Hi!
So my wife and I have $200k+ in a HYSA (3.99%) but I feel like we should be investing more and making our money work for us better. We have a goal to buy some land and build our dream house within 7 years which is going to be a million dollar project if not more.
Some info:
Yearly income: ~$214k around $7k a month after taxes, retirement, insurances, etc.
Monthly bills: ~$3500
Our only debt is our mortgage (~350k remaining)
We typically just dump the extra money into the HYSA but I want to do more with it. Should we get a proper financial advisor? Is there a place we can start looking to get some insight as to what we should do?
How to go about making our money work for us instead of sitting in a HYSA?
byu/Mini_Sprinkle inpersonalfinance
Posted by Mini_Sprinkle
9 Comments
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
Choose the highest risk adjusted return for your next $. If you have no debt besides mortgage, highest priority might be getting free money from employer 401k match. If you don’t have any guaranteed free money options, highest return might be tax advantaged retirement accounts. There are spreadsheets with this type of order in the financial Reddit subs.
However, if you want to withdraw the savings in 7 years, then the reduced timeline changes things. Avoid investments for which you cannot easily withdraw in 7 years or have risk of loss beyond what you can tolerate in 7 years. This might be x% market index / y% fixed income, rather than 100% market index or 100% HYSA.
First, follow the guidance to financial health in [the flowchart](https://imgur.com/personal-income-spending-flowchart-united-states-lSoUQr2). That covers the basics regarding debt, cash savings, emerengecy fund, and retirement investing via 401k and IRA accounts. You need to be doing all that.
If you’re left over with more cash than you need in a HYSA, and you’ve funded your tax-sheltered retirement accounts fully, then you can deposit money in a regular taxible brokerage account (Schwab, Vanguard, Fidelity) and buy various securities with that money. Typically you want index funds (or ETFs) which are collections of stocks. Stick to the basics, let that money grow for decades, and you will see very good gains. Look at the boggleheads ‘three fund portfolio’ for specific picks of what funds to buy. There is no need to get complicated or fancy here.
That sounds like a formula for being house poor. 2-3 times your income is a better target.
Monthly investments in an SP500 and NASDAQ 100 ETFs. Dollar cost averaging.
SPY and QQQ.
put $1500 in each every month. Automatic deduction.
Something isn’t computing about your income and a multimillion dollar house project. What aren’t you telling us?
If you hire a financial manager hire someone who charges hourly or fixed rate not commission.
But you guys can easily stick it into index funds and high dividend stocks your self
Just buy index funds, that’s it
Hire a cleaning service, that will make it work for you