HYSA

mjk_49

$2k is honestly a decent amount to start learning with as long as you don’t go all-in on risky option plays right away. For mobile apps, most people usually mention Robinhood, Webull, ThinkorSwim, etc. but I’ve actually been testing DiroxTrade recently because it gives access to more than just stocks/options. You can trade crypto, forex, commodities, indices, and options-style setups from one app which is nice if you eventually want to branch out. A few things I’d recommend as someone starting: * Don’t try turning $2k into $20k fast — that’s usually how beginners blow accounts * Learn basic calls/puts first before touching leveraged trades * Use demo/paper trading for a while * Focus on risk management more than profit One thing I liked with DiroxTrade is they have demo accounts + copy trading, so you can literally watch how experienced traders manage positions before risking too much yourself. And yes — if you make profits, you can absolutely move money into a Roth IRA or HYSA later. That’s honestly smarter than constantly gambling profits back into trades. If you want to explore platforms before committing: Dirox Trade

xxwww

If risk is a deal breaker then HYSA, Or Fidelity/Vanguard money market funds to at least match inflation for the least amount of effort if he already has an account

CD274

How did you manage that, HYSA are more

xxwww

Is it just like sitting around collecting dust. Is it part of his retirement savings? HYSA are terrible unless it's critical to avoid short term volatility. Index funds might drop 30% on a very bad downturn but realistically it would probably recover within a year or two if recent history continues

FullDerpHD

That's basically what I am, I use the fidelity version though. I'm up about 10% atm. I've read a lot of research that basically say time in market > any other strategy. Trying to time the market? Bad Short term / day trading? Most people lose their ass. It is hard to not gamble though, so what I do is keep a pretty beefy emergency fund in a HYSA, and if I feel like the market is dipping I just drop in a extra big investment to capitalize on the recovery when it comes around.

KentDDS

pretty risky; stocks sometimes go down 20, 30, even 50% and sometimes stay at those new levels for decades. Some stocks to to ZERO, then the game is completely over. So long as you are accepting of this risk for your "savings account," then you're fine. If you don't think you can tolerate those kind of losses, I'd reconsider my strategy for savings and perhaps would consider a HYSA or a short term US Treasury bond fund instead.

smarmy1625

If you can make 4% or more just consider it a HYSA

Paul_Robert_

Underperforming Buffet - 🤷 Underperforming SPY - 😓 Underperforming a HYSA - 🫩 Underperforming leaving it in cash, under your mattress - 🫪 Underperforming fartcoin - 💀

tkhan456

A savings account is pointless. Emergency fund in a HYSA like Vanguard Cash plus. Everything else in stock. Diversified etf/index fund. Maybe a small amount for day trading if that’s your thing for fun, but the reason just in indexes. If the shit hits the fan and the economy collapses, your money in your savings account won’t be worth anything anyway

Various_Couple_764

You could put the money in aa taxable account and invest in a dividend fund Like QQQI 13% yield. Turn off dividend reinvestment That way the money goes into money markets account (similar to HYSA The dividend would go into the money market account and then when possible deposited ton the TFSA or FHSA and FHSA account. The 13% yield for QQQI is 13% so 100K will generate 13K a year. you can feed in those accounts. This means you are using your inheritance to to reduce the ammount of work income your are currently devoting to savings Now I don't live in canada and I don't know how QQQI with be taxed for you but in the use it generates ROC dividend which makes it a tax effacent fund. in the US. if similar tax laws exist in Canada it won't genterate much tax. Fut that said a portion for eh dividend from QQQI can also be set asside to pay any tax the fund generates.

OovionOfficial

At 21, the biggest advantage isn’t finding the perfect allocation, it’s time and tax shelter compounding. Keeping most of it in VEQT and slowly moving future inheritance money into TFSA/FHSA room over time is probably the cleanest approach, because a taxable account at your age can quietly create a much bigger tax drag than people realize once compounding kicks in. Sitting entirely in a HYSA while waiting for contribution room sounds safer psychologically, but inflation and missed market years are real costs too. Honestly, the fact you’re thinking about account structure instead of chasing random stocks already puts you ahead of most people inheriting money that young.

