HYSA

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.

PaddyD93

HYSA would barely cover inflation, massive waste of potential. It’s always a good idea to diversify, if you want some help diversifying some of it into real estate feel free to pm me and I can show you how we do that. If set up correctly, it’s possible to achieve 16-20% annual return on investment without having to manage the properties yourself (management is built into the financial model)

azuredota

Safest, yes but the safety isn’t free. The bank is taking your money and making a killing by investing it and giving you 3.5% back. Simulate 10Y gains in a HYSA vs just the S&P500 and see how much they’re robbing you. What would I do? Well you own half a mil in stocks, which stocks? Is just leaving it alone an option? If I had $500k to invest? I would personally max out my tax leveraged account contributions (ROTH) take the left over and start a private investing portfolio and probably do an 80% 20% split between VOO and VGT (I already hold this).

thelosernextdoorr

I read that HYSA and CD were the safest way to grow. What would you do?

azuredota

> debating on putting most if it in HYSA Why would you ever do this

Hyper5Focus

Depends on what stocks it is. Currently the market is in a downward trend so if things keep up, you could end up waiting 5-10 years for it to get back to what it is now. Best way forward would be to liquidate and then reinvest in 2-4 years time, meanwhile keeping it in a HYSA

sarayewo

HYSA basically offsets inflation costs, and shouldn't hold more than your emergency fund (3-6 months of living expenses). The rest should stay in the market. You didn't specify what stocks you have and if it's well diversified, but inheritance gives you a stepped up cost basis, meaning that your cost basis is assumed at the moment of receiving inheritance and not the original purchase of the equities. With that, if you do want to rebalance that portfolio or invest it differently, now is the time as you'll pay little to none capital gains taxes.

bobdevnul

That is unanswerable without knowing the goals for the money. Investing for retirement is not the same as saving for a home down payment or vacation. Park it in a HYSA, MMF, or short term bond fund until you know what you want to do.

NorthAtmosphere7772

If you're a CA resident then Wealthfront has options beyond the HYSA that is specifically designed around your state tax situation. Worth your time exploring further to get the best after tax yield. An AI bot can explain it quicker than reddit can.

Reasonable-Desk3273

At your stage, it’s less about squeezing an extra 0.2–0.3% and more about matching the tool to the goal. If this is true emergency cash, a HYSA or a brokerage money market is perfectly fine and keeps things simple. SGOV is solid too, just slightly more moving parts. I’d focus on liquidity and consistency first — optimizing yield comes after you’ve built the habit and the cushion.

Reasonable-Desk3273

You’re honestly in a really solid spot for 26, especially in a VHCOL area. If that HYSA is earmarked for a 3–5 year home purchase, keeping most of it safe makes sense — you don’t want market risk on your down payment timeline. Your current split (steady index investing + strong cash reserves) is already balanced; I’d only increase taxable investing if you’re confident the home timeline won’t move up. Otherwise, consistency beats squeezing a bit more return.

lambda-legacy

Others have suggested stock market options, which is great. However, i want to emphasize it's not one or the other. You need all account options to be in the best place. HYSA is critical for your emergency fund. This is cash to cover about 6 months of expenses. It won't produce the best return, but that's not the point. The point is to have cash on hand to cover unexpected bills. Everything above that you should put in the stock market in index funds.

Heyhayheigh

Not stupid. It pays once a month. The price adjusts for the daily dividend accruing, then resets when it pays. When you use for a bit you realize how it works. Just have dividend reinvestment and pull out when you need to pay for something. There is no “gaming” it. Just an easy way to manage short term cash. The alternatives are bouncing from banks with promotional HYSA offers, rolling CD’s (waste of time), or rolling tbills (even bigger waste of time). The plan for cash is a super small part of the formula. It is easier to just have a go to and do real investing when suitable.

Heyhayheigh

SGOV instead of HYSA. You’re off to a great start!!

Longjumping-Bid-9523

As you seem to realize, your decision on what to do with those HYSA monies entirely depends on your financial goal and tolerance for/ability to recover from losses in a given year. Given your 3-5 investment horizon towards buying a home, I would only invest those monies in non-risk assets, e.g. U.S. Treasuries, CDs, investment grade corporate or municipal bonds. Your HYSA probably offers an interest payment of 3.5% to 4.0% on your assets. You would want to seek non-risk asset investments that exceeded that, but with maturity dates not to exceed 3 to 5 years.

