make sure it goes away.

Torkzilla

I own VXUS as my main international position and I’ve been thinking about doing something completely different either focusing more on international value or specific international regions or close out the total international market position entirely.   VXUS has basically not exceeded the returns of a HYSA in years, it’s extremely disappointing and it’s because it carries so many losers in the pool of assets it invests in.  The ten year average return on it right now is 4.48% per Fidelity which to me is not worthwhile at all when HYSA or Ultra Short Bonds can go 4.5-5.5%. I want to keep international diversification but it is hard to find winners in ex-US funds.

fortheculture303

CDs or HYSA I guess

No-Improvement3164

I don’t know. Temping sell a bunch put back in HYSA til a direction is picked

Kronodeus

This is a really dumb/poorly phrased question, man. You understand how much profit you can make depends on how much you put in, right? You haven't said anything about how much capital you have to invest, your debts, your risk tolerance, etc. Do you have $2 million? You can make $80k a year easy from a HYSA. Do you have $2,000? Good luck pal.

AICHEngineer

As a digital bank, I've been very satisfied. Decent HYSA yield, instant transfer from savings account to checking, good perks, can transfer decent sums of money to loved ones (5k a day is my limit) via P2P. Debit card is slightly better than cheap plastic. Their loan services are predatory and dumb, rates are dummy high. The investment platform is mid at best. It's kind of like a Robinhood wannabe by trying to gamify, but it has no substantial future there imo. Customer service was good the one time I needed it. Basically it's just a nice digital bank. The rest of its services are mid at best.

_lliilliiill_

That's not even a good return. I would consider profiting off genocide on the hush hush if it was like 20%, but 2% over a HYSA is just violent.

Fantastic_Mention261

For the younger kids she could do CDs or put the money in 529 accounts for them. For the older kids she could put the money in a HYSA for now and write a check for Christmas. Savings bonds are also a nice option if she doesn’t want them to spend it right away. My grandma used to give me $50 cash and a $50 savings bond for my birthday each year. At 35 some of them are matured and a few still aren’t. She’s gone now, but I’ll be getting birthday money from grandma for at least ten more years. That’s kind of cool.

greytoc

Yes - it can be appropriate to use a brokerage account to generate cash yield instead of a savings account. That's what I do since it's more flexible than a savings account. And it can generate a higher risk-free yield than a HYSA. Also - money market fund generates distributions which are treated as ordinary income interest. But in some cases can be more tax efficient. Like all brokers, you get a 1099-B and 1099-DIV form to do your taxes. A money market fund like Vanguard cash settlement federal money market fund will also hold some percentage in US government obligations which are state tax exempt - it can vary each year. For tax year 2023 - it was 49.37%. Vanguard and other similar investment managers will publish the percentage for their funds each year - the Vanguard version is here - [https://investor.vanguard.com/content/dam/retail/publicsite/en/documents/taxes/usgoin-2024.pdf](https://investor.vanguard.com/content/dam/retail/publicsite/en/documents/taxes/usgoin-2024.pdf) For more information on money market funds - see the FAQ here - [https://www.reddit.com/r/investing/wiki/faq/#wiki\_what\_is\_a\_money\_market\_fund\_and\_how\_safe\_are\_they.3F](https://www.reddit.com/r/investing/wiki/faq/#wiki_what_is_a_money_market_fund_and_how_safe_are_they.3F)

AnotherScoutTrooper

put $15k in a HYSA in case anything comes up medically, put the other $5k in TSM, either direction, because it’s guaranteed to take your money

milksteak122

Is the goal to preserve the wealth, have it grow some, have it grow a lot? If you want to be extra conservative You could put it in a HYSA or money market fund to get 4.5-5%. At 4.5% your dad would get $3,750 per month. You could put some in cash mentioned above and then put some of the money in an S&P 500 or total stock market index to conserve some of that money and have some of it grow. Putting it in

AssistantAcademic

Safe? Split it to 4 banks (fdic insurance covers 250k) and park it in HYSA or CDs You’ll get about 5% guaranteed The ETFs & S&P is better for growth but you’ll get decent returns these days with guaranteed money

Alarmed_Reporter_642

You don’t have to apologize. We are a supportive community. Keep $2k in a HYSA. Put $5K into VOO dollar cost average so $1k a month. And put $1k into SCHD over 5 months, and finally $1 into QQQ over 5 months. Use a broker that allows fractional shares like Fidelity. Do not dividend reinvest. Instead use everything from SCHD and rollover into VOO.

