HYSA

TheDoodleWamboodle

Hehe I’m trying. Had a slow start (didn’t start making money until 28 when I finished my masters) So basically my 3.6% in HYSA doesn’t compare to average yearly returns of various funds? Right now I do - SP500, precious metals, technology fund, aerospace/defense fund, international, high cap market, and a gold miners fund. It’s spread out for sure. Is it too spread out? How’s the redundancy of SP500 and high cap market? Top holdings are roughly the same. Later in life, i plan on selling most for a high-dividend fund.

nirvana_always1

I posted that I didn't sell and was pissed about it. I bought some shares as it was going down but sold this week most of it and am going cash now. Good with only 25% stocks the rest in HYSA.

QVP1

You're gonna be a very rich retiree. :) After 401k and IRA are both maxed every year and you still want to invest more. A simple index fund in a taxable brokerage is all you need. If you use Vanguard, then VTSAX. If Fidelity, then FSKAX, but you could do VTI if you prefer. They're essentially all the same. I don't even bother with HYSA. You can get everything in a single brokerage. In either Fidelity or Vanguard, just buy the total market index fund, then for however much cash you want to keep in reserve, leave that in the money market fund. You really don't need to do anything else. You can also buy Treasuries and/or CDs in the same account too, but that's not really necessary unless you really want to lock in a specific rate for a specific pre-defined future expense or ladder for a series of expenses. I am 100% Roth IRA and a taxable brokerage. Nothing else.

findingmike

M2 money supply has grown, weakening the dollar against other currencies (DXY). At the same time people were worried about a bad US economy and pulled money out of the stock market (gold, crypto, HYSA, etc.). Since nothing horrible has shown up in the US financial market reports yet (there are bad things, but not horrible) and Trump has shown a tendency for chickening out when the US markets tank, the VIX has fallen as people believe nothing really bad is going to happen. So we have a lot of money that's been sitting on the sidelines waiting for things to stabilize and now it's pouring in. \*IF\* nothing else bad happens this year (no chance), then the S&P500 could easily grow 15%. This is from a rough guess with no real research: 9% DXY correction for 6 months and 6% average annual growth correction for S&P500. I do not stand by this number as there are many other factors in the US economy.

TheDoodleWamboodle

Insightful answer. Perfect. So I’m maxing 401k (23,500) and IRA (7000) What should I do with additional funds? Right now I add: $1000/m to various brokerage index funds and $250/m to a high yield savings. For reference, I make $180,000-$200,000. In addition to 401/ira/, I’m comfortable investing an additional $1500/m. Right now that’s between the brokerage and HYSA ($250 remaining for play money investing - penny stocks, BTC, random high-risk investments)

Hot-Problem2436

So put 5 million in a SoFi HYSA? Not that hard.

TheDadThatGrills

29, no debt, over $150K+ in assets- you're doing well for your age, even if you haven't taken full advantage of the last 10 years. Low hanging fruit: Maxing out your annual ROTH IRA contribution today using the $$$ from your HYSA

Heyhayheigh

Depends on what it is. These posts are always silly. People from zero risk HYSA to likely something super speculative. Find a trusted a trustworthy pro and do what they say. Most people shouldn’t manage their own money.

gigastonksmedia

If you're young and that's retirement money, don't touch it and forget you have it. I would continue DCA'ing as well every month or so into the market (except for an emergency fund of 3-6mo expenses, keep that in a HYSA or money market)

Wrong_Attitude5096

Choose to be an owner of the business. If it’s a great business, it is working for you making more cash than cash makes in HYSA. “Taking profits” is selling part of the business to invest in cash. It’s not wise if you own a great business. If it’s a crap business and tour thesis is busted, sell it all and invest the sale into a great business.

G4M35

I would not do bonds (it's me, not for my risk tolerance). But I would do HYSA or laddered CDs (CDs where the early withdrawal penalty is only the forfeiture of the interest accrued), look for the highest yield, you do want to be >4%.