PaperHandsTheDip

You'll likely want to take some market risk then. Low risk ETF's are likely your best bet, something such as VOO or SPY. HYSA's tend to offer a \~3.5% return. It's more or less guaranteed, but they tend to perform fairly poorly compared to equities. They're great for things like emergency funds - where you can't afford to take any losses, or if you're saving up cash. If you assume market risk (ie: S&P 500) - you tend to average significantly higher returns over the long term (average \~10-11% per annum). It's quite volatile tho. Here's a chart of VOO's returns over the last 5 years: [https://ca.finance.yahoo.com/quote/VOO/](https://ca.finance.yahoo.com/quote/VOO/) It's up \~77% over 5 year, and \~400% over 10. However during that time it saw several 15-20% dips. The idea is you invest the money that you won't need for a long time and just walk away / don't look at it. Over the long term you'll do better than a HYSA, but over the short term it's much more volatile. Drawdowns can last for over a year - but then are often followed by massive surges.

darkskies85

Learning about wash sales was big for you, bet you won’t do that again. Of course gains are taxable, but at least if you have gains to pull, you can pull them to pay for your mistakes from last year and then move forward. Some people end up with no gains to pay taxes with lol. It’s not a never ending cycle, because you’re only paying ~15-22% of your gain amount if you move forward without getting washed, so you need to be very careful not to make that mistake again. No one went broke from taking profits, you just gotta be careful and ALWAYS keep in a HYSA or a safe fund all or almost all of what you project you will owe next tax season.

slowdawg84

TY, setting aside the right amount for taxes now since no telling what happens rest of the year. Some going into HYSA, some into an index.

90N1NE

In some brokerages you still earn interest from the cash if it's in a fund like SPAXX for example. So you'd beat a HYSA and also get the put premium.

Clear_Anything1232

It's a crap business model It will never even beat HYSA in terms of overall margins when accounting for debt interest payments.

wolf19d

A bird in the hand is worth two in the bush. Yes, IF you live past 80, you will net more (raw, uninvested) money. But let me ask you this: what would you rather have? Money when you are too old to use it or money when you can enjoy it? My father and stepmother put off their draw until 70. Now, at 78, he has dementia and she is stuck caring for my stepbrother and him (long story). He never traveled like he wanted to because their health declined so quickly after retiring late. I get a pension starting at 60. I’m turning on SS as soon as it is available. I’d rather put it in a HYSA and earn interest. Better to have it in hand than gamble that I will get my money’s worth out of it by living past 80.

swapdip

You risk $10,000 to make $50. Its very capital intensive for a very small payout, theta decays on it very slowly, and yeah I agree its nearly a sure thing, but you would be so much more ahead just putting it in a HYSA or whatever.

Accomplished-Club690

Just sold my entire portfolio at the bottom again Closed my SPY calls for a 78% loss because “risk management. Five minutes later market immediately reversed green. Classic liquidity grab ngl.Re-entered higher to avoid missing the move. Down another 22% already but this time it’s different because I drew new trendlines. Also moved my HYSA into 0DTE coz, cash loses to inflation and theta is basically passive income if you think about it. If SPY doesn’t hit 705 by close I may have to explain to my mom why rent is late again but honestly that’s just conviction. Fuck u bers

Acceptable_Dirt69

HYSA

__redruM

The flip side is taking it early and investing it. If you can wait anyway, then you can stick it in the market, or even a HYSA. Which is better?

WarmCan3034

idk what ur saying but people made more money on a HYSA last year than holding microsoft. MSFT FUCK U

moDz_dun_care

Gambling is all relative. As a stock holder you say crypto bros are gambling. An index ETF holder would say you are gambling. A HYSA holder would say being in the stock market is gambling. Know where you sit and enter/exit accordingly. For example, don't turn a trade into an "investment" just cause it has gone done.

Ill-Ad1603

Just shove that shit into a HYSA for a couple of months you ain’t making money in this market

Icy-Sheepherder-7595

Yeah that makes sense. It was in a HYSA forever but I was like I should be investing more. And since I missed the 2022 bottom this was my way for making up for it. I just want all the time I wasted at my previous job to have been worth something. That shit ate at my soul for way less pay than I probably should've been making. It just feels like I gave up all these prime years for nothing

expert-on-reddit

The stock market is not a short term investment vehicle. Money that “you need to move out” belongs in a HYSA or perhaps a CD. What you’re discovering is that making the right decision (investing) but at the wrong time (when you may need the money for shelter) is the same thing as making the wrong decision.

