Hey everyone, I wanted to get your opinion on my current financial situation and see if any of you can offer tips or advice on how I can maximize my finances. I like to think I’m doing everything right!
I am currently a 32 year old male living in Southern California working as a licensed civil engineer. Single. No kids.
My salary: $130,000
Employer 401k: 6% of salary with 25cents per dollar match. I currently contribute 9% of my gross paycheck.
Roth IRA: I maximize my contributions every year ($7,000 for 2025) into the S&P 500 and some bitcoin.
I live in a 2br 2bath apartment paying $1750/month including utilities.
Car payment is roughly $650/month including car insurance. I can pay it off in about 2 years.
I save roughly 25% of my net pay check and throw it into a brokerage account where it just sits in a cash account (I have roughly $100,000 in liquid assets sitting there).
I have no emergency fund, no HYSA, no HSA(I have good health insurance), no FSA. Just a checking account, my brokerage account, Roth IRA account, and company 401k.
My Net assets total around $190k.
Is there something else that I can be doing with my money that you guys are doing which I’m not aware of? Should I be investing into a HSA account? Or should I throw most of my 100k cash into an index fund?
Answers and just any sort of insight would be helpful! Thank you.
What do I do with the cash sitting in my brokerage account?
byu/Ayyyeah17 inpersonalfinance
Posted by Ayyyeah17
9 Comments
At absolute minimum you should throw it in a HYSA for 3%-4% returns.
Move $25k into a HYSA. This is now your emergency fund. Leave the other $75k in the brokerage but invest it in an index fund like VOO.
An emergency fund of 3-6 months of expenses should be in an HYSA … alternatively if you are comfortable waiting you could put that amount into something like SGOV or a Money Market fund to gain a similar amount of interest monthly.
Continue to max your Roth as you’re doing, I personally don’t think bitcoin makes sense but that’s your call not mine.
With your surplus in the brokerage r/bogleheads can give you some simple, long term investing advice that you don’t have to overthink- index funds are just fine- look up VTI if you haven’t and just think about what say 50k could do if the returns stayed even 70% as good as the past 5 years. Investing requires patience so just keep your focus and take a deep breathe so as not to get caught up in day to day market stuff
So.. your sitting on too much cash. I mean I’m not a financial advisor so I’m not going to advise on what fund to buy. But.. you should do something with that extra money.
Ideally you should have some kind of emergency fund. And any money you want into a sinking fund to buy something within the next few years. Everything else needs to have a purpose. It needs to be invested. Or spent. Or given away. But it’s your choice what you do with it. If I woke up in your shoes, yes. I’d buy some kinda fund that roughly tracks the market.
$100k sitting in cash is losing to inflation. Move $20-30k to a HYSA for emergencies, dump the rest into VTI or VOO. You’re already doing S&P in your Roth so you know the deal. No point letting it sit there doing nothing when you’re 32 with solid income.
You NEED to have an HYSA as an emergency fund. You don’t want to rely on selling stocks and paying tax if you need unexpected expenses.
6 months worth of expenses is ideal, but something.
You can’t just choose to have an HSA, you need a HDHP that supports one.
Once you have a stash in the HYSA, you should go back to max the 401k.
THEN you can put whatever is left in the brokerage.
And the IRA/401k/brokerage should be a total market index fund like VTI or VT (over VOO).
As another option, instead of the HYSA, you can invest in SGOV in the brokerage. Just as secure and liquid, but gives you a state tax deduction. I think its slightly higher rate than a lot of HYSA too.
Why wouldn’t you max your 401k before contributing post tax dollars to your brokerage account?
Max HSA next, which is also tax advantaged. You’ll be investing this and using it much later when you actually need it.
Then put your emergency fund into a HYSA. Dump everything else into index funds, potentially splitting off some into high yield savings for other financial goals (house, car, trips).
You clearly have the discipline to save, you just need to be more effective with where and how you do it.
I agree, move $25k to HYSA or money market paying 3%+ as emergency fund. I would immediately pay off your car loan and free up that $500 or so a month and stop paying 6-9%interest on that loan. Take your left over cash and invest in VTI or other well known growth etfs.
Even if you are healthy and have good health insurance, I would still max out your HSA if your employer makes one available to you. HSA are magic. Contributions are tax free (except they will be taxed in your CA income tax 😒). You can invest the money like any other investment account and any growth you see is tax free. And when you take money out of it for qualified med expenses, the withdraws are tax free. You may not need it now but think ahead to long term care and end of life care. It’s expensive AF and most people are unprepared for it. If you max your HSA and invest it and see 8% returns, you could easily be sitting on $500K or more just for health care later in life.