OovionOfficial

At 21, the biggest advantage isn’t finding the perfect allocation, it’s time and tax shelter compounding. Keeping most of it in VEQT and slowly moving future inheritance money into TFSA/FHSA room over time is probably the cleanest approach, because a taxable account at your age can quietly create a much bigger tax drag than people realize once compounding kicks in. Sitting entirely in a HYSA while waiting for contribution room sounds safer psychologically, but inflation and missed market years are real costs too. Honestly, the fact you’re thinking about account structure instead of chasing random stocks already puts you ahead of most people inheriting money that young.

OryxDaMadGod

18% over 4 years in the biggest bull market in the history of markets, congratulations on your 5% CAGR and barely outperforming a HYSA.

FriskyHamTitz

Provided there are no early repayment penalties, and no other fees associated with the loan. just putting it on a HYSA at 3.5% would be free money, and if the interest rates changed for the worse you could just pay it back. Wheres the loan from?

Muted-Jackrabbit

Access to my money after tax on my paycheck, not removing money from investment accounts. I generally don’t touch the accounts. Investing on my own helps me build discipline financially. Kinda why I haven’t been maxing my Roth the past few years. I had no discipline, I felt since my 401k was covering my retirement why care for a Roth? Now, I want to keep 401k contributions, max Roth yearly, fund my brokerage account while still having a fully funded emergency fund (33k) in a HYSA. Lowering my 401k contributions right now allows me to build discipline & learn the game. (Your Second response) The way you broke it down helps me understand it & makes sense in that aspect. I’ll max the 401k contribution (almost my entire check) the remaining 3 months of this year. In the meantime I’ll up it to 12% from 8%. I’m definitely going to max out at $24.5k before the end of the year. Note: fishing offshore is my main hobby during the summer which takes a lot of funds. yes, this is about retirement but I still want to actually live. so holding something off a few months isn’t a big deal to me especially since I’ll contribute the max 24.5k. Thanks again for the way you worded everything, it made sense to a beginner.

PeaceOut957

Wouldn't I have to pay taxes on my $110,000 salary anyway tho?  I'm bearish as fuck btw sitting with like 80% of my cash in HYSA waiting for a fucking chance to get in lol. I'm actually pretty pissed and was making my comment out of sarcasm. Surprised no one got it but I guess that's how bullish it is in here. To your point hopefully that means the top is in. 

mis-Hap

If you're young, you probably want to have more money in stocks for higher long term returns. If you're retired, probably better to have more in HYSA to protect you from the inevitable stock crash, especially while stocks are at ATHs. Based on having less than $150k, I'd say you're young, so I'd personally recommend a greater concentration in stocks. Personally I keep an "emergency fund" in HYSA & checking. That's generally recommended at 3-6 months living expenses. My 401k is diversified in various stocks and bonds. The rest of my spare money goes into my stock picks.

AffectionateAd5397

At 23 I lost $50k. Stock options. Trust me, it will come back. Step away from options- invest into ETFs/Roth IRA. Keep a majority if your money in a HYSA. Dont try to recoup quickly- this is just a lesson, dont repeat it.

LowLokiKey

Bro notes =/= CDs or HYSA I mentioned this in another comment. T Notes would be the move as the core investment

zwizzardz

It doesn’t matter. My HYSA, Retirement, and taxable brokerages are all different platforms. Choose what’s best for you. If you want single login convenience the stick with Fidelity.

szakee

3 years? HYSA or your pillow

nicegreekgoy

Considering a HYSA will give you >3%, 5% is pretty simple. Hell, you could sell a 12 month covered call on Nvidia shares at a $150 strike and you’d net 7%. Plus you’d get the whole gain up front instead of month to month. The downside is that you’ll have no liquidity on that cash unless you buy out but you’ll be giving back a significant portion of that 7% to do so. If something catastrophic happens and Nvidia tanks below $150 a year from now, then technically your gain is wiped out. But, if that happens, good chance your money would have gotten wrecked anywhere you invested it outside of a HYSA.

TheoryInttro

Been holding them for a while. Opportunity cost of staying in the trade and all, but still in the green and if the correlation between oil dumping and metals mooning holds through next week it'll be - well, still not worth it but at least barely better than a HYSA.

winterrules91

The only 'safe' investment in a situation like this is a HYSA, and even that can screw you over if rates are cut like the president wants. Be careful.