Onphone_irl

you can say what you want but I did a fuckton of research on the biz model and made an educated decision. there's risk, thers still risk, but this isn't buying CDs or HYSA is it?

nasdaqslut

Ngl the last few months have shown how unironically dumb the average web user has become. It used to be a joke but holy shit some of you I genuinely can’t tell. Too many people trading with emotions and tik tok news and crying manipulation when shit doesn’t go their way. Stick to ETFs or HYSA if you cant accept losing. Gambling isn’t for everyone.

Chazzyboi69

if todays price action actually confuses you then you are probably better off sticking with a HYSA. your best bet though is working on your looks and personality so that maybe you can meet someone who can support you financially. making it in the markets likely just is not in the cards for you if you are at all perplexed today.

BumbleSlob

Once again, even more bad financial advice. There is no financial analyst anywhere who knows how a specific asset, any asset, is “expected” to move over the next few years. Source: me, I spent a decade at Goldman working alongside those financial analysts If the goal is to avoid losing money to inflation, a HYSA is the significantly better choice as it outpaces inflation and is FDIC insured.

therealjerseytom

> Silver seems safer than stock market You have a 3-year time horizon. If you'd bought $1000 of silver in 2012, by 2015 it would be worth a mere $400. HYSA or rolling ladder of treasury bills is safe and simple here. Besides, your savings rate will be what makes the biggest difference on growth. If we had a great year in the stock market that $38,500 might grow to $46,000. Meanwhile you can grow it to $62,500 just by your $2k/month savings rate.

SumthingBrewing

Wealthfront. Their HYSA is paying 4% right now. Same-day transfers out. And they have this investment tool that allows you to set your risk level. It automatically diversifies into different assets classes and also does automatic tax loss harvesting to reduce your tax burden. I’d put most in their HYSA and the rest into that Automated Investment Account.

Infinite_Calendar458

I’d do cash and dump your HYSA. Shop around. My AMEX pays 3.6%. I know Capital One has an offer out for 3.6% and if you deposit 20k in the first 15 days of funding they’ll give you another $1500. Some fintechs are still paying 4.0%. You’re losing potential return on yours specifically. It’s never bad to diversify into stocks, precious metals, even bitcoin. However, since your goal is specifically to buy an investment property the cash in a better HYSA is your best option as you won’t lose money on a drop and you have a set time frame you’re looking to buy. Market may go up 10-15% in the next 3 years, but it could also drop that much or more.

therealjerseytom

If interest rates are cut, your HYSA yield will drop with it. A CD or treasury note locks in your interest rate for the whole term. Like in your other comment, if you'd bought a CD or treasury note in January you could have locked in 4% rather than drop to 3.65.

Virtual-Ducks

What's your HYSA? Best I've found is 3.8%. seems like the 5 year CDs are about the same/lower, but the shorter term CDs may be higher.  Another alternative is a money market fund. Schwab has some with comparable rates to a HYSA.  It's a risk/reward decision. CD will lock you in, HYSA might drop. Or it might not, given interest rates and the economy these days. 

Sound_Step

The HYSA I have in now is higher equal to the highest CD I saw.

conndor84

Most put into bank in a HYSA (or equivalent). We use CD ladders so we buy a CD expiring in 12 months and each quarter we do the same and then eventually each quarter (or whatever timeframe you want) a CD matured and you can start again. The returns aren’t as good as market but it’s no/very low risk and you plan to spend relatively soon so inflation isn’t a major concern. Car is a whole can of worms. I personally subscribe to buying all cash at a young age. Avoid debt. Have something low cost and over time step up a bit and a bit each time. Rent is important to have a few months spare in case of issues. Also often need first and last as a young renter but look it up where you are. Once when I moved country they required 12 months upfront!!!

SheriffBartholomew

If it's short term then why not just go with a HYSA?