ImNotHere2023

Keep at least $100k in bonds or a HYSA - based on your numbers, that's enough that they can wait out 2 years of market turbulence without having to sell at a major loss. Depending on risk appetite, the rest can go into the S&P, but it's also fine to do 60/40 or 70/30 with bonds.

nerdinden

Standard Blueprint: [blueprint](https://imgur.com/lSoUQr2) 1a. 3-6 month Emergency Fund HYSA 1b. 401K deducted from your paycheck automatically ($23,000 limit for 2024) 3. ⁠⁠⁠IRA ($7000 limit for 2024) Traditional means pay taxes later or pay taxes now (ROTH) 4. HSA - if applicable, 2024 limit: $4150 for single, $8300 for family 5. Individual Brokerage Account: ie Vanguard ETFs- VTI, VOO, VTSAX, VUG, SPY (r/bogleheads) or other ETFs JEPI 5a. Stocks or bonds or Crypto 6. Real Estate 5 and 6 can be in parallel or switched.

Kindred87

Money market fund. It has generally the same level of liquidity of an HYSA but with higher APY.

GaylrdFocker

You can transfer money from a HYSA to your local bank if you actually want to go in person, it takes 1-2 days. Not sure if that is really something anyone needs now though.

YourGuardianAngel_12

I think a HYSA is more convenient and accessible than OP realizes.

YourGuardianAngel_12

If your local bank is offering a solid rate, I see no reason not to go with that as you are more comfortable with it. Otherwise, I’d just suggest a HYSA at an online bank.

dragontamer5788

Money Market Funds offer slightly higher returns than a HYSA, at slightly higher risks (loss of FDIC insurance). In practice, some people can make strong arguments that the daily-loans and 1-week loans found in typical MMFs (like VMFXX) are safer than HYSAs (which behind the scenes may invest into riskier assets, like mortgages in practice). I use SWVXX, because TD Ameritrade / Schwab prevents trading of any other MMF on their brokerage. Still, SWVXX works fine (5.2% right now)

izfanx

I keep mine in an HYSA with no issues. If you're fine with missing the gains and let inflation eat away the value by all means, just store it in a normal savings. MMF in a broker will have a similar turnaround time as an HYSA with online banks so no point considering that either.

Cloud_Chamber

You can get a better rate in a HYSA right now, with less risk on capital.

CarBuyerinNY

Over 40, employed, no significant debt. I have over $70k in a traditional Chase savings account earning little to no interest. I'd like to move the bulk of that into either a Money Market Fund (like VUSXX) or a High Yield savings account (like AMEX). This is money I intend to save/grow long term - I don't plan on touching it anytime soon. Just FYI, I plan on keeping some money in that traditional savings - it's where my checks are deposited and I frequently transfer to/from that account to checking, etc. I'll keep 3-6 months worth of expenses readily available. In addition to this account, I already have a traditional IRA, as well as a separate Chase brokerage account where I've invested primarily in VTI. I've heard pros and cons for both options (HYSA are "Safer," MM have a higher yield, etc), so I'm just trying to get more input. Sadly, Chase does not offer a HYSA, but I have a 20+ year credit card relationship with AMEX, and I've been considering theirs if I go that route. If I choose the money market, I can stay with Chase entirely. Thoughts?

saysjuan

Money market or high yield savings account. 5%+ in a HYSA with zero risk much better than you can expect in the S&P right now. Remember the old adage “Sell in May and Go Away”

isaacbunny

Staying put saves you the most money of course. You’re paying less than $200/mo in interest, which is crazy cheap rent. This gives you the opportunity to save lots of excess income (with historically HYSA returns too), so you can take your time and keep your powder dry for your next house. No hurry, you have a good thing going. When you do buy your next house, consider the following: - Selling your old house lets you put $150k in home equity toward your new (more expensive) mortgage. That’s $150k you’re NOT paying 7-8% interest on. (Unless you’re paying cash for your new house, but I assume that’s not the case.) - The $89k loan at 2.5% is very nice, but it is still a cost. - Being a landlord is a job. Do you want it? So… probably sell, unless you’re paying mostly cash for your new home and/or you’re starving for more income and relish the idea of being a landlord.

rznballa

Interest on HYSA's is variable.