Detr0yt

And if I was you.... The money you put aside.... Start up a HYSA (HIGH YIELD SAVINGS ACCOUNT) WHICH YOU WILL GET ABOUT 4%. LET THAT TAX OWED MONEY MAKE MONEY FOR YOU FOR THE NEXT YEAR... SO LET'S SAY YOU PUT 4k aside for taxes..... And your getting 4%, a year from now you could have maybe $200 in interest free money...

Deep_Pattern7103

Yeah I’ve thought this through and ran the numbers. I’ll be putting the expected tax amount into a HYSA!

Shiz_in_my_pants

Even selling at zero and breaking even is still losing money. You still lost to: * Inflation during the time it took to get back to zero * Any interest it could have gained during that time just sitting in a boring money market account or HYSA * Any gains it could have made just sitting in a SP500 fund during that same time

you-dont-have-eyes

Diversification/index funds, long term thinking, keeping enough cash on hand in guaranteed low yields like MM or HYSA

wet_Tap_5578

Emergency fund needs to be accessible in a moments notice. HYSA will allow the money to grow with no risk of the principle shrinking. Off you invest in stocks out could depreciate rapidly.

Weekly-Tax-3137

Oh absolutely! QQQI is paying about 14% APY and I have about $260K invested. Stock price has gone up about $20K in the past couple months as well. Or you could go the 0 risk route and put it all into PiBank which is a HYSA paying 4.4% APY!

Sufficient-Wolf1596

$2k is enough to learn with if you keep position sizes small. Robi͏nhood is easiest for beginners, Web͏ull is decent too. I’ve been using Liq͏uid more lately since I got tired of juggling stocks, crypto, and hedges across different apps. Having everything in one place honestly makes managing risk way easier.Just don’t jump into options before understanding theta decay and risk management because that’s where most people get cooked. And yeah, you can move profits into your Roth IRA or HYSA anytime, just remember gains are still taxable.

ZeroSumGame007

Got a nice $17,000 bonus for. Loving investments there. The $10 per month fee is covered just by having their HYSA. I’m Loving it so far

NobodyGotTimeFuhDat

Not all HYSA allow you to instantly withdraw funds or to immediately use them to engage in a monetary transaction. You do not fully understand them as well as you think you do. “No, **not** all High-Yield Savings Accounts (HYSAs) allow you to make purchases instantly. While many HYSAs offer high liquidity for emergency funds, they are designed primarily for saving and generally lack direct payment features like debit cards or check-writing capabilities.” https://www.pnc.com/insights/personal-finance/save/pros-and-cons-of-a-high-yield-savings.html

NobodyGotTimeFuhDat

Not all HYSA allow you to instantly withdraw funds or to immediately use them to engage in a monetary transaction. You do not fully understand them as well as you think you do. “No, **not all** High-Yield Savings Accounts (HYSAs) allow you to make purchases instantly. While many HYSAs offer high liquidity for emergency funds, they are designed primarily for saving and generally lack direct payment features like debit cards or check-writing capabilities.” https://www.pnc.com/insights/personal-finance/save/pros-and-cons-of-a-high-yield-savings.html

BrianLefevre5

It doesn’t matter? Just popping it in a HYSA at 3.5% is an extra 30k a year in interest. Keep 800k in a non-interest bearing checking account isn’t saying fuck you, it’s saying I’m fucking regarded.

Felix_Aterni

I would have been better off in a HYSA let alone a buy and hold

NobodyGotTimeFuhDat

There is no single standard that universally applies to everyone. I have money sitting in a HYSA (\~$120k), but I also always have at least $50,000 sitting in my checking account for emergencies (heaven forbid I get into a car accident and my car is totaled, or I have a sudden medical expense which requires surgery and-or hospitalization, or some major home repair, etc). **I do this so that I: 1) don’t have to sell and incur a penalty or tax, and 2) have liquid cash readily available (that is, not tied up under red tape).** I’ve been saved multiple times because I suddenly had a huge expense and was able to instantly pay it because of my $50k checking balance. This is what best works for me, so just because you decide to do something different it doesn’t mean what I — also OP in this case — am doing something wrong.