NVDAismyg0d

Yes. Put it on in HYSA and connect 250k annually 

Majestic-Bass6772

HYSA

Low_Composer_5009

1.) Yeah, that happens. Stocks, and crypto are very volatile compared to other forms of investing. So NEVER use them as an emergency fund, savings for a down payment, or anything else where you would NEED the money at any moment. Only use it for really long term investments, like retirement. 2.) You probably bought something niche. You should prioritize Indexes (baskets of stocks). That way, if one company crashes, it's only 1% of your money. But lets say you buy a full share, like APPL, and APPL crashes, then 100% of you money crashes. 3.) With that little bit invested, you should be getting ETFs and not shares. ETFs are exchangeable trading funds, and they're basically a way you can get a portion of an expensive stock. So, instead of buying penny stocks, you can buy 5% of an SPY stock. Much better and much safer. (SPY is the S&P 5000, and tracks many of the biggest companies. AKA, it's an Index Fund). So, for you advice on where you should put you money first. 1.) Start by putting money into somewhere save like a HYSA, that way if something happens and you NEED money, you have money. 2.) Then start putting money into ETF Indexes, a quick google search can get you a list of them. Some people like domestic Indexes, some people like International. I see a lot of 70/30 (70% domestic, 30% international). But I personally prefer 80/20. That's entirely up to you and usually isn't going to be a life-changing decision.

OddDescription4523

Probably the main thing to consider right now is your tax burden. I think your instincts are right that you don't want to just leave it as is; you probably want to consolidate it into safer (or at least less volatile) options. But, if you sell what you have, you'll have to pay taxes on it, and at 22 that could be a real problem. This is some important information: if you've held a stock for at least a year and a day, you only pay capital gains tax on it, which is generally 15%. So let's say you wanted to get rid of all your Tesla, so you sold roughly $60k worth of that stock. Google tells me TSLA traded at about $13/share on March 1, 2016, and it's now about $412 a share. (God bless Grandma.) To make it easy, let's just say you bought at $13/share and sell at $413/share, so you make $400 profit per share on 145 shares (that would be about $60k). Your gains would be $400 x 145 shares = $58,000. Since these are long-term gains (you held them more than a year), you'd owe 15% in taxes, which is $8,700. I don't know about you, but when I was 22, being surprised with an $8700 tax bill would have been a disaster. So, if you sell off a good portion of your portfolio so that you can put it in more cautious choices, be sure to hold some of the proceeds from the sale back to cover your tax burden. If there's anything in there that you've held for *less* than a year, then proceeds from the sale would count as ordinary income, in which case it just adds onto whatever you've earned in wages for the year. That might be a reason to hold onto some things so you could split the sales across two different years so you don't get hit with the full tax burden in one go. But, then of course you're risking a major drop in price while you hold it. You've just got to decide for yourself what level of risk you want to take vs. tax burden. In terms of what to put your portfolio into once you've sold the old holdings (or however much of them you're going to sell), you probably want to buy broad index-based ETFs. ETFs that track the S&P 500 as a whole like VTI, or ones that broadly track big companies (called "large-cap", meaning their market value is at least $10B) like VOO or IVV are usually where you want to go to get wide exposure. Right now is a bit of an odd time, though. There are some signs that we're in a bubble, and bubbles pop, and when they do, the whole market goes down hard, so having diversified doesn't protect you. No one can know for certain if we're in a bubble, or if we are how long before it pops, but just know that there is some reason to consider doing something other than the standard advice of putting it all in something like VTI or VOO. One option is to put a portion in an ETF that only holds things not based in the U.S., since that's where the bubble is if there's a bubble at all. VXUS is the ETF I'd recommend if you want to go that way. Another option is to just hold a bunch of it in cash in a high-yield savings account (HYSA) for a while. You could probably earn close to 3.5% interest in a HYSA while waiting to see if the bubble bursts or if fears of a bubble calm down. If there is a bubble and it bursts, then you've got your cash available to buy up equities on the cheap - much better to buy VOO or VTI after it's dropped 25%, right? Of course, if fears of a bubble are wrong, then things will have continued getting more expensive while you were only getting 3.5% interest on your money, so in that case you will have missed out on 6 months or 12 months or whatever that your money could have been growing faster. The last paragraph was trying to lay out (a) what people would normally suggest, (b) why that might not be best right now, and (c) what to consider given the worries of a bubble. Here, I'll give you my concrete recommendation. To let you know where I stand, I think we are in a bubble, so I've been selling most of the stocks that I've held for more than a year and moved the money into a HYSA. That being said, I've moved myself from about 97% stocks/3% cash to about 80% stocks/20% cash, so I'm still heavily invested and not willing to pay the extra taxes for short-term holdings just to get out now now now. If you don't want to learn about stock investing and just want a concrete plan, here's what I would do with a $120k portfolio that I wanted to make more cautious. First, sell off all individual stocks that have been held over a year. Things held a year or less, I'd hold onto them until they reach that year-and-a-day threshold then sell them. I'd put probably 80% of the money I now have in a HYSA, 10% in VOO and 10% in VXUS. Then every month, I'd buy like $3k worth of VOO and the same of VXUS, so I'm slowly moving the balance of cash to equities. If there's a crash and things become really cheap, jump on it to buy VOO and, if there are a couple big name companies you want to get, go ahead and buy a couple thousand dollars worth of them. Otherwise, just keep doing those monthly purchases until you're at something like 80% equities/20% cash. After that, when you have extra income available, buy more VOO, but always keep enough in cash so that if some disaster struck and you were suddenly without a job or place to live, you could afford to cover the necessities for 6 months. For the money you've invested, don't even look at it. The market will go up and down, but unless things go catastrophically different than they ever have before, the long-term trend will be up, so don't let yourself worry about a down week or even month; just know that when you're in your late 60s, you'll see just how much your money has helped you make more money!