BumbleSlob

Hi friend, To clarify, you make $300k a year? Having $230k in Costco alone is a HUGE issue, if that is your only investment. I highly recommended you read up about diversification. Right now you have all your eggs in one basket which is highly risky and problematic no matter what the underlying company is (see: people who went all in on Enron).  If your 44k is sitting in a regular checking account, you are bleeding money to inflation which is around 2-3% right now. You should probably plop that in a high yield savings account (HYSA) if you anticipate needing it in near future, or investing it if needing it in medium or far future.  To give you better advice, you should let us know about your general tolerance for risk (as higher risk yields higher returns in investments), your goals for your money in the short, medium, and long term, and your general level of financial literacy. Best of luck!

grandemoka

Index fund & HYSA, depending on your risk tolerance. If not buying a home until 10 years later, you can afford some risk.

xiongchiamiov

Start by reading https://www.reddit.com/r/personalfinance/wiki/commontopics/ and http://efficientfrontier.com/ef/0adhoc/ifyoucan.pdf . For your retirement portfolio, a very easy and reasonable approach would be to put everything in your broker's (index) target date fund. For your house downpayment, you probably want to just keep it in an HYSA.

bitofftoomuch

As much as I want to give a sarcastic, gamble it all response, I won't. Are you talking about an emergency fund or savings account would be the first question. You need an emergency fund and it needs to be in an account you can easily access. Consider what would happen if you need the money immediately and the markets are closed for a long weekend. You can always put traditional savings in a "safe" investment. But given the current markets, I dont know what that really is. 4.5% in a HYSA isnt that bad an option to limit risk.

BNeutral

Either you don't align, or you take less profit. Any corporation that is successful will have some reason for someone to complain about it. I don't think there's some third position solution where you keep your morals and also get the most profitable results. There's a few ETFs if you search with fun labels like being environmentally friendly, maybe that works for you, you'll have to search for one that matches your criteria. If you put your money on a HYSA ultimately that is backed by government bonds that help finance the defense budget and such. If you buy crypto some environmentalist will come out of the woodworks to explain how using electricity makes you a bad person. If you buy gold, someone will talk about working conditions in mines, its bloody history, etc.

MusicLeather315

Cash out. Set aside tax money in a HYSA. The rest in Treasuries. Then when the market takes a shit, liquidate and buy S&P index. Then sell and retire.

SillyLilBear

Put it in a HYSA

onemanmelee

Hi all - I am late to the game on investing, now 45, but am ready to go for it. I know some basic stuff, like I should open a ROTH IRA before all other investments, and other than that I think the basic is to invest in index funds and/or ETFs. My question is, how do you choose which funds? For example, I've read that doing basic index funds usually has a return rate of 7-7.5%. However, I've read that SPDR often has closer to 10% returns, and that VOO over time averages out to a 13% return over 10 years. So my question is, are SPDR and VOO higher returns because they are much higher risk, or is there more to it than that? Are they less liquid somehow? Or am I simply wrong on my above return assumptions? 13% seems a bit too good to be true, and obviously if that were the case with a similar risk profile, that's what everyone (presumably) would do. So basically, how do I choose the right type of funds so I can maximize returns without *that* much higher a risk? Also, what is the importance of choosing which brokerage you go through? Does it matter, aside from any fees they may charge, or is it basically an ETF is an ETF no matter who you buy through? I ask because I already have a checking account with Schwab and I know they have the brokerage side, so I figure if no reason not to, since I already have an account, I could start with them. Thanks all. Appreciate the advice in advance, as I know some of these questions are noob as hell. **EDIT** \- in case this is necessary per the rules I am 45 in NYC, looking to start investing since I have most cash sitting in HYSA at mediocre interest rate, I rent so no mortgage and $0 debt.

