Is Keeping money in Savings account Wise ?

[Anonymous]

You can get 2% for your money without even doing anything risky. There are a few big stabel banks offering that. Discover was until recently when they dropped the rate. As someone suggested above, bankrateand/or deposit accounts website has a list.

I keep 6 months of expenses in 2% and everything else goes to work for me in our investments.

[Chestnut1]

Thank you all for the suggestions. 

I think i'm gonna go on CDs which will give me about 2% a year.

Also, I haven't started 401(k) at work yet. Do you think that would be wise (I know the answer mostly is yes) to start putting in money in there. That would account for Retirement plan. But to be honest, i would like to make money now and save the money and do things i want to while i have age on my side than investing in 401(k) which will be of no  greater use to me when i'm old (except to go around the world with my old wife) . 

What are you suggestions on that (401k) front ?

[Anonymous]

Considering you have a decent chunk, I'd play the new account SUB game. Where tnhey pay you to open chacking and/or saving for $200-$400 by keeping cartain amount. Then when you get the Money, do it again somwhere else. By only doing this a few times a year, it's more than the interest alone on the Money. New checking at Chase will get you $200 with direct deposit, and Savings will get you $150 more by keeping $10K for 90 days. WF is similar for $400. ETC.

Right now it seems most HYS rates have lowered from where they were this summer, so CD might be a better investment. I've seen some as high as 3%, higher the amout and longer the term get better rates.

[iced]

---

@Chestnut1 wrote:

Thank you all for the suggestions. 

I think i'm gonna go on CDs which will give me about 2% a year.

Also, I haven't started 401(k) at work yet. Do you think that would be wise (I know the answer mostly is yes) to start putting in money in there. That would account for Retirement plan. But to be honest, i would like to make money now and save the money and do things i want to while i have age on my side than investing in 401(k) which will be of no  greater use to me when i'm old (except to go around the world with my old wife) . 

What are you suggestions on that (401k) front ?

---

You should be trying to max out any tax-advantaged savings plan (like a 401k) as soon as you humanly can. The whole "I want to use my money while I'm young" line is a distraction that people who cannot or don't care about the future use to justify their irresponsiblity.

The best answer is to both max out tax advantaged plans AND put some after-tax aside into investments for things you may need before you're 60. My SO and I have around 30% of our total savings in tax-advantaged plans that we won't touch until we're 70 (or 66 in the case of HSA and we go on Medicare), with the rest available for a home purchase or rainy day.

The more we do this, though, the less we even want to touch that after-tax money, because why spend it when it's generaing passive income while growing and adding to our assets for when we do get old. People who can't afford to buy a $100,000 car with cash dream about being able to do it, but then when you realize you can, you lose interest in actually doing it because then you think about buying that $1 million home with cash instead... then $5 million, and so on. If you get into that mentality, you'll find you will have no regrets about also parking a money in something like a 401k because you're still living reasonably comfortably with your day-to-day cash (and passive income from investments!), so that mental fear you'll be too old to ever spend your savings just ... melts ... away.

[Chestnut1]

I agree to what you say. Thanks for knocking some sense into me. I'm about to Start my 401(k) by maxing out to help save as much possible. Thanks againfor the Advice. 

[Anonymous]

I wouldn't leave that money in a savings account when you can put it to work for you. Personally I leave 5-10k in a savings account that's ready to utilize at a moments notice. Invested monies in a brokerage account can be liquidated and converted to cash within like 1-3 days so I wouldn't worry too much about it. 

Conversative investments like mutual funds and utility stocks are fairly safe. The market fluxuates up and down, especially end of the year and even more so on election years. But overall, over years it should trend upward. So don't get too caught up on day-to-day movements too much. Hour to hour and Day to day movements are for day traders.

If the market totally collapses and we all lose our money then we are all screwed regardless if we have invested money or not.

[Anonymous]

Personally I like hand picking my own companies to invest in. But if that's not your thing then mutual funds, ETFs and the like are great ways to grow your wealth over time. If you spend enough time reading and educating yourself you can beat the average growth market (S&P NASDAQ, etc).

I have a position in my brokerage that returns 30% per year and the quarterly dividend payouts are reinvested. It's been a good player for me and hopefully as the years go on it continues to perform as it is now. If I decided that I needed that money for any reason I could sell those shares and transfer it back to my checking account and have it in about 3 days or so. That's a lot better than a savings account.

The other thing there is that I check it every day. So for me there is a large time investment. Read revelent news articles, etc and hopefully if there are critical news events (catalysts) that might jeapordize my money, I can hopefully sell and save myself from too much loss. But it's not guaranteed, there's risk, of course.

[Dalmus]

---

@Chestnut1 wrote:

I agree to what you say. Thanks for knocking some sense into me. I'm about to Start my 401(k) by maxing out to help save as much possible. Thanks againfor the Advice. 

---

Your company may offer a Roth 401(k).  It may be worth looking into.  Your expected income and tax situation at retirement should influence where you put most of your retirement savings now.  That's hard for most people to figure out...  As was mentioned earlier, a fiduciary advisor would be of great benefit to you.  IRAs, 401(k)s and their Roth siblings along with simple savings and investments all have a place in a well-thought financial plan.

[Anonymous]

Yeah 3% return is way too conservative for me too. You can get better than that investing in utility stocks and reinvesting your dividend payouts.

American Water Works

Waste Management

Public Service Enterprise Group

American Power and Electric

NextEra Energy Inc

Are just a few utilities that should safely earn you better than 3% easily. Waste Mangement has lately been returning like 40%. You know these stock will continue to trend upward because the population of the country will continue to grow as people reproduce and they will have to use utilities. You wont find to many people crazy enough to take cold showers, unless you are me and living on the road and have no other choice.

Other companies with a little more risk can return even better gains. Microsoft has been consistently returning 30% a year for a while now and pays a decent dividend to boot. You know Microsoft is going to hang in there for a while because have a monopoly on computer operationg systems, pretty much. Linux operating systems are open source and not a contender and Apple is doing its thing but has been limited mostly to cellular devices, they can't really compete with Windows on desktops.

The take away is to use what you know, target companies in industries you understand and work in professionally for the best chance and making good returns on investments. I earned 100% return once, it was very high risk, but I undestood what I was looking at and invested in Mongodb when it was going for like $60. I still have those shares not sure if I want to sell yet or not. They are loitering for the last year and havent really gone up or down.

[randomguy1]

^^ Could also look into relatively safer ETFs. QQQ Vanguard ETFs Or other stocks like BRKB etc. You will need to understand Capital Gains tax as well. I really think you need to talk to a professional and do some reading if you really are willing to put serious skin in the game though.