ohhisnark

agree with those saying sell some and reinvest into an etf (you can do majority vti, but wouldn't hurt to add an etf that tracks the international market in there). Just think hard about how much you'd sell so you don't trigger high taxes. Another thing: keep some of it in cash in an HYSA for your emergency fund. not too much. just 3-6months.

juveyjords

I had over $750k sitting in HYSA during Covid years

SolWizard

Why would you use HYSA as the standard as if anyone has that much money in a savings account

4dolarmeme

You're not rich until you can live at a middle class standard of living from just interest on a HYSA imo. Multimillions are needed

Far-Guava6006

If that chart is any indication of things to come, leave the casino and put your money in a HYSA.

Acceptable-Fox-7103

I would save your $160 in a HYSA. Slowly and incrementally build your way back up. Once you have a couple thousand in the HSYA, start slowly investing in index funds. It’s not fast and not sexy but you’re more likely to have steady growth and not lose all of your money this way. Looking for aggressive growth via gambling on 1-2 individual stocks is a high risk high reward game. Yes, you might become rich quickly, but you are just as likely (perhaps more likely) to lose your initial investment.

Various_Couple_764

Must be friday All the anti dividend /Passive income people have spammed this post. yes safe bonds and HYSA don't pay much in yields. But there are dividend funds that pay much higher yields. QQQI (A covered call fund) for example has a 13% yield. Not the highest yield available from cover d call funds but It doesn't have any of the problems the higher yield funds have. 4.5 invested in this fund will produce $585 a year not much. But is you deposit 500 a month for 10 years you will have 125K and the yearly dividend of 16k a year. A little over 1K a month. And you pay less taxes on the dividends so it is a tax efficient fund. The key to high dividend income is to consistently depositing money every month to build up a large portfolio. Not covered call funds are not the only choices In addition to QQQI I have ARDC 9% yield, PBDC 9%, EMO 9%, CLOZ 8%, UTF 7%, UTG 6.4% and JAAA 5.5% I have these in my roth and they are currently pumping about 5K a month into my roth. I also have some in a taxable brokerage account so I can access the cash now.