Acolyte_of_Swole

Desires are infinite, resources are not. As a human, you will always have more desires. Learn which desires are important to you and let the others pass. Reduce your desires and you will find it much easier to be satisfied with life and make more efficient use of all your resources (which includes money and time.) The second major one is to put your money to work for you. Don't let your money be either frittered away on nothing or diminish due to inflation. There are many ways money can be put to work and not all are immediately obvious, but doing anything (other than gambling) is better than doing nothing. Even a 3-4% money market or HYSA is a big step up from money sitting in a checking account, losing to inflation. Auto-withdrawals into savings, brokerage, IRA etc are great, because the money is immediately gone and you don't have to even think about it. You can't miss what you never had. Set up the autopay and forget that money exists.

VinnyTonyBones

In theory, it's possible. I've got that amount in cash HYSA and don't plan on investing it in this market. I have other investments and trade daily but I keep a reserve safe from Wall Street greedy goons. When the global market tips, I'll be buying puts.

Josh_The_Joker

I think the original comment assumed investing 200k in an index fund or something, and so 45k would go into HYSA to gain interest and make payments on the loan. In either sense, the risk is immense. It could work and you could come out ahead, but 245k a lot of debt.

Ok-Clerk393

Dump into a HYSA that's at 3%. Basic arbitrage opportunity.

Monster213213

Yes 25% HYSA, 25% BTC/MSTR, 50% SPY/QQ

CapnCurt81

If I'm doing my math right, he'll repay right at $280,000 on the loan. Putting the full amount in HYSA for 5 years at 3.1% (which is about average right now) for the same time period will yield $286,000. It's minimal risk, but still risk, to make $6,000 profit over 5 years is a pretty foolish move.

LowLokiKey

HYSA are not fixed. If interest rates drop youre toast

PeteDub

A 4% HYSA

Josh_The_Joker

This feels like wise advice. Putting the extra in a HYSA that pays 3%+ would still generate profit. Debt is always sketchy, it’s not your money. I wonder where he did getting a loan that size at that percent.

PointUpstairs2667

I was in almost the exact same spot a while back, wanting something I could pull out of quickly but still get more than what a HYSA pays. For what it's worth, I've noticed short-term Treasuries or money market funds tend to be a go-to for that balance of liquidity and low-ish risk. Honestly, if you're on Schwab already, those are pretty easy to get into, but I've also looked at Vanguard's equivalents just to compare yields now and then. Guess it kind of depends how much hands-on you want to be, but I've found it's mostly about weighing convenience vs squeezing out an extra bit of return. If you ever hit a wall or just want a second opinion on something, happy to share who helped me (and my mistakes). You got this

Sea_Condition_6999

Put it in a HYSA and wait 69 years

yourrich_bff

A HYSA is definitely a smart place to keep money safe and earning interest, but I’m focused on helping you grow beyond just savings-level returns. The goal here is building your capital strategically while still managing risk properly.

First_Funny_9402

“I want something that functions exactly like a HYSA” -> put your money in a HYSA

vSylvr

21M. I max out my Roth IRA each year with 85%Voo 10%VXUS and 5%BND. I have an emergency savings in a HYSA. No debt or car payment only fix payments are car insurance and gas plus groceries. I want to save for a house someday let’s say 10 years from now. I want to invest that money in a brokerage instead of just in a HYSA. I’m going to do 70% VOO and 20% QQQM. What should I do with the other 10%? I want to keep it us stock market only.

TechnicalSleep7501

Yes in Amex HYSA you can get better yield from a different bank.

stockerowl

The bank/tech multiple debate here is the right question, but I think people are measuring the wrong thing. The bull case doesn't really live or die on Galileo. The actual thesis is whether **ARPU per member compounds** as they cross-sell. That's where it gets interesting. SoFi has consistently grown members, but the more important number is products-per-member. As of their last earnings, they were at roughly 1.4 products per member. A traditional bank cross-sell benchmark is closer to 4-6. If SoFi closes that gap, the economics change materially. If it stalls because their brokerage and credit card are mediocre (which, honestly, they kind of are), then yeah — it's a bank trading at 2x book and the premium isn't justified. The bank charter argument is still valid on cost of funds. That's real money. The question is whether the ecosystem can actually trap people, or if customers just use SoFi for the HYSA rate and nothing else. Not a direction call — just the fundamental the thread hasn't hit yet.

