HYSA aren't investments. I use my HYSA to save money with growth at 0% risk and 100% liquid. for my taxes and emergency fund. Anything 2+% growth, let alone my 4.25%, makes 100% sense for savings.
I hope the HYSAs never leave. it gets america back to a cash based society. too much leverage. students on loans, home owners on mortgages, some even going as low as 1% down, and property owners (folks that rent out their properties going hyperleveraged. ugh any equity built is cashed out to own even more properties so that a tennant not paying means the mortgage doesn't get paid) lets not mention our own government is hundreds of trillions of dollars are in deficits. if we cant get to a gold standard, and the banks retain an even lower reserve rate, at least incentive citizens to have their own cash and equity. how many surveys have shown few americans have a $1000 emergency fund?? HYSA puts the burden of cash on common folks, not just the money conscious and money savvy folks. if anything the banks should increase the minimums of cash held to get the same perks of 4% otherwise the $500 and lower should get 2.5 or less returns. Make citizens incentivized to save.
First concept to learn with banks…. They use your money to make money. Which means you could do the same to make more. Just keep an emergency savings in a bank…. Anything above that figure is essentially a potential lost.
@m.r.itran.1234 not sure what you mean about money in a savings account is wasted. the power of a savings account is better to look at as a FIXED COST. if a problem arises you can pay yourself back in cash without losing even more money with interest. think of money as 3 types. face value cash, negative interest money, and positive interest money. 5 bucks from your checking account is $5. $5 from your credit card is generally negative interest. (unless paid in full and a rewards card) $5 in savings is generally zero-ish interest. (0.01% is essentially 0% but it does keep you from paying negative interest) but if used in higher interest modes say a HYSA then thats positive interest.
@@ericolens3I think it’s in reference to inflation, which just erodes any money you have in a savings account, unless your HYSA pays more in interest than the inflation rate.
Historically, it has been seen 1. When yeild curve invert and short term bond give more return than long term bond and when it re-inverts you shall become cautious of equity market. 2. Whenever FED cuts rates and bring down to ease the market, the market respond positively and hit new high in couple of months. attaracting lot of money from retail investors. 3. But the FED cut does not eventually help the crisis, but the short term market rally gives big shark institutional investors a easy exit and eventually the equity market slips into recession in next couple of months mostly on some trigger coinciding with oil price rise mostly. 4. Safe strategy will be, when FED cut rate be very cautious. Take advantage of equity market rally for 2-3 weeks and exit. People underestimate the impotance of holding cash during recession. 5. Wait for the market to crash with liquid cash in hand. Start bottom fishing when market is down at 50% and keep averaging down. Wait for 3-4 years money will change hands and you will be the next millionaire in the town. When everybody is panicked, buy the panic.
I have followed your three ETF portfolio with 33% VOO, 33% VUG, 33% SCHD in addition to a separate account with 100% SWVXX as my “emergency” fund (earns around 5.14%). SWVXX will cover five years of living expenses. I do not plan on making any changes. Not flexing but my returns have never been better. I’m 75 years old with investable assets in the low eight digits.
Only if there’s no any sudden issues in the economy. Which it’s very difficult because the whole world is struggling with China and Europe. We are too interconnected. I think first cut of 0.25 and then many others faster because it’s hitting the fan…
My experience with HYSAs is they have a great rate for 2-3 months and then start dropping it in increments until it is well below what they advertise on new accounts. So I have to move to another account somewhere else if I want that 5.xx% rate. Luckily it is not hard to do with online accounts these days, just annoying. That being said, if your rate starts to drop (they send you emails to notify you) don't be afraid to move to somewhere else with a better rate. They are betting that you won't (like cable companies or cell phone carriers).
Just go with Marcus, Ally or other big name players that don’t use teaser rates and then drop you. You might make .3-.5% less but you’ll have consistent rates
I don’t expect to see interest rates go as low as many think they will, just because they were at historical lows previously. We are actually close to the historical average. Any rate cuts will be few unless the economy really tanks.
Hi Prof. G! I know you love SCHD. A year ago, I chose SCHD for the majority of my S & S funds and I put a small sum also into VYM as I know it was also a top pick for you. VYM has performed so much better I think because it has Broadcom in it. How do you feel currently about VYM? I am chunking in another $20k ish over the remainder of this year in this category and part of me wants to go VYM instead. Would love a new video on S&S favorite options. I know you just did one re promoting SCHD but is it that strong a number 1 pick over VYM?
Your choice. Do you think you can beat your 401k YoY returns? If so, the choice seems obvious to me. Personally, I invest 10% in 401k, ~20% into investments of my choosing. This is not financial advice.