h33b

Others here are telling you that you shouldn't, but nobody's really telling you why, so let's throw some numbers around. You want growth over time, and steady returns. The most steady thing you can do is put money in a high yield savings account or bonds. Those are no-risk options. Currently, you can find these types of accounts paying out around 3-3.5% per year on the balance. We'll pretend those rates don't change for sake of argument, and we'll split the difference and call it 3.3% (common HYSA rate). 3.3% on $4,500 is $12.19 per month. That's just shy of $150/yr of "passive income". In real terms, it would take you a year to basically earn a single "fun night out." You'll need a large balance to have meaningful passive anything. At this stage in your life, the $4,500 is probably better spent furthering your education and pursuing a well-paying career, so that you can grow your money pool so that your earnings are more meaningful. Sure, you can invest in the stock market (I do!) but there's risk there. There's no guarantee there will be a return or that your shares will hold their value. Something like a vending machine isn't really "passive" either. You still have to stock and maintain the unit; that's work. Sure it might earn you a little money, but the first time some dipshit drug addict kicks the window in, you're now operating at a loss. Not only do you have to fix the machine but you've lost product that would have otherwise been earning potential. It's important when asking these questions to really do the math to understand what reality is. I am curious though, you said: > I’ve been researching different options But you failed to mention any of those options. What were you considering, and why?

take_care_a_ya_shooz

Thanks, I got lucky (stage 1 testicular) and am currently in remission (awaiting MRI results though for my first scan). That said, treatment/surveillance adds about $8k to my bills annually now, even more if I need to do chemo. My emergency fund is doing exactly what it needs to do, and years of contributing to an HSA even more so. I'm 37 and in tech. Been laid off 3 times, the most recent with zero warning or anticipation. I built up my emergency fund over the years in case of another layoff so that I had \*at least\* a year of runway. You're younger so your expenses are likely lower, but it is a HUGE peace of mind knowing that you can pay your bills when not working. It's not as sexy as investments, sure, but a good HYSA can give you a steady return and sense of security. Lots of rules of thumb out there, but IMO give yourself a year for an emergency fund and then take chunks out to invest as you feel comfortable. Who knows? Maybe you use that emergency fund for a house, or a business, or something like that.

Quietabandon

I would say if you have parents that are willing to back you and have a sufficiently secure financial position and are willing to bail you out, then I think you can have a smaller fund, like 3 mo vs 6 mo in a HYSA.  Also remember your parents money comes with your parents control. So are your ready to move back in with them if that is the condition?   Your parents may back you unconditionally. They may not. 

DaemonTargaryen2024

>Is an emergency fund really that necessary? 27 years old Of course? What if you lose your job? >I can quickly access \~$40K in highly liquid investments if it really comes to it What investments, specifically? What if they were to lose 30, 40, 50%? Or more if it's non-diversified. >and I am fortunate enough that my parents would have my back if needed in an actual emergency. Of course I'd pay them back in time but they would want to help me protect my investments. Respectfully: grow up. I'm not saying never use a social safety net that's available to you, but you shouldn't throw caution to the wind on the assumption that you can fall back to your parents if it fails. You need to act like an adult and learn how to make responsible decisions, manage your money appropriately, etc. Also, what if your parents *can't* take you in? What if there's another 2008 and they lose their job, house, and/or a big portion of their retirement savings, and have to downsize into a small apartment? What then? >Being pretty young still I just see it as being worth the gamble that I can pump any extra dollar I have into an investment than sitting around doing nothing or at best be in a hysa. Mathematically, obviously. But I see this as stunting your emotional maturity. That's the point of a HYSA: to do nothing, i.e. *not* lose 40% when the stock market crashes, so you can use it to survive a job loss, recession, etc. >Anyone else have any insight beyond just the generic everyone needs an emergency fund or don't count on your parents? Other than that Mrs. Lincoln, how was the play?

take_care_a_ya_shooz

Been laid off for a year and had to deal with cancer during that time, with a kid and a mortgage. Expensive. If my emergency fund was $40k I’d be broke by now. HYSA with proper planning saved my ass.