Nut_Negative

Open a HYSA in the next 35 mins, trust me bro

dinnerthief

Why sgov instead of just a HYSA

sir-camaris

Been thinking about this lately, since I have a large down payment I'm not going to use anytime soon sitting in a HYSA. Anyone else in this situation? I'm slowly moved some into SPY DCAing

schmiddc

Well, it's not like I don't have an emergency fund, and yes it is in cash.. But too much of a good thing is always a possibility.. I also have VOO and some boring individual stocks like ko in a taxable fund, that I also rely on for contingencies. Could it drop 1000% or more (I've really lost count over 2 decades), the moment I needed it, meaning maintaining it all in a HYSA being the better choice? That's kinda far fetched... I get it, Dave Ramsey and everyone drills in the need for an emergency fund. They are not entirely wrong, but everything can be overdone and life is a series of trade-offs.. boiling things down to "full stop" conclusions is simplistic.

RackemFrackem

> I try to keep around 10k min in my bank account Bruh what? You can make payments directly from a HYSA.

HelloTheirCruleWorld

I have 85k on SGOV ( my HYSA )— but we are moving in about 11 months so that is my reasoning

schmiddc

Yes it is, most, nearly all of the time... But there's a time for everything.. in early 2008 going all in on a HYSA or bonds would have made you the smartest person in the room.. And on it goes, this world of our's.

OxRedOx

It also moves, likely up, which the Amex HYSA likely won’t asfaik with Amex

coconut_curry_sauce

Incorrect, homie. Your HYSA is lower % than your loans. Plus you have a thick liquid savings. Personally, I’d keep only 25k in the hysa, max and invest the Roth IRA in VOO, max HSA and invest it into VOO. And then I’d max I Bonds because there’s a 10k limit and the interest on that is higher than HYSA and leave it there minimum 5 years.

trampled93

In my Ally bank HYSA I can assign the money in one account into different “buckets” for different savings goals of whatever (example: vacation, emergencies, home repairs, car repairs, etc). So I’m categorizing the Ally bank savings account into different savings buckets. Also have a money market account with debit card/ATM access getting the same interest as the savings account (currently 3.1%). You can also open up up to 10 savings accounts within your login so I opened up one for my personal spending money allowance.

Acceptable-Leek1546

Personally, yeah you’re leaving a lot of returns on the table. HYSA’s are cool for a 6 month emergency fund. Anything after that (assuming you won’t need the liquidity short term) I would invest.

BradBrady

I don’t think it’s a waste of money unless you’re planning something I have a bunch in my HYSA only because I want to buy a house in the next year and I don’t want to risk that money in the crazy market right now If I didn’t have a use for that money in the HYSA within the next few years then I’d say most of that would be in stocks

hellario

It's to your comfort level. However don't keep significant amounts in HYSA, SGOV is virtually as reliable, will likely have a higher yield, and all the states 8 know of exclude it from taxable income (federal still applies).

NateRT

A lot depends on your age and where you are in life. If you’re younger, I’d invest more in the market (VTI and such) and just let it ride. Time is your friend. If you may need the money sooner for whatever reason, I’d keep whatever I need soon in HYSA or SGOV. I’m in my 40s and I am 70% in the market. My wife and I both work and we make enough to live off one of our incomes if needed. I have hedges with bitcoin and gold and we own a rental property in addition to our house, so it feels pretty secure. Do some more self evaluation and you’ll probably get a good idea of what balance to have.

OxRedOx

SGOV gives 4.3% right now and it’s risk free so maybe look into that or BOXX. How much do you get for your HYSA? Maybe look into higher yield ones, there are some with 5-6% out there and at this high an amount you might as well shop around.

Euphoric_Environment

Yes, having more in HYSA than stocks is completely stupid

samuelpile

\+1 3-6 months is emergency fund if you lose your job or we get a 2008 recession or something. if you get hit by a bus, have a brain aneurysm, bit by a rapid dog, whatever any big spends should be savings goals, you can park it in a HYSA too while you wait but you should not empty your emergency fund for non-essentials

Accidental-Genius

So your HYSA isn’t keeping up with inflation anyways, so why not just kill the loans and be done with it unless you’re going to seek higher returns?

cathbadh

>My theory is that the HYSA earns more interest than the loans cost me lol. Does it though? I know my auto loan isn't lower than 3.1% It's not really a theory if you can look at exact numbers.

BBIQ-Chicken

Not a theory, more my reasoning. I paid off the higher interest student loans, now all my loans have lower interest than my HYSA, even though its not a huge difference.