Lucky-Ad-8458

Get budget sorted out. Make sure incomings are more than outgoings :). Pay off high interest debt - credit cards, etc. Save an emergency fund - 3-6 months worth of expenses (in case you lose your job, etc) - don’t touch it - put it in a HYSA. Then you can start investing. Start with retirement accounts - they are tax exempt until retirement. If your employer runs a 401k, invest in it. If they match your contributions - ie for every $ you put in they put in $ - even better - max it out, because it’s free money. Then open an IRA - max it out every year. Invest consistently - every month - out of your pay packet - as much as you can. Don’t stop if the market crashes - shares are on sale. If you have left over cash save or invest it in a taxable brokerage account. Take your age subtract it from 100-120 (depending on risk). This is the % you should have invested in equities. The balance in bonds. Rebalance it every 5 years. As you get closer to retirement your bonds as a % of your portfolio should increase. Invest in low cost / zero load indexed mutual funds. Vanguard, Fidelity, T Rowe Price have tons of good funds. Don’t pay for the services of a financial advisor unless you’ve got a complicated situation- they charge 1%+ and it eats into your gains. Ignore the market swings. Over time - the value of the market goes up. Ignore speculating on bitcoin / gold / other commodities. Sure - have some play money in there but don’t make it a sig part of your portfolio. This is not financial advice and I am not a financial advisor. Good luck!

MetroDefiAnce

That’s a proper setup, Respect where it’s due, your system’s tight. Not perfect (none of ours are), but clearly intentional. That bit about the traditional and Roth IRA mix-up? You’re not alone, I did something similar when I first got into this, except my mistake was trying to swing a bunch of different accounts without knowing how they actually tax me on the backend. Rookie days. Now me? I didn’t really grow up around this stuff. Dropped out of uni, started flipping fabrics and built my brand from scratch — that’s where most of my capital came from. I wasn’t maxing IRAs back then… I was just trying to make rent while saving up for my first house. It was crypto, of all things, that ended up being the wildcard. Gave a guy I trusted around £12K to manage a side portfolio for me, and a few altcoin rotations later? That bag’s sitting over £80K. Totally passive. Not something I banked on, but it’s added fuel to everything else I’m building — property, stocks, long-term stuff. I like how you’re keeping that $50K emergency stash in a HYSA. It’s not flashy, but it’s strategic. If the market tanks tomorrow, you’re chillin’. And having dry powder? That’s power, bro. Personally, I don’t keep that much in cash — maybe 3 months — but I’ve got a business buffer too, so I kind of treat that like a cushion. Sounds like you’ve got a good grip on your 401k, Roth, and HSA plays — but how do you usually go about choosing your investments? Like, are you more data-driven, or do you lean on gut and conviction? And with your brokerage opening up soon — you planning to keep that passive too, or test out a few things you’ve been watching on the side? Always curious how other people structure their plays.

Legitimate-Ask-5803

For about the same amount of time, I’ve also had a Roth IRA that I contribute the max to every year and one of those early years I also opened a traditional IRA that I’ve contributed the max to 1 year and haven’t touch because, at the time when I was still learning some things, I didn’t realize the max contribution was combined in those accounts. I contribute 10% to my 401k each year with a 5% employer match and I’m about to start a brokerage account as well because I’m finding that as I move into my professional career, I have larger bonuses that I’d like to invest and for whatever reason, my employer won’t let us contribute bonus money to our 401k. I also have a 10 month cash savings emergency fund of about $50k in an HYSA earning 4% ($2000 per year) that I move over on January 1st to my Roth IRA every year to kick start the contribution. I’d really love to invest this “better” because I know what $50k could do in a brokerage account, but based on what it’s for, I think it’s safest in an HYSA for now.

Legitimate-Ask-5803

For about the same amount of time, I’ve also had a Roth IRA that I contribute the max to every year and one of those early years I also opened a traditional IRA that I’ve contributed the max to 1 year and haven’t touch because, at the time when I was still learning some things, I didn’t realize the max contribution was combined in those accounts. I contribute 10% to my 401k each year with a 5% employer match and I’m about to start a brokerage account as well because I’m finding that as I move into my professional career, I have larger bonuses that I’d like to invest and for whatever reason, my employer won’t let us contribute bonus money to our 401k. I also have a 10 month cash savings emergency fund of about $50k in an HYSA earning 4% ($2000 per year) that I move over on January 1st to my Roth IRA every year to kick start the contribution. I’d really love to invest this “better” because I know what $50k could do in a brokerage account, but based on what it’s for, I think it’s safest in an HYSA for now.