I like it! I definitely missed out on some gains this year by parking too much in the HYSA.... (I like your book choices on the left side of the screen!!!)
look at HYSA as a whole picture. theyre like bonds to me in the sense theyre stabilized. (although technically bonds can lose value) all in all Stocks, bonds, HYSA when looked at as a whole, can be a BALANCE and blend. HYSA has less risk, well frankly no risk, but less potential for a return than a stock. to me, as an non Financial Advisor, I invest 100% stocks and also have an HYSA. should the post virus market begin to slow down I'll get a bit more conservative but for now... its 100% aggressive. Im not financially savvy so dont quote me as some guru. my ONLY wisedom is looking for positive interest for my money and minimizing negative interest. so dave ramsey in some regards. (just not the rice and beans)
Professor G, what platform do you use to manage investments? I was a Vanguard customer but they charge a 1% fee on any non-Vanguard funds you keep on their platform. QQQM is an Invesco fund and SCHD is a Schwab fund. Where can you keep all these different funds without incurring extra fees? Also, are you concerned about the petro dollar going away and the international dedollarization due to our debt and global realignment?
Comparing HYSA to QQQM just confuses people. QQQM has tons more risk and volatility and should only be held as an aspect of a long term portfolio. HYSA is a great parking spot for cash/emergency fund/etc. So start the conversation about risk and time horizons instead of telling people they should compare the rate of a cherry picked year for QQQM. It rarely returns 55%.
Have a deferred spending HYSA for the purchase of a future car that I’m contributing to monthly. With the likelihood of rates dropping before I use these funds in the next 5-7 years, I had the idea to create a 50/50 portfolio of a dividend ETF (I.e. SCHD) and bonds (mix of short/medium term, int, TIPS, corp). Curious on thoughts about this?
CD ladders at 5.25 to 5.5% over the next 2 years. As they mature, I reinvest to a longer term. Always have access to some cash within 30 days and no risk of principle loss. Btw, HYSA rate won’t drop drastically. They move by 0.25% increments, and that won’t happen for a while.
Still have my next years cash in my Fidelity Money Market. For 1 - 3 year money, setting up cd ladders. Getting some 5.40% call protected for a year, and still some 2 - 3 year at 4 - 5% which are call protected. Getting harder to find longer term CP however.
if you move from HYSA (or Money Market account for that matter) into SCHD would you not be exposed to capital losses in SCHD once the economic desaceleration lowers the SCHD portafolio earnings expectations?... I understand the logic of shifting interest to dividends but you are getting a higher risk in the short term, isnt it? ...
Do you have any videos on exit strategies to protect against deep dips in the stock/etf price? I just rebalanced to your 3 ETF strategy and thinking a trailing stop loss % might be a good idea in the IRA where I don't really have to worry about paying gains until withdrawal. I wondered your simplified thoughts on the subject.
It is not an either putting your money in a high yield savings account or in stock market investments. People should do both. I do. It also depends on your situation, your age, going to buy a big ticket item, etc.
exactamundo. stocks are better longer term. HYSA is better for any term but generally left alone but ACCESSIBLE. stocks generally growth better with time too, also less Cap Gains tax rates when held for a year. an HYSA can be used for mid length goals, like saving for a car. just think, 5% growth on your savings rather than PAYING INTEREST on a car. also theyre great for Emergency funds also great for a counter balance so you could more aggressively invest. why use bonds when HYSA could be your risk balancer. (not a financial advisor, just my laymans take on things)
How would feel about putting money into a monthly covered call ETF to replace the yield? I’m currently using JEPQ and it’s paying out and holding value. Thoughts?
May be before jumping directly from HYSA to equity ETFs , even dividend focused ones, you can also take a look at some fixed income instruments like treasuries, quality bonds and bond ETFs , also annuity if you are close to retirement or already in retirement.
@NolanGouveia Thanks professor. I have it in my roth about 1400 share. My Fidelity brokerage account is were I keep my savings/investments but I was letting it sit making 4.9% spaxx cause I was scared to loose my life savings. I do have 6-8 month emergency fund in another account .
Professor G. For me it’s hard to balance how much we need for emergencies! I’m pessimistic and seen emergencies happen all time with house. From roof leaks / furnace going / pipes bursting etc I feel like you need $20-$30k in emergency and not 6 months (say $10k for me). I’m debt free after paying house off at 31 years old! I’m having a hard time balancing my retirement with my today money and enjoying life. I keep putting a ton to retirement and sometimes ask myself why! I wish I could enjoy more money today.
In my opinion, those aren't "emergencies." Those things should be saved for and factored for as part of home ownership. Those are wear items with predictable life expectancies. Years ago, I did a series of emergency preparedness videos about emergency funds, and qualified emergences as: evacuation, extended job loss or loss of income, and serious health issues. But start by defining what are true emergencies versus fully anticipated wear item replacement or maintenance, and go from there.
As an avid investor, I often mull over how accomplished investors are able to amass fortunes through their investment endeavors. Presently, I hold equity exceeding $545K from a recent home sale, yet I'm uncertain about my next investment move. Should I consider buying stocks at this time, or should I await another opportunity?
I searched for her complete name on the internet and located her page. I then sent an email and scheduled a meeting to converse with her; now, I'm awaiting her response.
It is really refreshing to see a comment about Evelyn Infurna’s .I have worked with her also ; her approach consistently keeps you ahead of the trend, She's a guru i'll say
Hi Professor! I have a big chunk of money in CIT Bank; I am only five years from retirement... don't banks have to notify customers if they lower the amount they originally offered?