Lucky_Platypus341

Yes, but in some sense you already have an EF — your liquid investments and parents. But…think about it this way… If the market suddenly dropped in reaction and your liquid investments were now worth 20k, would you want to sell them if you needed to. Or, if your car needs new tires and you have NO EF, would you want to run to mommy and daddy for $1k? Would you want them to have to liquidate assets in a downturn so you don’t have to? Don’t get me wrong — it’s GREAT having parents that have your back in a REAL emergency and investments (that may be liquid but are higher risk for the higher reward, meaning should be held long term). Same way havin a higher credit limit on a CC is great for instant payment to buy time to access emergency funds. IMO parents should be more “break in case of emergency” not an for smaller “emergencies”. ;) And that’s kinda the point, too. “Emergencies” can mean any unexpected expense you hadn’t budgeted for or it can mean unemployment or something catastrophic. Some people budget for maintenance and repairs (tires, car breaking down, new roof) while others just increase their EF to cover those expenses. Honestly that’s more a bookkeeping issue since both are keeping funds in a HYSA or other safe & liquid account. IMO you want to have enough SAFE LIQUID funds in an EF to cover anything between something-you-can-put-on-your-CC-and-pay-off-in-full-by-the-time-its-due and moving-into-your-parents’-basement type emergency. Maybe that’s a lot lower amount, say 2mo expenses, than someone who doesn’t have the backup.

MainRemote

Do you have a high limit credit card (20k+) to bridge the timing gap of selling investments? Can you take the utilization hit on your credit score (knowing that new jobs/housing will check it). Do you want the risk of a market downturn to affect your emergency fund? Even bonds NAV can go down, all investments come with some risk of loss.  Do you want to have to borrow from your family? Do you want to show up to Sunday dinner feeling like your parents have something over you? Ho long would they or can they support you? What if they don’t have the same ideas of how their money should be spent as you.  I personally just have enough to cover living expenses for 6 months in a HYSA. That way I don’t have to worry about any of that stuff. 

CopeHarderDweller2

You have the right idea but the only flaw is if you need money now and the market is down you will have to sell positions at a loss to get that cash. Find out what your max emergency would be and keep that accessible in a HYSA. At your age and if you don’t own anything expect a car you can get away with a 5000 emergency fund and invest the rest.

Heyhayheigh

Nooo. Not in Roth. Real, growth oriented investing is meant for Roth. VOO QQQM VUG, even mag 7 that you hold personal convictions in. SGOV is what you use instead of HYSA or CD’s. For emergency funds or large known expenses (think dental work or roof repair or large known vacation). You spend from there.

Crazy-Cat-Lad

Like I get it but just for my education.... say you make $100 in Dividends (or Interest) for the year and, just guessing, have to pay $20 on it. Aren't you up $80? I googled that phrase too. Basically I try to live by, make more money than I spend. And if I have extra money laying around, I want it to be earning me something. It seems like there are a lot of 'correct answers' on how the money should be earning you something though - stocks, HYSA, Roth, CD, bonds etc...

Heyhayheigh

You should google “dividends are not free money”. You will have slower growth in dividend plays and you will pay needless taxes in taxable account. Instead of HYSA do an auto buy for SGOV in brokerage account. Being a sole provider is more reason to invest correctly. You’re sacrificing wealth building for “feeling rewarding”, you just don’t realize it. Best of luck either way.

Crazy-Cat-Lad

Ehh its kinda rewarding and I like the idea of it (like APY on my HYSA). I am biased towards funds that provide dividends though and do have VOO on my UTMA account I set up for my son. That and VXUS I believe. Haven't bought into QQQ(M) yet but have researched a bit. Between my auto-investing deposits, including weekly into HYSA, I'm up to like $125/week. I'm more or less the sole provider for my family in expensive CT so don't want to overreach.

SubstantiallyC

I keep $20k in Fidelity Cash Management so I can just set up automatic credit card payments and automatic brokerage account investments without having to check my balance to make sure it has enough money in it before withdrawals are processed. It's worth getting a slightly lower interest rate vs the highest available HYSA for the simplicity and stress free banking a Fidelity CMA provides. I keep like $500 in a Chase checking account in case I ever need a physical bank location for some reason. I go 1-2 times a year.

imrickjamesbioch

Save $7,051.86, withdrawal $15,593.99 and deposit it into IRA or HYSA! Then wait…

Slade_Riprock

Similar situation but within 20 yrs of retirement. Have a vested pension I'm plan to work out to retirement. A small vested pension that will pay me 300 a month at retirement. 401k 6% match plus 1% free (13%) it has 125k in it. Making 100k a year. According to the planners as long as I don't get fired before retirement I'm set well there status quo. I have 125k in cash doing zero (dumb). I want to break that up into a 60k emergency fund for incase of job loss. 30k for a emergency house/car/human/cat repair fund Then 15-25k for first forey into general investing Then depending on my risk aversion the remaining 10-20k in everyday spending, bills, etc. Was thinking HYSA for each of the 60, 30. Then a Fidelity for the 15k investment with something like an Market ETF or whatever that earns a better return than savings. Thoughts all around.