RekdGaming

Every dog has it day. What a huge blessing bro good hits! Now take it all out but 25k pay your tax’s max your 401k Roth IRA and traditional Ira put the rest in a HYSA and take a 2 week vacation with your lady n reset :) you made it bro!!

MinuetInUrsaMajor

I'm in to buy my full IRA contribution with that dip. And let's say....I'll do *half* of my HYSA hold in SPY? But damn. I am drinking. And I might get put on a project soon. Might be a good time to pack the parachute.

kewli

If your bond's rate of return is higher than the HYSA, then 100% yes! You should see interest rate on the bond. I usually buy new issues, and not from the secondary market. But you can also do that.

GenMassilia13

Yes - they do give me better performance than MYSELF managing my money. The TLH this half year is already close to $25K. With a passive index it would be zero. They put me on a growth index in addition to S&P500, I would have just stayed on S&P500. Many times including this year I would have sell to go to cash, same thing during covid, they kept me invested. A lot of time I would have tried to time the market, they didn’t. They kept me on better HYSA for some of my cash that provided almost 1% better than most of HYSA. Most researches show that most investors failed to do like the S&P500. While most of people complain about a 1% fee, most of people largely underperform the market to emotions and bad decisions. QAIB Report (2019 data): Over a 20-year period, the average retail investor earned around 4%–5% per year, while the S&P 500 returned around 9%–10%. The gap is largely due to: Panic selling during downturns Chasing performance (buying high, selling low) Market timing attempts Lack of a consistent strategy

callmey

Rent is around $1800-1900 and my estimates are around $900 per month for mortgage with escrow included (insurance and taxes). Goal is have surplus $900 ($700 to me after a property management get their 10%) to save and use for expenses to keep house repaired as needed or extra principal payments after building a fund for unexpected large ticket repairs. Would prefer not to use own money from HYSA ($45,000) but can't predict future.

glitter_n_grease

I hadn’t thought of this! Would the return on that be higher than a HYSA?

glitter_n_grease

Huge, thank you so much!! That orange guy’s actions make me nervous for sure, especially as someone who would be just dipping their toe in the water for the first time… but from what I’ve been reading on here it seems like the odds of it bouncing back long term, should something horrible happen, are pretty high. Going to transfer my emergency fund into a HYSA asap, great advice!!

OurNewestMember

does your HYSA yield more than the current market rate of around 4.1%?

randaladams

What can I say to de-mystify? We were bought out about 3 years ago and now being sold again. About 8 months ago the company announced it was no long matching 3%. I had a financial advisor look at the rules governing the Principal account and it was in there that I can't withdraw to deposit somewhere else unless I left the company or the company became insolvent. I have been contributing the max allowed since we started. My wife and I have maxed out our IRAs (a Roth and my traditional). We have a 3 month HYSA and no HSA is available to me.

xothinkpink7

If you have a comfortable 3-6 month emergency savings reserve in a HYSA AND your high interest debt paid off (besides your house) then yes it’s worth it to start investing even if it’s only a couple thousand. If you invest in low risk, low cost, diversified ETFs and Mutual Funds then you don’t need to worry about the orange president. Yes you might see some volatility over the next 4 years but they are safe and will rebound. Don’t try to pick the miracle stock to get rich off of. Think VOO, SPY, VTI, VT

DarkVoid42

lol hahahahaha. put your money in a HYSA.