Letsgitweird

Is my HYSA not safe?

Chart-trader

Money market. HYSA. Nothing else!

ww_crimson

$500k in an HYSA for 2 years is going to generate nearly $50k.

ohgeezeokay

HYSA SoFi @ 4.6% Or Wealthfront @ 5.0%+

TheWannabeVagabond45

T bills are returning quite well for shorter terms, better than HYSA. And no state tax on the income. Downside is a bit less liquidity, but doesn’t sound like you need it to be.

No-Meal-9019

My Story - Bought put on shit company SNAP After it jumped 30% and crossed 15$ it's now 16$ god knows Bought AMAZON AT 180 excellent results- not moving at all Bought IBKR AT 9 - started falling Bought OUST AT 9 - STARTED FALLING Bought SPY Put 500 - not touching 500 and JPow Meeting also gave shock Alresdy lost on NKLA not going now even to 1 What's wrong not a single trade moving to give any benefit Lesson - put money in HYSA Aand come back in June after SPY AT 480

slambooy

HYSA. 5+% make $1,500 a month while you wait

secret_configuration

VUSXX, TFLO or for a HYSA, I have been using CIT.

my_name_is_gato

Agreed. It's a rare scenario to be in, though I found myself there in my bumpy trading journey. High taxable income companied with more capital loss than I'll be able to carry over for my expected life thanks to a former advisor who was a Cathy Woods fanboy. It's better to ensure I burn though all of that carryover in addition to normal losses incurred in annual trading. Kind of silly, I know. It's not a serious strategy for the average person who can use it as a HYSA or otherwise a simple place to park cash not in use, but still highly liquid. With even modest enough quantities traded (25-50k+), it starts to make a small difference in taxes. Since we're all here for an edge, near risk free tax optimization is part of the game.

opencho

I get 5.13% in my [Brillant HYSA](https://www.brilliant.bank/saving/) account.

Furrier

Since you need the money within 3 weeks, put it in a HYSA. Then you can have a presentation about how putting money in the market with a three week horizon is kind of insane.

curefantastica

my favorite regards dont have a HYSA but buy 0dte

TheBooneyBunes

Don’t forget Uncle Sam is gonna want his cut come April, you may wanna just delete the app and put that shit in a HYSA or a bunch of CDs

Alarmed_Reporter_642

Invest 60% into real estate. Put 40% down so 300k down for $750k purchase price. Set aside 75k for closing costs/emergency fund. Take the cash flows, and invest 70% into stocks. Keep 30% aside in a bank. $750k worth of RE should be able to produce atleast $15k worth of cash flows. Refinance when rates drop. Cash out refinance in 2-4 years and buy more RE. Repeat the process above. Now you are left with $125k. $40k should go to VOO DCA. $35k should go to individual stocks. $25K into underperforming lump sum with price target to sell profits and roll over into VOO lump sum. Remaining $10k into individual stocks with a strong future. Think Amazon. Choose 3 companies and fractional share DCA over 6 months. $40k into HYSA.

MomOnDisplay

Today feels like the day I sell all of my stocks and put my money in HYSA. Tired of investing in risky volatile tickers like VOO and losing my money every single day

among_apes

If you go the HYSA route at least make treasury ladders and get the extra .4% and state tax exemption (if you have state taxes)

collin2477

it’s a SPAC… there’s a reason they were trying to pull people in with top of the market HYSA.