Hismadnessty

Do yourself a favor and set aside those cap gains taxes now. Put them in a HYSA or $SGOV until next year. Congrats on the win 🤜💥🤛

iammowgoud

34 ETFs: Europe 27.8% North America 58.9% Asia 10.4% Emerging Markets 2.6% Other 0.4% All of that is only 1/3 of my net worth The other two thirds are 1/3 HYSA and 1/3 single stock (employer RSU)

lesteroyster

Just retired. I have 3 years expenses in an HYSA/MM - about 12% of retirement portfolio. Going to bed, good night.

Anal_Bleeds_25

I'm 41. I have ~$162k in a military TSP L2050 fund, ~$20k in a Roth IRA at Morgan Stanley, ~$318k in a Morgan Stanley 4% HYSA, and ~$86k in a 4.25% credit union CD.

Fuehnix

Depends on the interest rate you get. We got our car with 0.9% interest rate because of a sales event they had. So we just hold onto the money we would have used to buy it, keep it in a HYSA that doubles as an emergency fund, and make payments from the HYSA.

TheMallard1

My HYSA is performing better than SPY

TheoryInttro

Three months expenses in a HYSA, 3 more in a money market fund - slightly better yields than a HYSA, a little bit illiquid and not as safe as the HYSA so don't put the full emergency fund into it. If the 50k is already in index funds just add to that with the rest.

Atlantis_Island

You should be getting monthly interest payments on the money you've put in. You can see it under history in your account. The reason you don't see "unrealized" gains is because all the interest payments are realized gains that you will pay taxes on in the year you get them. There are no unrealized gains in MMFs, just like you don't have unrealized gains in a HYSA.

atoice

I wish I kept less than I do. While I have plenty in brokerages, with any of them 30-50% cash. Keep $20k min in checking and even more in HYSA. Should move into brokerage for investing 🙄

Messup7654

Only enough for fixed expenses and a buffer for fun stuff the rest goes into HYSA then investments and some spending is done with credit cards

Sick0h

HYSA is smoking my port

ryoon21

Same, my checking is extremely minimal and applies to all the things that won’t take my Amex. $500 buffer is my rule of thumb. I use Amex savings to auto-pay my Amex card on the last day it’s due to maximize interest from HYSA.

Ok-Barracuda39

How? $1,000,000 sitting in a HYSA alone nets you that 40k... Be better, king.

ski_town

1-2 months worth in checking account, 6 months in HYSA, invest remaining

__redruM

Even “holding cash” doesn’t really mean you’re in cash. SGOV or HYSA is the minimum. But yes 2.4%, 2022 and 2023 were 6-7% for the full two years. That’s still with us, and people feel inflation is worse than it really is because of that 6-7%.

Hot_Soft_5626

Compare the rate of return of the S&P over the last year which is approximately 11%. Compare that to the rate of return on a HYSA over a similar period. You’re lucky if you get 4.5%. 11% is more than double that of 4.5% and the 11% doesn’t include DRIP.

pastusodoug

Cash in HYSA feels great tbh. All these people talking about speculative commodities like it’ll matter.

whosthatguy123

Wait so you have 3-6 months of your EF in HYSA but then also have more EF in sgov?

whosthatguy123

There are long winded answers that you can find on this. But generally your 3-6 months savings isnt ever in your checking account. Its in a HYSA so that the interest can help against loss of money value from inflation. After you have your emergency fund and debt paid off (any debt with interest >5%) you can invest the rest. Very oversimplified but thats the idea for your emergency fund

Disastrous-Wonder153

I'm not who you replied to, but I use a Fidelity brokerage account like a checking account. So it's earning interest in a money market fund similar to an HYSA.

maisondemimi

2 months of bills. everything else in HYSA, invested, or in SPAXX.

Wowmuchrya

You make 5% in 2y. That's not infinite money that's worse than a HYSA.