Marsellus_Wallace12

Not sure what brokerage you use but Fidelity gives you interest that is competitive with HYSAs on cash in your account. You also wouldn’t have to pay margin interest as the puts would actually be cash secured, so you could come out ahead of your HYSA

throwaway17612d

I have a level 2. My backup account is my HYSA. If I have to get assigned I have the cash to transfer and cover my position. Figure I’d try to squeeze as much interest out of the HySA than leaving it in my brokerage. Until then I’ll use my margin to sell puts.

gsasquatch

VTI and chill "Vanguard Total Index" all the stocks, low fees. No thinking. Safeish middle of the road. IMHO should be your benchmark. What is going to do better than that? SPY S+P500, but that's all large cap, and they don't need more cap, and might be a bit of a pyramid. Could be better returns than VTI, but also a bit more risk. QQQ, Nasdaq, tech stocks, bigger returns, but more overvalued than SPY, and for that a bit riskier. HYSA is safer, so might be better, but, only 1% if that better than inflation usually it is less than inflation. Only thing worse would be a safety deposit box. ibonds I still like. I think guaranteed 1.1% above inflation now. In 2019, getting 1.1% on anything safe was genius, savings accounts were paying 0.5%. Can't touch it for a year, which is good and bad. Only $10k/year, which is a little limiting. Might be state tax exempt. Then you get to weird stuff. I like EWG, like a German index fund. Dollar is strongish against Euro now, and if it stops doing that, like because of tariffs or whatever, then that's a little bump. German companies have nice PE ratios. INDA is similar, but India. India is 1B people and industrializing, so the market in general has potential GDP is growing than US, there's a lot of growth potential there. As long as they don't get spicy with the Pakis. I have stock in the bank I bank at. Big solid institution "too big to fail" pays a dividend. Might not grow a lot, but pays a dividend. Similar with my local utility. Pays about as good as real estate, and could also go up in price too. Then, I'll do month trading. Like sometimes buy the hot ticket for a thou. I've mainly lost on this, but whatever, makes me feel big time, and it is only a few hundo. When I lose the losses offset for the tax man. Also look at "tax loss havesting" like switching from VO to VB or SPY to QQQ Look at companies you know professionally. Like how is Sysco doing? If you're in that business, you might know better than me, and have a bit of an edge there, watching your particular industry's news. Having a couple thou in cash on hand, and not visit an ATM for a few months, and use it for restaurants and local businesses, avoid that 3% credit card fee markup on ordinary spending. If you're getting paid in cash though, you might already be doing that. How much into each is about what you believe, and your tolerance for risk vs. your desire for reward, but mix it up a bit, and cover all your bases. Look at tax advantaged accounts like Roth and HSA, and definitely 401k going forward if you have income.

pbemea

Keep some cash. You might need it for a car repair or something. Look up the personal finance flowchart on Reddit. Build an idea of "baseline" investing in your head. I propose that looking into money market funds, the S&P, and treasuries is a good idea before making a decision. Consider the returns, the risk, the expenses incurred, and the liquidity. A MMF will get you the equivalent of a HYSA and are dead simple, liquid, and cheap. Buying the S&P is a good baseline to get started after that. Avoid fees like the plague. That means transaction fees, front loads, back loads, net expense ratios, commissions, whatever. Another good baseline understanding of investing is called "boglehead". I'm not a boglehead currently, but I've been one in the past and might be one again in the future. Just understand the argument behind being a boglehead.

Puzzleheaded-Score58

I’d buy SGOV. Even though inflation is high, interest rates are also pretty high right now, so yield is pretty good + it’s more tax efficient than HYSA.

cruisin_urchin87

ASTS… no wait… yeah ASTS… But seriously HYSA. Nothing beats sitting on liquid.

AffectionateLeek5854

Choose between HYSA or MMF for quick liquidation , same day. Since you would need the money soon , wouldn't recomend to put in stocks or ETF . If you are fine with the 2-day wait period to get to your money, then SGOV or USFR is another safe option ( state tax benefit too if you live in a high state tax area )

Heyhayheigh

Yea. There are good money market mutual funds also. But honestly just anecdotal observation: people spend less on SGOV. I don’t know what it is, in theory there should be no difference. In my experience, HYSA is as good as spent lol. Money market, people swap around a lot. CD’s, they don’t renew favorably (either bank auto renews at shit rate for suckers, or brokered and they leave sitting in cash until they realize it redeemed and didn’t auto renew). SGOV is just easier. Now that T+1, no real reason to not use.