Investiv

Again, all your assumptions are wrong. Inflation may push earnings in certain sectors and industries higher, but not across all sectors. Even in sectors which are positively affected by higher inflation, that only translates into earnings growth if consumers continue to buy their products and services. Consumers are still buying those products and services, which is bullish. We are seeing organic growth across several industries, far exceeding inflation in many cases. We have also seen real wage increases, which takes a lot of the sting out of inflation. Not to mention, inflation is down massively since 2 years ago, so your thesis only makes sense if we get a huge reacceleration of inflation. Profits are much higher in several sectors and industries. You don't just get profit increases across the board. Some sectors and industries will do better than others, and some companies will do better than others within any particular industry or sector. Your last comment makes no sense. When inflation is dangerously high and bonds, money market accounts, and HYSA pay a lot of interest as they do now, people generally flee from stocks to those safer investment opportunities. The fact that the stock market has been going up since late 2023 reflects a general sentiment that inflation is coming under control and the risk/reward favors stocks over those "safer" investments.

JumpingJackx

Any bank with CD rate at 5% or higher. HYSA probably already yields 4-5% but of course has the advantage of being able to use it freely.

Drezzzire

HYSA APY=yes

tightbttm06820

Use short-term treasuries if you live in a high-tax hellhole like NY or CA. They pay as much as the HYSA, but you don’t have to pay state income tax on interest received from the federal government. You can sell whenever you need the cash or wait until maturity

UsernameIWontRegret

First off I’d say the 8 months of expenses in a HYSA is probably pretty high especially considering you have 2 months in your checking and are actively employed. There’s no magic number but that’s a lot of cash sitting on the sidelines for something you will likely never need to use. But you’ll have to do your own risk assessment there. Also unpopular opinion but I don’t think you should focus on maxing your retirement accounts. And this isn’t just you but people in general. Retirement isn’t the only thing to save and invest for. A new car, down payment on a house, a wedding, child’s education, even just having another safety net to pull from. I contribute to my employer match but then put the rest in a brokerage account.

BaconAvocado777

+2%. -2%. +1%. -2% Shits getting old…. Just raise rates gawdammit ! I want HYSA at 6%.

diverareyouok

Robinhood’s 5% HYSA is FDIC-insured to 2.25 million per account. I’ve been using them for around a year now and haven’t run into any issues. Most recently (January) I withdrew $25k for a trip. I had the money within the week and zero problems. Although be aware they charge a five dollar a month fee for Robin Hood gold, so if you won’t be making more than that an interest each month, you should look into a different option.

diverareyouok

I’ve been using RobinHood as my HYSA (5% APR) for the last year while I figure out a better long-term solution. FDIC-insured to 2.25 million via cash sweeps, and I’ve had zero issues withdrawing amounts as needed (most recently 25k for a trip).

AmZezReddit

Alright. I put in a lot of my play money this money into RKLB. Got ~20 shares. Long term. Next, I put a little more in KULR. looking to hit above 70 cents, short term of summer long term EoY Lastly, watching GDHG but I don't really know what else to look out for ATM, just been pushing my dividend stocks and HYSA. GLHF everyone!

-StandarD-

Also don't forget HYSA, park that money up there to have at least gains.

totosea

Easiest - HYSA, FDIC insured. More tax efficient (no state tax) - T-bills, treasury fund or etf like VUSXX, SGOV.

chronicpenguins

HYSA - but if you really want to squeeze every dollar look at the bonuses here and see if the opportunity costs (5.5% APR via Wealthfront) is worth it. For instance the chase 900$ bonus is pretty good but the Wells Fargo $2500 is worse than putting it in the 5.5% account https://www.doctorofcredit.com/best-bank-account-bonuses/

wontonforevuh

BOXX etf. Yields at about 5.5% similar risk to treasuries and 60% gains are taxed as long term. Equivalent post tax is in HYSA or money markets is over 6%.

BackOutrageous553

We were in a similar position and wanted to share a reminder / something we learned in case it helps - Don’t forget you have to pay TAXES on the interest you’re earning from a HYSA 😆learned that the hard way when we filed our taxes this year

junger128

Why pay your house down when your rate is lower than what you can earn in interest in a HYSA?

MotoTrojan

<1 year and state with income taxes? T-bills (exempt). <1 year and no state tax? Probably still t-bills due to yield, but HYSA/money-market if easier (lower rate). >1 year and modest/no state tax? Buy BOXX. Return will be similar to t-bills but you'll get no distributions and can just pay long-term cap-gains when you sell.