JRshoe1997

It might seem funny but they’re absolutely right. It’s very easy to buy and hold during bull markets but when a bear market hits people have a ton of trouble hanging on. Heck most people on this sub even problems with that and this is a sub that is dedicated to stocks. Just look at posts and comments back during April 2025 or during the beginning of the Iran War and those weren’t even bear markets. In 2022 we had a bear market and the market fell over 20% with a lot of big name tech stocks fell around 30-40%. You have to a lot of conviction in your buys and be able to stomach seeing your portfolio in the red. If you can’t do that then it’s not a bad idea for you to stick with your HYSA.

FoxChess

You should read a book called The Simple Path to Wealth by JL Collins. But yes, you're wasting money in a HYSA. Keep the student loans but go harder on stocks. And stop buying individual stocks and switch to broad ETFs.

BBIQ-Chicken

I owe 9k on a 2022 Tacoma and 5k in student loans. My theory is that the HYSA earns more interest than the loans cost me lol.

BBIQ-Chicken

My HYSA is returning 3.1%, I graduated into COVID in 2021 and didn't really have any money to invest. Other opportunities, I suppose I wasn't paying attention. My reason for asking in the first place was the feeling that some safer, long-term investments would be smarter.

steady_compounder

I would look at it less as ‘too much in HYSA’ and more as ‘weirdly barbelled overall’. You have a very concentrated tech-heavy risk bucket on one side and a huge cash pile on the other, which usually means the real problem is portfolio structure, not just cash drag. Keeping a solid emergency fund is fine, but if the long-term money is going to stay invested, I’d probably diversify that before adding even more to the same tech concentration.

redbluepurple50

I know this is a stocks sub, but you should read up on ETFs. specifically s&p500 indexed etfs. the s&p500 regularly outperforms most professional money managers. those are the professionals that people pay, to invest their money and/or to outperform the market. also, you mentioned you’re keeping the cash on hand for investing opportunities… we’ve had quite a few pullbacks and market corrections in the past 2 years. rhetorical question- how come you haven’t capitalized on any of those opportunities? no one is telling you that you HAVE to invest in stocks, it seems like you’re subconsciously trying to balance your risk tolerance…. against the “common acceptance” perception that the wise thing to do is to invest your money instead of letting it sit in an HYSA. what is your HYSA’s rate of return? how does that compare to the rate of inflation every year, compounding?

redbluepurple50

how old are you? if you are 20-30 years old, yes - many people in this sub would suggest that you are wasting/lost opportunity for investing that money. if you were nearing retirement, you would get an opposite response. if you’re risk tolerant enough to have that much invested in individual stocks without diversification… why do you have so much invested an HYSA? are you willing to give an honest answer , to get more honest feedback?

BigSweatyYeti

Your Amex HYSA is probably 3.25-3.75%? You’re barely keeping up with inflation. Invest it wisely, keep 3-6 months cash in the HYSA

Ok-Acanthisitta9247

Posts like this make me want to pull it all out and stick it in a HYSA

PassiveF1st

So, real talk... When is HYSA rates going back up? XD

ThatGuyFrmBoston

You are crying for 3% down ? Stocks are not for you cupcake , better invest in HYSA.

Aggravating_Head1215

Honestly, sometimes it’s NOT possible to max your 401K/etc. There’s so many factors at play. Basically, I contribute up to the point where I can afford to pay all of my bills/expenses, knowing that my company contributions effectively amounts to maxing out. The remaining money I’ll either store in my HYSA or use it for travel/buying something. I make decent money but live in a VHCOL solo so that means I don’t have the disposable income to also contribute to a brokerage at the moment. Check how much you spend in a year. That will give you an estimate of how much you’ll need in retirement. Use that to then find how much you’ll need in your accounts. I think a common rule is 25*annual spending. Don’t quote me on this - do your research on how to find your “number”. You can then use online calculators to estimate if you’re on track or need to make changes, i.e., decreasing contributions. I’m not an expert though go so take everything I said with a grain of salt.