TheRealJim57

WTF is it doing in a safety deposit box in the first place? Put it all into an HYSA, at minimum.

ThreeThirds_33

First $10k into government iBonds. Buy from treasurydirect.com. This offers a guaranteed return over the rate of inflation. 2nd 10k into HYSA.

bobolly

No penalty CD. You can take money out after 7 days. You can't add any but if you think you'll be making regular deposits than a HYSA is for that.

AS9891209

HYSA

Jmish87

You should do a bit of everything, if you want a fairly conservative strategy. Keep some in a HYSA (emergency fund), some in a 12-18 month CD, some in a mutual fund (mirroring a major market or your retirement year), and depending on your risk tolerance, a small amount in higher risk investments.

PupusaSlut

Buy yourself something nice but not crazy. Pay off any high interest debt and then invest it the boring way. Index funds. Keep a 3-6 month emergency fund in a HYSA.  Keep working at your job if you've got chances at a promotion or jump ship to something new.  This is a massive windfall. If you can keep it.

Trashcan_Johnson

Pull out $250k. Put in HYSA and save for taxes. Next year when you only have $250k because you blew the rest in options, you'll be happy with yourself

aRedit-account

For a HYSA I personally would use a primis checking account or just vanguard settlement fund or SGOV

nakfoor

I didn't really know much about saving when I entered the workforce full time at 23. All I knew is I wanted to. So I just kept saving cash in my bank account, not getting interest. I think I got up to 20k. I also started putting 12% into my employer's 401k when I became eligible, but I had no idea what that meant at the time. It wasn't until about two years later that I started properly becoming informed about HYSA, index funds, IRA accounts. I opened my IRA and have maxed it out every year since. My advice would be just buy index funds and don't look at it. In my opinion there are way more interesting things to spend time thinking about. Also start early. I wish I could go back to win I was 18 working part time and put a little money into a roth, almost tax free and growing since the Great Recession.

visionarymind

Gamble $1,000, $500 into HYSA, $500 treating yoself 😁

solariac

Put it all in SGOV. Slightly higher yield than a HYSA and settles T+1.

lVloogie

I was pulling money out of my HYSA in April. People's mind sets get so backwards when markets go up and down significantly.

BoroughN17

Its all about risk reward. Holding money in an HYSA for 4% while the economy and global politics are in flux. Sure if things stay the same you could get 8%, but if things crashed and you had buying power instead of an extra 4% gain your looking at 20-30%. This subreddit is far more confident in the markets than the average person.

ChaseballBat

Market analysis have SPY at 6300 by end of year... Assuming you pulled out on Jan 21st you'd be down like 2-3% of that with a 5% HYSA... I will take that risk.

AppropriateGoat7039

Yeah, I’m up nearly 40% since April. And that wasn’t accomplished by staying out of the market when EVERYONE was screaming to sell and go to cash/HYSA. Scared money don’t make money. I’m always buying no matter what.

cdsfh

We’re still maxing 401ks that are going into L/M/S cap index funds, but I’ve sold off about 20% of our brokerage stocks and haven’t been adding to it since the initial tariff announcement and subsequent roller coaster ups and downs. Now, ither than a HYSA, I’m not sure what to do with $150k in cash, but we’d rather have that problem.