FTFWbox

Yeah. It's in a HYSA right now. It's a crap shoot. We would love to buy something now but there's NO inventory. The market is so stale.

CuteCatMug

33% online HYSA 33% 6 month CD 33% 12 month CD

Traditional-Flow-344

I'd say an HYSA, CD, or treasury bills if your timeline is within the next 5 years.

Unfiltered_America

HYSA, Synchrony has a decent one. Should get you $700+ a month until you purchase.

Gasdoc1990

Don’t think it has any extra services. But they marketed well. Got a ton of people to refinance with their student loans. A lot of those same people opened up HYSA with them. Their average consumer has a credit rating of 733 so they picked up a lot of high rating consumers. I imagine a lot of these people who have student loans with them, opened up bank accounts, will then likely pick up a mortgage with them. This is what happened to me lol. I like their product and I think others are happy with them too.

Mousetradamus

DCA. Leave the rest in HYSA

blaked_baller

IMO all those points sound pretty reasonable. It really just comes down to opportunity cost. I don't have specific experience with the home remodeling or potential business funds, but I think most people would split those accounts out separately from their "emergency savings", as they're not emergencies. So maybe start slowing building up funds for those purposes. Still fine to keep in HYSA of course, but probably shouldn't be included in that total for emergencies. The dream goal is to make your money work for you -- to make you more money with your money, of course. Historically the best place for that has been in the stock market. But we know the future is never guaranteed, so with that being said.. Especially with rates as high as they are currently, 4-5% free interest is nothing to scoff at. The past decade we were lucky to get 0.1%. So the trade off is really just are you okay with potentially missing out on 7-10% average annual returns from the stock market (potentially twice as much returns)? But if you have 401k, IRAs, and/or individual accounts rolling already then you're not missing out on too much. If not, I would definitely start looking into getting those situated appropriately for your current situation. Context: I'm only 26 and a random on reddit, so take what I say with a grain of salt, but I already can't imagine working till 60 like the norm so doing everything possible in my power to build up every nest possible to get outta the rat race. Definitely not a financial advisor but enjoy anything investment related. Hopefully something was useful :)

Embarrassed_Time_146

Don’t put it into VTI or VOO if that’s your timeframe. If you want your money readily available you can either keep it in a HYSA or. Money Market Fund. You can also use bulletshares ETFs to create a bond ladder. Those are funds with maturity dates. For example you can take 10k and put it in the fund that matures in 2024, 10k in 2025, 10k in 2026. You can then keep contributing and set the interest to reinvesting. When the 2024 fund matures, divide it among the other two funds, etc. If you’re gonna do this or somebody similar, or buy CDs, keep 6 months of expenses in a HYSA or money market funds as an emergency fund.

gilligan911

What is a good ~5 year investment strategy to fund a down payment of a home? In the US, I’m currently 25 with $35,700 saved in a HYSA earning 4.6%. $15,000 of that is my emergency fund. Is 5 years long enough where I would likely see positive returns in the stock market? Should I look to create a portfolio focused on bonds, or are bonds unlikely to out earn the current HYSA rates? Should I look into CDs closer to when I’m ready to buy? Additionally, the 5 years is a soft deadline. I could likely wait longer if I want/need to.

-IQ200

Higher for longer = long HYSA 🚀

blaked_baller

Pretty standard flow of accounts in priority order: 6-12mo emergency fund in HYSA, typically. More is fine, but 250k sounds a bit on the high end for sure but idk your situations. 401k company match, at the least. The more the merrier, if your 401k plan has good options. HSA, if applicable Roth/Trad IRA (can backdoor roth ira if over income limit -- think it's like 160k ish currently) Individual investment account Take a vacation every now and then, don't forget to enjoy life :)

Accomplished-Bar2602

I used to do something similar but not 0dtes. I'd do 2-3 weeks and try and catch 2-3% swings. My biggest mistake was not setting money aside from my profits. I lost everything and then some after 50-60% gains probably 10 times. I recently started again, and my biggest advice is to set aside at least half of your profits everytime. Put them in a HYSA or buy shares of SPY. That way, when it goes wrong, and it will, you can't lose it all

semicoloradonative

If you are saving for a house, then I would put it all into a HYSA until you reach your goal. If you don't need to touch that money, you could do a CD ladder with the funds over the next year, but I don't see rates going down right now.