aVolatileAgent

This may or may not be what you are looking for, but I hope you find it helpful: We have an only child. By the time she was 8 or so, I noticed her not being as grateful for the things she received as I would have liked. One day, I had had enough, and we decided to stop buying the various things that she wanted (not necessities) except on her birthday and Christmas. In place of that, I told her she was going to be receiving a weekly allowance of $10 (this was roughly 2010). Of that $10, she had to save $2, keep $1 for charity, and the remaining $7 could be spent how she wanted. In addition, I opened her a kids' checking account and got her a debit card. This completely changed how she handled money. She began to prioritize her wants and actively saved for the things that were important to her. She started looking for sales/bargains. As she got older, I started teaching her the basics of budgeting and investing. I emphasized to her that the $2 she saved weekly was 20% of her "income". Once she started seeing her savings accumulating, she decided to start saving 25% of all the money she received for Christmas, birthdays, etc. I initially funneled all her savings into a HYSA. As her balance grew to a few thousand dollars over her teen years, I opened an additional brokerage account at Vanguard to invest her money (100% VTI). I boosted her balance by $250 per month with an IRA RMD I was receiving after my father died in 2009. That RMD wasn't enough to change my monthly situation, and I felt that he would have wanted it to benefit her. When she turned 16 and started a job, she started saving 25% of her pay. Since she wasn't earning enough to pay taxes, I directed all of that money to max out her Roth contribution each year. I added the RMD from my father's IRA each month to help meet the yearly max. She continued this through college graduation. Fast forward to now, as a 22-year-old out in the world with a job and paying her own way...she has almost 10k in a HYSA, 25k in a taxable brokerage, and 60k in Roth. She is continuing to save 20% of her take-home pay for retirement. The other thing I did for her financially was add her as an authorized user on several of my credit cards when she was as young as 12. She never had access to the cards, but I wanted to start her credit history. When she turned 18, she got her own card. I taught her not to buy anything she doesn't have cash to pay for, never carry a balance, and to pay her card off weekly. She called me a few weeks ago to thank me for teaching her about money and budgeting...she said that she would not be able to do what she is doing without that knowledge. She sees what her friends' financial situations are like, and feels pretty grateful for the position she's in now. It made me tear up just hearing that from her. I'm hoping this has helped set her up for success as an adult, at least in the financial sense. I

kinetic_honda

VTI and VOO are broad US market index funds. Excellent way to go for any serious investor. At your age, you have a tremendous advantage on your side - time. Utilize it well and learn the beauty of compounding. Set a budget, figure out how much you need to live for 6-12 months, keep that in a HYSA. Everything else, pile into index funds and just wait. It sounds simple, but doing this for decades without fail will yield tremendous results.

sdrawkcab_dear

Continue to find ways to set money aside in ETF’s or S&P so that you can build up enough for a downpayment on a home. The HYSA is important to maintain enough money for your 3-6 month safety blanket, but that value will not grow nearly as much as an index fund. Buying individual stocks is too tricky for a new investor, managed index funds typically perform better and managed by professionals. Roth IRA/401K is super important to keep investing in for your future, but your 5-10 year goals should be included in saving for a down payment on a home. Also, recommend when you have enough saved - find a wealth management advisor who can help you with planning.

Initial-Magazine2169

DCAing into ticker $HYSA. At least I'm guaranteed to not *lose* money.

ScallionLarge4549

If you want to DCA into the broad market, you can, and you may get a better cost basis by a few percentage points, but statistics say lump sum performs better over time. Especially since holding that cash would technically drag your overall return. What are your financial goals? Do you have a use for that $100k in the next 5 - 10 years? If not, it belongs in the market because that’s where you’ll get your best return over time. The important thing is to put it there and forget about it other than adding more cash to the pile. $22,500 is a fine start. But if I were you, I’d set that $22,500 aside in a HYSA to cover emergencies and whatnot, then plunge the rest into VOO. Time is your most valuable asset. You have the benefit of capital *and* time. Take full advantage. How are you investing your Roth? You don’t seem like a YOLO type. If you’re already comfortable buying the broad market there, then you should be fine doing so in a taxable account. The SP500 has been returning like 12.5% YOY since the end of the Obama administration. We’re still in the early years of a tech revolution. If those returns continue, your $100k will be worth nearly $150k by the time you graduate. And that number grows exponentially if you’re able to DCA a portion of your income into that account over the same period.

xploeris

Oh sure. I sold a put on AMPX, strike 17, expiration Jul 17. It was trading around 18-20 at the time. I got about $330 in premium for it. I've got to reserve $1700 cash in case it executes. If it does execute, I get the stock I wanted at the lower price I wanted - and I got paid $330 to buy it! If it doesn't execute, I keep the $330 and the option goes poof. $330 return on $1700 in 2-3 months is a hell of a lot better than a HYSA or a dividend king - in fact, since the money isn't actually spent, it's still making ~4% in the money market on top of my premium. The risk is that it drops way below $17. At $13.70 I break even; below that I have to buy 100 shares at $17 and end up with an unrealized loss that exceeds my premium.