WorkoutProblems

what are you using for HYSA?

cinJESUS

ye honestly since the APY from this bet is so low (like 5%), it's probably better to just do short term treasuries or HYSA

Big_Money12345

Once you realize how dividends actually work you realize it isn't even income really. It's just forced crappy taxes in OP's case for no good reason. Dividends aren't extra money on top of the share price. The dividends **COME OUT OF** your share price **DOLLAR FOR DOLLAR.** So you net nothing but extra taxes.  You could pay yourself a dividend by just selling the stock by whatever rate you want while paying less taxes. Plus, it's dumb either way to be using the market as a HYSA or treasury fund anyway. OP is saying silly stuff about how he doesn't want to use short term accounts for short term goals, because he has no clue how this stuff works. Use the accounts meant for the types of savings and investments instead of getting caught up in the word dividend like a goober.

alexbananas

My HYSA gives me 15% annually so I've got a big cash portion lol

Sharp-Hearing1011

# Advice on Immigrant investing Working in US - Big Tech - H1B. I have a house (600K Debt/Mortgage), have done all the conventional stuff like maxing out 401K, index investing etc. I am sitting on 200K cask in HYSA (apart from emergency fund) and looking to invest it somewhere. With a threat of layoff always looming over and market correction - I want to invest this cash somewhere safe (Min risk to principal amount) - not looking for dividends or monthly interest payouts. Any advice ?

ChaseballBat

Trump issues travel ban to all countries that aren't actively working on a tariff deal with him. All countries working on a tariff deal get their deadline pushed out 90 days. All other countries are essentially cut off by the US until the market goes sideways and he TACO. There is no more bull play. He'll keep this shit up for 4 years and never get anything. Also the S&P500 is only predicted to get to 6300 this year, so what is the risk of putting most money in a HYSA or sim, most you'll lose out on is 3-6% unless you already have risky positions. Best case scenario you're positioned lucratively for buying during a downturn/recession.

therealjerseytom

> The issue is everyone keeps telling me it’s a bad idea because of taxes and that **I shouldn’t focus so much on dividends.** But I’m not sure what a better move would be. There are a lot of folks, particularly young investors, who immediately dismiss dividend-focused equities on the basis that "total return is all that matters." Which is true if all you care about is how big a retirement account is by the time you can touch it, at age 60. But, that's not the one and only financial objective, and there are different considerations for taxable versus tax-advantaged accounts. For example, if you did go for a more growth-oriented ETF for now, with the intention of changing over to dividend income at a later date, that comes with a significant taxable event. So if there's a goal of having passive income with less volatility than the market at large, I think it's valid to look at dividend equities, so long as you're okay with the fact that it comes at the cost of diminished long-run total return. > Eventually, I’d love to use the passive income to help pay for things like rent or even the occasional vacation. It's at least important to consider how much $$ you'd need to cover those costs. So let's say you wanted $750/month passive income to help with rent or whatever expenses. Let's assume something like 3% effective yield (after taxes) on qualified dividend income. To have $750/month, or $9000 per year, coming from a 3% yield, you'll need to grow that $100k to $300k. That will take some time. You can estimate how much time, based on an assumed growth and contribution rate, and see if that works for you. Also need to consider the potential for draw-down, which you don't have to worry about in a HYSA. Overall I don't think it's a bad idea at all, just a question of what's realistic to reach your goals. Qualified dividends are taxed at a better rate than ordinary interest. Personally, I have a short-ish term account and portfolio which comprises (a) emergency fund $$ as well as (b) discretionary $$. I keep it roughly 1/3 each money market (quasi HYSA), low-volatility and defensive, dividend-yielding equities, and bonds (particularly municipal). The goal with it is to have a good pool of $$ that eeks out a bit more return than a money market or savings account, but only a modest amount of risk.

dasgoose245

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

Heyhayheigh

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

xiongchiamiov

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

Practical_Ad_4453

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

dasgoose245

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

nightman001244

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

GaylrdFocker

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

No-Dragonfruit-1324

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

Heyhayheigh

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

MacarioTala

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

Anthrax2112

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

Various_Couple_764

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

MayorMcBussin

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

No-Dragonfruit-1324

getting outperformed by a HYSA by 4.3% this year

Certain-Ad-2418

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

Inflation_2022

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

onelifestand101

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

averyhungrynomad

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

visionarymind

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

MarsupialNew9418

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

IllustriousPepper765

#should of retired instead, one million in a HYSA

Heyhayheigh

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

xiongchiamiov

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