19F from the midwest, ive finally reached 15k in savings🙏🏼 I know im young, so im trying to start building my wealth as soon as possible. Im very open minded so dont hold back with any answers.
What should i do with $15,000 in savings?
byu/countingracks inpersonalfinance
Posted by countingracks
9 Comments
Click the pf wiki click flow chart
And prime directive
[https://www.reddit.com/r/personalfinance/wiki/commontopics](https://www.reddit.com/r/personalfinance/wiki/commontopics)
and be thinking long term about what career path you’d like to follow
Are you going to college? Investing in yourself to get a high paying job and build a career is the best way to build wealth
You keep in savings for the 3-6 month buffer of “life expenses”
You should have 6 months of expenses in an HYSA (high yield savings account). This is in case you lose your job, you’re able to afford your bills for 6 months. Also helps if you have an emergency like a flat tire.
Anything after that limit, then I would also keep it in the HYSA if you’re planning on spending a huge sum anytime in the next 2-3 years, such as a new car, etc. Anything afterwards, I would recommend opening a brokerage account and investing (if you don’t have debt; if you have debt, pay it off first).
Depends on your risk tolerance and your plans. Low risk is to have the funds in a high yield savings acct or certificate, or even put it in an IRA. If you have a higher appetite for risk. Stocks/Bonds/Options/Futures is another option. If that’s too overwhelming I recommend looking into index funds. If you’re planning for an education, this will help pay for college or trade school.
I would recommend if your financial institution offers a free consultation with a financial advisor to take them up on it. As they are better qualified (usually) then us random strangers on the internet. If you want to be more hands off they can also usually manage the funds for you too (for a fee of course.)
Research bogleheads
1. Emergency Savings
2. Roth IRA: VTI + VXUS + BND
I currently use M1 finance.
Have you been contributing to a Roth? I’d max last year if you haven’t yet and then start on this year/leave the rest in savings as an EF
I vote for investing in yourself – if you aren’t already in college or some kind of program to train for a good paying job, figure out a path and use this money to help you get there. The return on investment will be worth it.
If you are already in college or a program and the costs are taken care of, I would put half in a high yield savings account and half in a RothIRA. In the RothIRA, invest the money in an index fund and leave it there to grow.