Super-Loquat3585

35% not enough?? The next crash will violent. A lot of people will get such a wake up call they may end up sticking to HYSA.

pjstarke

I recently implemented a 3-tier cash strategy: -Tier 1 - Fidelity CMA in SPAXX at about 3.3% (functions like a checking account). - Tier 2 - HYSA at OpenBank earning 4.0%. Funds (up to $5,000 daily EFT limit) available in 24 hours. - Tier 3 - Fidelity CMA invested in cash-like high-dividend positions - 10% each of SGOV, CSHI, SCHD, GPIQ, and GPIX. Currently returning about 6.04%. Dividends on all these positions are somehow tax-advantaged. No state tax on SGOV or CSHI, qualified dividends on SCHD, and mostly tax-deferred ROC on GPIQ and GPIX. If interest rates drop I may shift more cash further up the tiers to earn more interest unless I need the cash soon for a specific reason. I’m 5-10 years out from retirement, so trying to build my cash pile/buffer to protect portfolio in down years.

AX_99

Bad idea. HYSA. Don’t mess around with your rainy day fund

Laakhesis

Any money needed in less than 5 years should be in a HYSA.

StegersaurusMark

Huh? Are you saying that the first 100k should be in low-risk assets? Sure, the emergency fund should be in something like HYSA. After that, OP has to decide if there is a goal like buying a house. If so that down payment needs to be safe the same way After that, arguably everything should be aggressive. There are arguments out there that young people should even be leveraged in the market. Essentially that is because a young person has very high human capital (bond like) but very low liquid wealth to invest in stocks. Now I see myself as a pretty confident investor, but I still don’t touch leverage. No way I would actually advise random people to use it, but the same reasoning really says that all of the first invested (not purpose saved) money should be in equities at a young age

Grouchy_Treacle_1639

HYSA. Lending Club pays 4.0%, just an FYI.

Aronjharris23

I recently took all but $1,500 outta my savings and put it in the Robinhood HYSA. It’s accrued more interest in like 6 weeks than it did the entire last year in my regular savings account.

Conscious_Historian9

# 19, New to Investing, Not an Average Situation — Need Realistic Advice I’m 19 and currently in college on scholarship. My fiancé is also in college and working part-time. We have a baby, and because of her disability, most of her medical/living expenses are covered through government programs. We have no debt at all. When I found out I was pregnant, I saved $10,000. My daughter is now almost a year old, and I still haven’t touched it. It’s just sitting in a bank account right now. I only have a couple of hundred dollars in my normal checking/savings accounts besides that money, but I also spend very little personally (maybe $50–100/month). I have a Roth IRA with a couple of thousand in it as well. I also do not use credit cards. I’m trying to figure out what I should realistically do with the $10k. I don’t think I have the personality/risk tolerance for high-risk investing, and honestly, probably not even medium-risk investing right now. I’m also very busy and cannot commit to a job currently because of my daughter’s medical situation and upcoming surgery. That said, I’m naturally pretty entrepreneurial and may start a small side business once things medically calm down. I’ll finish school in about 2 years. After graduation, I have a path toward an entry-level job with the potential for long-term (possibly even intermediate-term) ownership of a small, successful business. What would you do in my position? Keep most of it in savings? Invest part of it? HYSA? add to my Roth IRA? Brokerage account? I’m mainly looking for low-stress, realistic advice for someone in my situation. Also, my state has moderate income taxes and a slightly lower cost of living than places like California or Massachusetts. Are there any state-specific tax or account considerations I should know about for HYSAs, Roth IRAs, or brokerage accounts? Living somewhere like California or Massachusetts also is not completely out of the question in the future because my daughter may need access to certain hospitals/specialists there.

Aronjharris23

You can use Robinhood to start a HYSA as well. They offer 3.75% APY. Free money is always good.