Various_Couple_764

Many people invest for growth in index funds and then establish a 6 month emergency cash savings. After that? Some people start saving cash in HYSA, CD or just an ordinary back account and theyjus keep adding to it and occationally I see people online with between 100K and 300K in cash. and at that point they don't know or just continue to save. People have various reasons to hold cash The ammount really doesn't mater. Why maters more. For invests some want cash to jump in after a market crash some fear a long downturn and hold much more cash. But in reality if you have 100K you shouldn't be holding any more cash. Because you would be better off investing it. Some buy grwoth index funds in a taxable acount with the plan to sell that off if needed in. But in my opinion a better option is investing it ins taxable account for dividend income . 100K invested in a dividend fund can generate between 4K a year (at 4% yield. to 10K a year at 10% yield. There are a lot of good investments from 4% to 10%. You can use dividend income to slowly replace your emergency fund .You could get enough dividends per month to cover all of your living expenses which would make work optional and retiring early possible. I discovered this possibility late but was able to retire at 55 with 5K a month of income. And I hav more than enough growths in retirment accounts.

orangeyougladiator

It’s not so bad, basically just have to put half of everything you withdraw in to a HYSA and wait until tax time

Imkitoto

Between $3,500-$5,500 My HYSA is with a different bank (AMEX) than my regular checkings (Wells Fargo) and I’m too lazy to always transfer. Because it takes about two days to hit the account from the other. So I transfer once a month. One in the beginning to transfer the “left over” balance after investments, bills, etc have been taken out and all ccs paid, If I have over $4k I transfer the overage to the HYSA and then start over again.

Inevitable_Pride1925

checking at 1% Interest: 1 months expenses. HYSA: attached to checking 3 months expenses. Anything over that I move to a higher yield money market that takes 4-7 days to complete a transfer to. My plan is keep an additional 3 months in this account for a total of about 7 months expenses set aside. But I’m in the process of remodeling my house, buying furniture, and paying for some oral surgery so I keep spending faster than I can accumulate money into my money market. Once the money market is full any extra goes into a taxable brokerage. I fully fund my Roth IRA and traditional 403b before I transfer to the money market as well.

PTTCollin

It's not really the 10k checking so much as the "by default it goes into HYSA and the I invest some every month". That's like hundreds of thousands sitting in a HYSA for no reason. That said, having functionally 1 month's float in accessible cash is reasonable to me. But the way this person is describing things, I doubt they're spending 30k/month.

burn_bridges

15% in short term bonds (rotating through in 3 month cycles currently, as of Q4 25). Another 5-10% in my HYSA as emergency fund that could be deployed at premium opportunities (highly unlikely). The rest is all staying the course in VT.

Hot_Soft_5626

My investments are worth like 50% more than if I left my money in a HYSA

GailaMonster

We keep more (25k) but our HYSA gives 5% (and until recently more) so I don’t feel as bad keeping a bigger cushion. This represents 6 months of expenses, more if paired with unemployment. A layoff early in my career has me permanently skittish about having emergency money.

66NickS

$1.00 I pay everything directly from my HYSA. Which really is a couple automatic transactions and my two main credit cards.

Fubbalicious

For checking, I just keep a $1K balance as a buffer plus my monthly autodraft bill and then move money in and out from other higher yielding accounts (eg. HYSA, MMFs, brokerage) as needed. I rarely pay by check or debit and instead prefer using my credit card for better fraud protection and cashback/rewards. If I need more money in checking, I can easily move funds in and out via a mobile app. I intentionally keep a low balance as a way to maximize interest, but mainly to limit loss in case I'm a victim of fraud, such as my debit card getting swiped or a check writing scam. I also turn off overdraft protection so additional funds can't be pulled from my savings as well as leave my debit card disabled except when needed.

jiggeroni

1000 in my bills account, 500 in my daily debit account. Those are minimums. I leave enough to pay bills and spend for 2 weeks. Everything else straight to investing or HYSA.

steady_compounder

Yeah they are serving the same purpose basically. The main difference is SPAXX might give you slightly better returns than a typical HYSA right now, and SGOV has a small tax advantage since treasury interest is exempt from state tax. But functionally they are both just safe places to park cash. If your HYSA rate is competitive I would just pick whichever is simpler for you to manage and not overthink it.

p1ccard

+500 over my monthly expected cash flow, for a small buffer. The rest stays in a HYSA.

SheriffBartholomew

My checking account pays as much interest as a HYSA. There's no point in having emergency money if you can't get to it in an emergency.