If it is HYSA, they can change anytime and in general when rates fall drastically, they will also reduce much faster. If you want to lock your rates, think of any longer tenure CDs , treasuries (medium term like 7 to 10 years) , low fee and guaranteed annuities (look for good ones, not the ones with loads of fee) , also bond ETFs and bond funds, if you are close to retirement.
I'm using my HYSA just for my emergency fund, not really as an investment ❤❤ I have Capital One, I know the pimps won't keep giving us money. The drops will come.
I personally, will follow the advice of having a HYSA, I been to blind to the stock market, CD accounts, HSA accounts and Roth IRA accounts. I have forgot that you need to have money accesible for any situation you may encounter in your path.
Maxing my Roth IRA and getting my match in my Roth 401k. The rest goes into a savings account. Either that money turns into a down payment for property, or equities crash and I buy those. The interest rate just makes waiting more comfortable.
@@NolanGouveiaProf, i have a question, im 40, i want 33% VOO, QQQM and SCHD, but for SCHD im not sure because of the taxes, im in Colombia and after the 30% of tax iin the US for the dividens i have to pay here also taxes, do you think is a good idea SCHD in this case?
Im getting a 34% rate of return in the stock market overall. 10% in the S&P 500. I have $7,000 sitting in a savings earning 2.00% and $5,000 in a CD, earning 4.50%. I think I might move a chunk of it over to the brokerage account. The brokerage Money Market earns 5.00% APY anyway. If you invested $10,000 in the stock market in 2014, you would have like $33,000 today, you cant get that rate of return in a savings account, sure it is safe, but the growth is VERY SLOW.
Yeah it's a savings account not an inventory account like you eventually mention. I only keep my money that I'm saving for the short term. I keep my emergency fund, annual sinking funds, etc. in a hysa. Anything else outside those categories goes to brokerage accounts.
Better to buy monthly t bills from the government if rates are better or the same. No local taxes on t bill profits as opposed to savings account interest
@@brianog5267 they are better returns than any high yield savings, money market or CD if you live in a state with income taxes which is most without the risk of a market crash which is very possible in today's climate.
So far in my personal life experience I am NOT seeing prices coming down on the things I buy. I have actually seen a rise in some of the food items I buy. But I do agree about getting money out of high yield accounts and into the high yield etfs. I have the SCHD. Really hoping it's going to finally take off like most everything else in the market :).
@@NolanGouveia Yes-In regular acct I have VOO, MGK, and QQQM, (SPLG in regular IRA when heard from you about low expense ratio) :) SCHD in my ROTH and regular IRA
Since these are short duration, and if the Fed starts cutting rates these will also be affected. Take a look at JAAA currently 6%. These are triple A CLO’s without a default,( Collateral Loan Obligations ) and not to be confused with (CDO’s) Collateral Debt Obligations from the “Big Short” fame during the financial crisis.
Based on your first video on this topic like a year ago I shifted my emergency fund fund from a normal bank account @ 0.05% to Capital One @ 4.25%. I had never really even thought about it. I appreciate your videos and your expertise.
Hey Professor G, what do you think about having a decent amount of money saved (like $150k) in HYSA for a future home purchase within the next 1-2 years vs having that money on VOO instead?
QQQ vs FTEC? I dislike HYSAs because of their variable APYs. It's a hassle to move boatloads of money around from one place to another. So I don't think I'll ever get into HYSAs, unless I find an institution offering a high yield that isn't subject to change.
@@Kayla11113 CDs are okay, but they don't offer liquidity and are taxed as interest income, not as capital gains. For example, if an investor is in the 24% tax bracket and has earned $50000 in CD interest for the year, then they owe $12000 in taxes. Just a rough example, but you get the point.
@@Constitution1789 No penalty CD's are perfect for an emergency fund. I have some in HYSA, some in no penalty CD's. Some in equities. Some in real estate.
@@Kayla11113 I didn't know about no penalty CDs. Kudos to your comment. The taxes, though, would effectively drop the APY from 5 percent to 3.8 percent for someone in the 24 percent tax bracket range and who receives $12,500 in interest from the $250,000 no-penalty CD? 3.8 percent...hmm...it is still better than a savings account.
hi Prof G! Another amazing video. I have a HYSA that would cover 10 months emergency expenses but I’m thinking about putting my money on CD’s too. What’s your thoughts on that? Appreciate you very much.
Can’t imagine all those rich boomers who have had their money just exponentially growing man. It’s ridiculous. Millennials ain’t gonna have nothing. I just learned about high yield accounts. I used to have a discover but it dropped so low
My wife and I have our emergency fund in a HYSA and it will stay there (hopefully untouched). Emergency funds aren’t investments, I just want it to grow enough that it doesn’t shrink in value due to inflation. Anyone who puts money in a HYSA, MMF, or Bond as an “investment” is way, way too conservative. Might as while put cash in a safe in your closet.