Bennett-RF

Why all HYSA? take some of the money and invest long term in index funds like the s&p. You can have "gambling" money while also investing long term.

OkSir1011

HYSA

neolobe

Leave money in savings and watch inflation eat it away like moths. It's unusually to have %5 HYSA like we do now. We may have them for another year or so, but even that's not enough to not lose money. Nothing will make you rich that doesn't entail risk. At this point work on your skills, increasing them, being better in the workplace, earning more money. 20s and 30s are hump busting time. And if you do that, things will be really nice in your 40s.

CtheKiller

What is the benefit of investing it in spaxx when HYSA is paying 5%?

ButtBlock

I think that’s too much personally for an emergency fund. If you’re planning on a big expense then it might be appropriate. The most striking thing is that if you have 250k of cash, you really need to be paying attention to the best rate. I would set aside money you might need *immediately* in a HYSA, you can get HYSA at around 5%. This would be stuff like urgent home repairs, medical insurance out of pocket maximums, stuff like that. The rest, the portion of the emergency fund that’s funds that you might need available over a few months, open an account with TreasuryDirect and do rolling 4-week treasuries. Those are yielding 5.3-5.4% and they are state tax exempt. PLUS, you don’t need to worry about default risk as much. There’s no such thing as FDIC insurance limits for treasuries, because you are directly holding debt from the US Treasury. Whether it’s 20k or 250k or 500k, you don’t need to worry about splitting it up to stay under FDIC limits.

AICHEngineer

If you want true simplicity, you can take a target date fund set for 2025. It is a conservative asset blend of domestic and international equities plus a large portion of bonds. You could then withdraw from that. For example, ignoring your other assets, the IRAs alone can sustain double your current goal of an addition $2000 a month. If your IRAs were invested in a TDF (any horizon, the later the year on the target date fund, the more stock exposure it has. It will have higher returns but higher volatility) you could withdraw ~4,400 a month with a high degree of safety that you could sustain that consumption rate from the IRA portfolio for at least 30 years. This assumes 1.32 million at a withdrawal rate of 4% of its present value ($52,800 a year or 4,400 a month), and then adjust that value for inflation every year. Next year (if inflation is 3.5%), you would withdraw $4,554 after I flatiron adjusting by a multiple of 1.035. You have a lot going on, it may be worth it to sit down with a flat, one time check, fee fiduciary financial planner. Not a wealth manager, just someone who can help you parse out your assets and make sure you're *not being too conservative*. You have a lot of assets and can sustain a healthy retirement. Retirees like you can actually end up spending too little and forfeit higher quality of life (especially earlier in retirement when you're healthier and can do more activities). You can likely increase your spending and simultaneously leave a bequest. Or, you can start gift giving to elevate the lives of friends and family. Or you can go on some baller vacations. Side notes: You're holding waaaay too much cash, at least make sure that is in a HYSA, or better yet a money market fund. You have enough money that you don't need outsized exposure to riskier assets like equities to sustain future spending, but still. Too much cash decreases your portfolio longevity. The company stock is a sticky issue, it would be best if possible to divest from that as soon as possible tor educe your idiosyncratic risks as a couple and reallocate that money to diversified funds.

SirGlass

I am not sure what you are quite asking , there are ultra short term bond ETFs like SGOV (and others) that will return basically the same as short term 0-3 month treasuries currently its yeilding about 5.3% what will probably be better then most HYSA but remember this follows short term interest rates, if rates fall so will the interest generated by the fund

Odd_Negotiation_5858

If you’ll need the money for college or expenses in a year use a HYSA or but tbills or a related ETF (sgov, usfr, etc). If starting as a long term investment, start a Roth IRA at 18 as somebody else said. But the money in an S&P 500 ETF (VOO). Find a place where you can buy fractional shares. Keep adding. You’ll get amazing compounding over time

henrytbpovid

High Yield Savings Account (HYSA)