20, I'm sick of never having money and want to learn how to actually save/invest my money
As of now I have $3,200 in a monthly 3% apy savings and I am trying to deposit $1,000 each month. It's 500 at the middle and end of the month as I get payed. I was looking to see if there was better rates or a better way to hold money. I was seeing 4%apy…
As of now I have $3,200 in a monthly 3% apy savings and I am trying to deposit $1,000 each month. It's 500 at the middle and end of the month as I get payed. I was looking to see if there was better rates or a better way to hold money. I was seeing 4%apy savings but I don't meet any of the minimum deposits yet or others that give you 4% for 1/2 year and lower your rate.. I would also need my first 5k to be readily available My goal aside from saving is to eventually be able to live off the interests but short-term to get $300 interest per month My main question would be, is there a faster 0 risk way to achieve this goal, or is the 4%apy the best I can get when I meet the minimum deposit
Collected discussion
hysa is for short term (lt 5yrs) money. Vt, VTI+vxus, total world stock market, over time, has a likelihood to greatly exceed short term treasuries or hysa. How long are you investing for? Lt 5yrs, sgov or hysa is fine. 5+, total market index. You can easily find 4% hysa, such as Barclays select savings ($15 one time fee to join aarp will be made up quickly by the increased apy) and $400 bonus if you deposit 40k for 6mo Click the pf wiki click flow chart. And "advice", "your age" section
I would be investing for minimum 20 years if I stay at my current job as that's the time w/company for retirement. I'm looking into those suggestions right now
look to get 3-6 months of expenses in a hysa as an emergency fund. after that just go for a world etf if you invest that long it will yield good returns.
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Thank you I looked a little into a Roth IRA to my understanding if I then instead of putting 1000 into my hysa and did 500 monthly and then the other 500 to a Roth IRA I would be able to almost max the yearly limit and more effectively invest my money. I don't qualify for 401 match with my employer till next year and so long as I stay it should be sustainable with the raises
Just made an account thank you
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You need 3-6 months of expenses in a HYSA as your emergency fund. The job of that money is just to sit there. It is not to "work for you". Just sit there in case you need it. Like any insurance policy, you pay the premium and hope you never have to use it. For your long term investing, you should start with your tax advantaged space - workplace retirement plans (401k, 403b, TSP, 457, SIMPLE IRA) and a Roth IRA. Always get the full employer match of any workplace retirement plan because that is free money. If you don't have to touch it for present day medical expenses, if your health plan offers an HSA, that's another great way to save for the long term. Only after you have filled up your tax advantaged space should you start looking at taxable investing.
There’s a lovely book, the bogleheads guide to investing. It’s a great intro. If you want money readily available you could just open a brokerage account and invest it in an index etf. If you don’t require liquidity start looking at tax advantaged accounts like iras. If you get really into investing and want to analyze individual stocks, the intelligent investor is a great starting point. I wouldn’t fixate on dividends or coupons. For one the tax rate is higher. If you get a return you can always sell to get liquidity.
3-4% is the standard right now for a savings account. You won’t be able to get higher than that, which is fine for an emergency fund or other small savings. What you need to start working towards is saving and investing for retirement. This is where your money can earn more than 3%, but you will have it put away to not be touched for years. Don’t worry about the $300 interest per month thing. Worry about a budget, saving what you can afford, and being consistent.
Check out Happen Bank. They have a 4% account and your two $500 direct deposits per month will meet the requirements.
You’re on your way. The link to the PF Wiki was auto replied to one of the comments. Start there and come back with any questions you might have. It’s comprehensive and solid advice for someone who wants to get a grip on handling money.
The 4% HYSA is the best non-risk money maker on the market. There are CDs, but they hold your money for a contractually agreed upon time period (6 months to 2 years). Bad idea for emergencies. Investing is for 5+ years. If you can stay employed and invest monthly, SCHD (Dividend ETF) is a great way to grow an income source over the long-term. You just need a taxable brokerage account, an investing broker that offers fractional shares for ETFs, and offers Dividend DRIP. SCHD pays dividends 4 times a calender year. Fidelity or Charles Schwab are great for this and have good Dividend trackers.
Something to observe with savings accounts and their high yields: The target inflation rate in the US (assuming you are in the US) of the federal reserve is 2%. However inflation has been well over this target (over 3%) for the last 6-7 (no...) years, at one point in that time frame it sat at 9%. So if your HYSA is giving you 3% interest, but inflation is at 4% your high yield of savings is actually outpaced by inflation and is -1%. Something to definitely consider. Especially if inflation goes back to 9%, which would leave you with -6% returns during that period.
U need a business to get ahead. Income is the most important thing to build wealth.