Yes the drop in interest rates will definitely come. Probably about 1-2 years away from it so can hold for now but start learning about different places to position your money like an ETF (VOO, schd, JEPq) or t-bills
This is an unethical claim and it needs to be noted that this guy is not a fiduciary. While the S&P is returning a 20%+, there is no FDIC insurance on this investment. High Yield savings accounts should be used for just that: savings.
I think hisa funds are a great place to save for short term purchases that you know you you will use and need. I think it is good place to invest if you are are older and don't need to build your wealth. It depends on your individual situation.
I don't think this guy understands the point of a HYSA. Nobody uses them as an investment, they are for emergency funds or saving for something you dont want market volatility to affect.
My take on 3 fund portfolio Schg Adx Jepq Once you reach a point you can stop reinvesting dividends to grow it, you can simply just live off dividends. As this can and should keep growing. Schg growth Adx as s&p500 but good quarterly dividends specially the last one of the year Jepq as dividend/income
HYSA aren't investments.
I use my HYSA to save money with growth at 0% risk and 100% liquid. for my taxes and emergency fund.
Anything 2+% growth, let alone my 4.25%, makes 100% sense for savings.
Definitely for savings yes!
SPAXX is my only account I need in Fidelity
I hope the HYSAs never leave.
it gets america back to a cash based society.
too much leverage.
students on loans, home owners on mortgages, some even going as low as 1% down, and property owners (folks that rent out their properties going hyperleveraged. ugh any equity built is cashed out to own even more properties so that a tennant not paying means the mortgage doesn't get paid)
lets not mention our own government is hundreds of trillions of dollars are in deficits.
if we cant get to a gold standard, and the banks retain an even lower reserve rate, at least incentive citizens to have their own cash and equity.
how many surveys have shown few americans have a $1000 emergency fund??
HYSA puts the burden of cash on common folks, not just the money conscious and money savvy folks.
if anything the banks should increase the minimums of cash held to get the same perks of 4% otherwise the $500 and lower should get 2.5 or less returns.
Make citizens incentivized to save.
First concept to learn with banks…. They use your money to make money. Which means you could do the same to make more. Just keep an emergency savings in a bank…. Anything above that figure is essentially a potential lost.
Thank you very much . that is the lesson I learned the hard way, keeping a penny in a saving account is just a wasted money
@m.r.itran.1234
not sure what you mean about money in a savings account is wasted.
the power of a savings account is better to look at as a FIXED COST.
if a problem arises you can pay yourself back in cash without losing even more money with interest.
think of money as 3 types.
face value cash, negative interest money, and positive interest money.
5 bucks from your checking account is $5.
$5 from your credit card is generally negative interest. (unless paid in full and a rewards card)
$5 in savings is generally zero-ish interest. (0.01% is essentially 0% but it does keep you from paying negative interest)
but if used in higher interest modes say a HYSA then thats positive interest.
@@ericolens3I think it’s in reference to inflation, which just erodes any money you have in a savings account, unless your HYSA pays more in interest than the inflation rate.
Historically, it has been seen
1. When yeild curve invert and short term bond give more return than long term bond and when it re-inverts you shall become cautious of equity market.
2. Whenever FED cuts rates and bring down to ease the market, the market respond positively and hit new high in couple of months. attaracting lot of money from retail investors.
3. But the FED cut does not eventually help the crisis, but the short term market rally gives big shark institutional investors a easy exit and eventually the equity market slips into recession in next couple of months mostly on some trigger coinciding with oil price rise mostly.
4. Safe strategy will be, when FED cut rate be very cautious. Take advantage of equity market rally for 2-3 weeks and exit. People underestimate the impotance of holding cash during recession.
5. Wait for the market to crash with liquid cash in hand. Start bottom fishing when market is down at 50% and keep averaging down. Wait for 3-4 years money will change hands and you will be the next millionaire in the town. When everybody is panicked, buy the panic.
I have followed your three ETF portfolio with 33% VOO, 33% VUG, 33% SCHD in addition to a separate account with 100% SWVXX as my “emergency” fund (earns around 5.14%). SWVXX will cover five years of living expenses. I do not plan on making any changes. Not flexing but my returns have never been better. I’m 75 years old with investable assets in the low eight digits.
Amazing! Great job!
me too!
Saying "flexing" at 75 years old is a flex. Also, awesome returns. 🤑
@@kbrobi thanks
SWVXX is a money market fund and it moves eerily similar to a HYSA. if interest rates drop, the yield on a money market fund will drop as well.
these cuts are not coming soon....and it will not drop to 1%. by end of yr it will prob drop to 4%
Only if there’s no any sudden issues in the economy. Which it’s very difficult because the whole world is struggling with China and Europe. We are too interconnected. I think first cut of 0.25 and then many others faster because it’s hitting the fan…
he said over the next couple years..
Nothing good lasts for ever. This not a dooms day scenario! This is finance peeks and valleys.
Better than .01% at Bank of America Savings. Bruh I had my cash in there for so long before I learned about Hysa
My US Bank went from 4.4% to 1.98% with no notice at all a few weeks ago.
Moved everything to Schwab money markets at 5%.
55% but there’s a risk it will go down, then up and hopefully back up. HYS only goes up.
My experience with HYSAs is they have a great rate for 2-3 months and then start dropping it in increments until it is well below what they advertise on new accounts. So I have to move to another account somewhere else if I want that 5.xx% rate. Luckily it is not hard to do with online accounts these days, just annoying. That being said, if your rate starts to drop (they send you emails to notify you) don't be afraid to move to somewhere else with a better rate. They are betting that you won't (like cable companies or cell phone carriers).
Just go with Marcus, Ally or other big name players that don’t use teaser rates and then drop you. You might make .3-.5% less but you’ll have consistent rates
@@stevem437 Yea, ally doesn't have the highest but they don't play games with promotional crap, just steady reliable growth at a respectable rate
Thank you! Good to know! Use HYSA for my house insurance, property taxes, car insurance etc. I’ll keep it there
Great idea!
same here,
its only for basic savings and essential bills.
Not so much an emergency fund but a generic savings that I wanna just make a lump of cash.
I don’t expect to see interest rates go as low as many think they will, just because they were at historical lows previously. We are actually close to the historical average. Any rate cuts will be few unless the economy really tanks.
I can definitely see this point of view
I don’t think you should put your emergency fund in VOO 😂
I would agree! Where do you put yours?
@@NolanGouveiaI put mine into Game Stop! Trust me, it's perfectly safe.
@@NolanGouveia Spaxx in Fidelity
Frl. Had to click off the video after that one😭
@@NolanGouveia Ally
Up here in Canada 🇨🇦 I have my investing funds in a high yield etf with low fees and currently pays 5%
Can you name those ETF's please ? Thanks in advance.
Hi Prof. G! I know you love SCHD. A year ago, I chose SCHD for the majority of my S & S funds and I put a small sum also into VYM as I know it was also a top pick for you. VYM has performed so much better I think because it has Broadcom in it. How do you feel currently about VYM? I am chunking in another $20k ish over the remainder of this year in this category and part of me wants to go VYM instead. Would love a new video on S&S favorite options. I know you just did one re promoting SCHD but is it that strong a number 1 pick over VYM?
Can you be trapped if you can just take your money out at will? Without loss? Rates arent going down significantly for quite a while
I think the trap is having too much in there thinking it’s a long term win and not being more invested in the market itself.
Would it be better to invest 100.00 week after 10% match in 401k or take the 100.00 invest in an ETF s week?
Your choice. Do you think you can beat your 401k YoY returns? If so, the choice seems obvious to me. Personally, I invest 10% in 401k, ~20% into investments of my choosing. This is not financial advice.
thank you prof G for addressing older investors too.
I like it! I definitely missed out on some gains this year by parking too much in the HYSA.... (I like your book choices on the left side of the screen!!!)
It’s just good to have that balance! And Thankyou. Which books do you like best?
look at HYSA as a whole picture.
theyre like bonds to me in the sense theyre stabilized.
(although technically bonds can lose value)
all in all Stocks, bonds, HYSA when looked at as a whole, can be a BALANCE and blend.
HYSA has less risk, well frankly no risk, but less potential for a return than a stock.
to me, as an non Financial Advisor, I invest 100% stocks and also have an HYSA.
should the post virus market begin to slow down I'll get a bit more conservative but for now... its 100% aggressive.
Im not financially savvy so dont quote me as some guru. my ONLY wisedom is looking for positive interest for my money and minimizing negative interest.
so dave ramsey in some regards. (just not the rice and beans)
keep pumping out those financial information videos Professor G!!!!
Professor G, what platform do you use to manage investments? I was a Vanguard customer but they charge a 1% fee on any non-Vanguard funds you keep on their platform. QQQM is an Invesco fund and SCHD is a Schwab fund. Where can you keep all these different funds without incurring extra fees?
Also, are you concerned about the petro dollar going away and the international dedollarization due to our debt and global realignment?
I use Charles schwab but I really also like Fidelity
@@NolanGouveia Thank you.
@@NolanGouveiawhat about interactive brokers?
Comparing HYSA to QQQM just confuses people. QQQM has tons more risk and volatility and should only be held as an aspect of a long term portfolio. HYSA is a great parking spot for cash/emergency fund/etc. So start the conversation about risk and time horizons instead of telling people they should compare the rate of a cherry picked year for QQQM. It rarely returns 55%.
Agree. It’s not a good comparison.
A better topic would be, ‘Where to save (low risk), when HYSA rates drop’.
I would like to know 👆🏼that too.
Another amazing video Nolan. Great job at helping so many people learn more about investing. 😀👍
Thankyou so much!
@@NolanGouveia No Thank You!! 🤣
Have a deferred spending HYSA for the purchase of a future car that I’m contributing to monthly. With the likelihood of rates dropping before I use these funds in the next 5-7 years, I had the idea to create a 50/50 portfolio of a dividend ETF (I.e. SCHD) and bonds (mix of short/medium term, int, TIPS, corp). Curious on thoughts about this?
Where are you parking your cash these days? What are you investing in?
CD ladders at 5.25 to 5.5% over the next 2 years. As they mature, I reinvest to a longer term. Always have access to some cash within 30 days and no risk of principle loss. Btw, HYSA rate won’t drop drastically. They move by 0.25% increments, and that won’t happen for a while.
Still have my next years cash in my Fidelity Money Market. For 1 - 3 year money, setting up cd ladders. Getting some 5.40% call protected for a year, and still some 2 - 3 year at 4 - 5% which are call protected. Getting harder to find longer term CP however.
My cash reserves at ally
Emergency funds sits in M1 HYSA getting 5% but not sure how long the 5% will last.
HYSA at Ally
if you move from HYSA (or Money Market account for that matter) into SCHD would you not be exposed to capital losses in SCHD once the economic desaceleration lowers the SCHD portafolio earnings expectations?... I understand the logic of shifting interest to dividends but you are getting a higher risk in the short term, isnt it? ...
in your opinion better for longterm dividend is stock RJF or MS ? The same sector financials
Do you have any videos on exit strategies to protect against deep dips in the stock/etf price? I just rebalanced to your 3 ETF strategy and thinking a trailing stop loss % might be a good idea in the IRA where I don't really have to worry about paying gains until withdrawal. I wondered your simplified thoughts on the subject.
Not a bad idea for a video!
Prof G - where to put 401k monies for us Old Folks? Thanks!
Bonds
Most of it in SCHD, probably.
It is not an either putting your money in a high yield savings account or in stock market investments. People should do both. I do. It also depends on your situation, your age, going to buy a big ticket item, etc.
I’m with you!
exactamundo.
stocks are better longer term.
HYSA is better for any term but generally left alone but ACCESSIBLE.
stocks generally growth better with time too, also less Cap Gains tax rates when held for a year.
an HYSA can be used for mid length goals, like saving for a car.
just think, 5% growth on your savings rather than PAYING INTEREST on a car.
also theyre great for Emergency funds
also great for a counter balance so you could more aggressively invest. why use bonds when HYSA could be your risk balancer. (not a financial advisor, just my laymans take on things)
I’m loving FDVV up the most down the least.
Solid fund
Glad you mentioned it, my best performer since I started investing in it this year and I never see anyone talk about it
DGRW
How would feel about putting money into a monthly covered call ETF to replace the yield? I’m currently using JEPQ and it’s paying out and holding value. Thoughts?
Jury is still out on that one but so far it looks good
May be before jumping directly from HYSA to equity ETFs , even dividend focused ones, you can also take a look at some fixed income instruments like treasuries, quality bonds and bond ETFs , also annuity if you are close to retirement or already in retirement.
This is very true! You can definitely find a middle ground if you’d like
Professor would you put schd in your brokerage account. I dont need it for a while. I have it sitting in a high yield account.
I’d go Roth IRA first then brokerage but yes I have it in all my accounts
@NolanGouveia Thanks professor. I have it in my roth about 1400 share. My Fidelity brokerage account is were I keep my savings/investments but I was letting it sit making 4.9% spaxx cause I was scared to loose my life savings. I do have 6-8 month emergency fund in another account .
@@rockk973 good stuff!
Professor G. For me it’s hard to balance how much we need for emergencies! I’m pessimistic and seen emergencies happen all time with house. From roof leaks / furnace going / pipes bursting etc I feel like you need $20-$30k in emergency and not 6 months (say $10k for me). I’m debt free after paying house off at 31 years old! I’m having a hard time balancing my retirement with my today money and enjoying life. I keep putting a ton to retirement and sometimes ask myself why! I wish I could enjoy more money today.
In my opinion, those aren't "emergencies." Those things should be saved for and factored for as part of home ownership. Those are wear items with predictable life expectancies. Years ago, I did a series of emergency preparedness videos about emergency funds, and qualified emergences as: evacuation, extended job loss or loss of income, and serious health issues. But start by defining what are true emergencies versus fully anticipated wear item replacement or maintenance, and go from there.
@@hot2warm shit happens all the time
As an avid investor, I often mull over how accomplished investors are able to amass fortunes through their investment endeavors. Presently, I hold equity exceeding $545K from a recent home sale, yet I'm uncertain about my next investment move. Should I consider buying stocks at this time, or should I await another opportunity?
Lately, I've been researching advisors, but the market updates I've encountered haven't been very positive. Who's your guide?
I searched for her complete name on the internet and located her page. I then sent an email and scheduled a meeting to converse with her; now, I'm awaiting her response.
It is really refreshing to see a comment about Evelyn Infurna’s .I have worked with her also ; her approach consistently keeps you ahead of the trend, She's a guru i'll say
Hi Professor! I have a big chunk of money in CIT Bank; I am only five years from retirement... don't banks have to notify customers if they lower the amount they originally offered?
If it is HYSA, they can change anytime and in general when rates fall drastically, they will also reduce much faster. If you want to lock your rates, think of any longer tenure CDs , treasuries (medium term like 7 to 10 years) , low fee and guaranteed annuities (look for good ones, not the ones with loads of fee) , also bond ETFs and bond funds, if you are close to retirement.
Ally and Capital One for emergency funds here.
I'm using my HYSA just for my emergency fund, not really as an investment ❤❤ I have Capital One, I know the pimps won't keep giving us money. The drops will come.
Capitol One = Pimps
😂😂😂
so true.
I personally, will follow the advice of having a HYSA, I been to blind to the stock market, CD accounts, HSA accounts and Roth IRA accounts. I have forgot that you need to have money accesible for any situation you may encounter in your path.
Very true!
I’m currently moving a portion of my hysa to max out my Roth and dollar cost average weekly. Is this a good move?
I like it!
Thanks Nolan!
Muni bond ETF for tax free interest !
On the Canadian side. XEI or VDY are safe and solid spots to park your emergency money
I’m not so sure the Fed is going to lower rates any time soon…
We will see
So what are your thoughts on VIO Bank?
Maxing my Roth IRA and getting my match in my Roth 401k. The rest goes into a savings account. Either that money turns into a down payment for property, or equities crash and I buy those. The interest rate just makes waiting more comfortable.
32, all my money is in individual stocks. Portfolio gains doing well. Just wish I could afford more contributions.
Thanks for the video!
You’re welcome! Thanks for watching
@@NolanGouveiaProf, i have a question, im 40, i want 33% VOO, QQQM and SCHD, but for SCHD im not sure because of the taxes, im in Colombia and after the 30% of tax iin the US for the dividens i have to pay here also taxes, do you think is a good idea SCHD in this case?
Thanks for the never ending info!!
You’re welcome!
Im getting a 34% rate of return in the stock market overall. 10% in the S&P 500.
I have $7,000 sitting in a savings earning 2.00% and $5,000 in a CD, earning 4.50%. I think I might move a chunk of it over to the brokerage account. The brokerage Money Market earns 5.00% APY anyway.
If you invested $10,000 in the stock market in 2014, you would have like $33,000 today, you cant get that rate of return in a savings account, sure it is safe, but the growth is VERY SLOW.
Don’t count on it… The experts said there probably will be 5 to 7 this year. More like 1 or 2…
When did Eric Forman start giving financial advice?
😳
3 month tbill etf pays monthly
I’m fine with keeping cash in my account so long as I’m earning interest.
Yeah it's a savings account not an inventory account like you eventually mention. I only keep my money that I'm saving for the short term. I keep my emergency fund, annual sinking funds, etc. in a hysa. Anything else outside those categories goes to brokerage accounts.
Better to buy monthly t bills from the government if rates are better or the same. No local taxes on t bill profits as opposed to savings account interest
100% in T Bills at the moment.
The US government??😂😂😂you’re funny
@@brianog5267 they are better returns than any high yield savings, money market or CD if you live in a state with income taxes which is most without the risk of a market crash which is very possible in today's climate.
So far in my personal life experience I am NOT seeing prices coming down on the things I buy. I have actually seen a rise in some of the food items I buy. But I do agree about getting money out of high yield accounts and into the high yield etfs. I have the SCHD. Really hoping it's going to finally take off like most everything else in the market :).
I’m with you! Do you invest in any other funds?
@@NolanGouveia Yes-In regular acct I have VOO, MGK, and QQQM, (SPLG in regular IRA when heard from you about low expense ratio) :) SCHD in my ROTH and regular IRA
@@jeanniedanford you are in some solid funds nice job!
Will 1-3 month bond ETFs like BIL & SGOV also cut their 5% yield?
Since these are short duration, and if the Fed starts cutting rates these will also be affected. Take a look at JAAA currently 6%. These are triple A CLO’s without a default,( Collateral Loan Obligations ) and not to be confused with (CDO’s) Collateral Debt Obligations from the “Big Short” fame during the financial crisis.
Incredible prof. G!! Thanks as alwys for the viedos.
Based on your first video on this topic like a year ago I shifted my emergency fund fund from a normal bank account @ 0.05% to Capital One @ 4.25%. I had never really even thought about it. I appreciate your videos and your expertise.
Hey Professor G, what do you think about having a decent amount of money saved (like $150k) in HYSA for a future home purchase within the next 1-2 years vs having that money on VOO instead?
Professor G! You should consider making a fitness channel as well.
A decent name for it would be FitnessG or Fitness simplified
Not a bad idea!
Is it smart to hold QQQM in both my brokerage acc and ROTH IRA? I've maxed out my ROTH so I cant invest anymore in QQQM until next year.
You definitely can! I do in my retirement accounts and brokerage accounts as well
Vio bank 5.30
I love that the article that you used that says "RIP high-yield savings accounts" is 4 years old... it's literally from June 12th, 2020.
To show that the lowered rates before and then what happened..
Will CD % also drop??
Yes but over time
As ususl, G, video is right on the money.
I think the 30 year mortgage rate will go to 5% maybe 4% but not any lower or inflation will blow up even more again.
Darn it. It's just for my emergency fund so oh well.
My opinion to be putting your money in Schd, qqqm voo now, is not bright. The market is going to drop like a rock. WAIT
Tough to accurately time the market
Dollar Cost Average as you should have been doing your entire career.
💯 remember money market and high yield savings being
Ya definitely
Redo your returns starting Jan 2022 instead of Jan 2023. Cherry picking dates is disingenuous
Agree 100%, Wrong numbers for S&P 500 return
Professor G , please count me in as one of your students 🙂
🙌🙌
can you make a video about nvidia thanks
QQQ vs FTEC? I dislike HYSAs because of their variable APYs. It's a hassle to move boatloads of money around from one place to another. So I don't think I'll ever get into HYSAs, unless I find an institution offering a high yield that isn't subject to change.
QQQM/XLK 50/50
CDs
@@Kayla11113 CDs are okay, but they don't offer liquidity and are taxed as interest income, not as capital gains. For example, if an investor is in the 24% tax bracket and has earned $50000 in CD interest for the year, then they owe $12000 in taxes. Just a rough example, but you get the point.
@@Constitution1789 No penalty CD's are perfect for an emergency fund. I have some in HYSA, some in no penalty CD's. Some in equities. Some in real estate.
@@Kayla11113 I didn't know about no penalty CDs. Kudos to your comment. The taxes, though, would effectively drop the APY from 5 percent to 3.8 percent for someone in the 24 percent tax bracket range and who receives $12,500 in interest from the $250,000 no-penalty CD? 3.8 percent...hmm...it is still better than a savings account.
hi Prof G! Another amazing video. I have a HYSA that would cover 10 months emergency expenses but I’m thinking about putting my money on CD’s too. What’s your thoughts on that? Appreciate you very much.
Think w/draw early penalty..
I’m going to be doing a CD ladder soon.
TLT!
You are clearly not listening to the Fed or the bond market.
🤔🤔
Key takeaway at @6:40 "rather than the S&P 500 because the possibility of it dropping is definitely a thing"
Booooo. We love a good 4/5% return on an emergency fund!
Yes we do! But a 8-10% appreciation + a 3.5% dividend yield is even better 😜
@@NolanGouveia ...But a 8-10% appreciation + a 3.5% dividend yield is even better, BUT NOT GARANTEED!!!
@@andreyshulgin5984 true! Neither is the rate staying up on the HYSA
With FJB at the helm??? HYSA all the way!
Can’t imagine all those rich boomers who have had their money just exponentially growing man. It’s ridiculous. Millennials ain’t gonna have nothing. I just learned about high yield accounts. I used to have a discover but it dropped so low
Wealth is going to be passed down through those generations & at some point Gen Z and Millennials as a whole will have big money
@@jordanbatka033 not my family that’s for sure. But you right
Ivy Bank
I'm retired and drawing from my investments - so I keep 3 years of expenses in Fidelity's SPAXX account.
My wife and I have our emergency fund in a HYSA and it will stay there (hopefully untouched). Emergency funds aren’t investments, I just want it to grow enough that it doesn’t shrink in value due to inflation.
Anyone who puts money in a HYSA, MMF, or Bond as an “investment” is way, way too conservative. Might as while put cash in a safe in your closet.
Good call yes agree!
Yes the drop in interest rates will definitely come. Probably about 1-2 years away from it so can hold for now but start learning about different places to position your money like an ETF (VOO, schd, JEPq) or t-bills
So lock in ya savings to a cd
That’s a good option if you don’t need the $$ yes!
This is an unethical claim and it needs to be noted that this guy is not a fiduciary. While the S&P is returning a 20%+, there is no FDIC insurance on this investment. High Yield savings accounts should be used for just that: savings.
Unethical? Looks like you didn’t even watch the video bud. And I note in every video that I am not a financial advisor.
I think I missed the TRAP part
Our economy and the world economy are very volatile and getting worse. The reckless spending and high oil prices is driving up inflation.
I think hisa funds are a great place to save for short term purchases that you know you you will use and need. I think it is good place to invest if you are are older and don't need to build your wealth. It depends on your individual situation.
There is 7% if you look in the right spot
Where?
Nonsense.
Which part.. lol
Yotta 😢
Sir, I dont think you know what the word trap means. Thumbs down
👎
SCHD > HYSA
Stop being brainwashed. These are LYSA period.
Terrible audio. Low
Turn it up :-) in all seriousness, I’m always open for constructive feedback if you have a suggestion of how to fix it.
My audio is fine. Maybe it’s your speaker?
QQQM>VUG
I don't think this guy understands the point of a HYSA. Nobody uses them as an investment, they are for emergency funds or saving for something you dont want market volatility to affect.
I said that in the video 🫣
SCHD - DGRO - QQQM - FXAIX - Sit back & Let your $$ grow
That's exactly what I have in mine, except QQQM is mixed in with some FTEC for my growth portfolio.
My take on 3 fund portfolio
Schg
Adx
Jepq
Once you reach a point you can stop reinvesting dividends to grow it, you can simply just live off dividends. As this can and should keep growing.
Schg growth
Adx as s&p500 but good quarterly dividends specially the last one of the year
Jepq as dividend/income
I love QQQM, I think I'm having an affair behind my other love VTI
amazing video thank you!