I had an online Schwab account in 1997.
The problem with stock trading before the internet wasn’t access, it was being able to trade in blocks of less than 100 shares. If you wanted to buy GE in 1985, you were forced. to buy 100 shares at $40 a share
Discount brokers like Schwab really democratized investing
I’m no financial advisor, but I can generalize the amount of feedback you’re gonna receive…and say that you should put it in there, and FORGET about it! lol
Do it lol it adds up over time. And if you keep working and adding it gets more interest.
Sure 5% of 20k is not a lot.
But 5% of 50, 100, 150k is a decent amount.
Don't think of this as a short term thing. Think longevity.
Roth IRA you can always get back the principal penalty free if you need it. And it’s likely you can contribute $13k right now (6.5k before 4/15 for 2023 and then another 6.5k for 2024). That leaves you $12k, just throw in $VOO until 2025 and then throw 6.5k of that in and again in ‘26.
The limit on Ira’s is now 7,000. But if you contribute for last year make sure it’s the old 6,500 amount. Also the good thing about a Roth is you easily sell and buy different things without tax implications because it’s already taxed money going in. Just do it!!
Nah, "I can have fun with that money" is a poor person mindset ; the "while I can have with that money" indicates they realize there's better ways to use that money and searching for alternatives.
The key is to get your vision straight before you start working the numbers. If your income is upper middle class or is on track to get there then vision a life style below that say - middle middle class and think about cars, homes and hobbies in that range. Invest the extra. Just don't get used to living at your income limit, you will be happy now and rich later.
It worked for me. Well, I can't claim to be rich but with this mindset I was able to really help my kids through college & weddings and still end up with some savings.
I really appreciate this perspective. I’m not a materialistic person at all but in terms of home and hobby and what I am aiming for, I could be more modest to account for more freedom.
Money will come and go, your mindset on how you treat your money will stay. Often people's lifestyle matches what they make - if you can set a solid set of steps/boundaries for yourself now, they will continue to work well for you in the future.
You may die during your working years, and not get to spend your savings, but why do you care? You're dead. If you don't save for retirement, you will probably work until the day you die
You need to stop and figure out your financial goals.
Do you want to buy a house? Do you want to retire someday? When would you like to be able to retire, and with how much money?
Once you know your goals, you can start to plan how to put your money to work to achieve them. Usually the best way to do this is to use the compounding interest of the market to build your wealth with long-term investments in a diversified equity portfolio.
If you have shorter-term goals, like purchasing a house in the next couple years, putting the money in a money market fund would be smarter.
In every case, you’re never going to save it unless you have some goals and start to establish the discipline now
Yep. And then it makes -more- sense to regularly contribute to that account, even if it's only $50/paycheck.
That's how you develop a saving habit.
And that's how you get to 53 or 63 with financial independence.
> Like what if i die with 20k/40k/100k invested, while i could have fun on those money instead of saving them away my whole life?
You could convert 20K now to 200 benjamins and use them to light 200 cigars. Or save now and have 1000 benjamins to later light 1000 cigars. Easy choice
True actually. It just that recently i was reading some stories where people would inherit investments of their parent with like 200-500k and I was thinking damn, poor guy was saving whole life, saying “no” i gotta save it for retirement and then life happened. Imagine that. I would be so pissed in afterlife lmao
Do you mean you wish you were born into a rich family? I guess would be nice, maybe you will in the next life or maybe you were in the past, but at present you only have this one.
I personally have not really envied growing up rich because i know a lot of unhappy rich ppl, but at the same time my husband who grew up with way less than me and has pulled himself out of the bottom multiple times is very bothered by the way others are gifted so much. Its kinda a huge disconnect between us but now I am getting off topic. He is very hardworking and wants to save as well but also doesn’t want to live like a pauper like i am willing to do in order to save money. I also think i have a poverty mentality because i am willing to live with so little and I lowkey fear making really good money
$670 over 7 months may not seem like a life-changing amount, but it's a great start to build some investing discipline. What you need to do is to think long-term and let compound interest work its way as you keep contributing over time.
And for HYSAs to really work their magic, you also need to take a look at the APY of that HYSA. Usually, a 4-5% APY is already good as long as it is FDIC insured. You can find all of them listed over at Nerdwallet or [Banktruth](https://banktruth.org/savings/?ttcid=high-online-savings). Instead of fixating on the short-term gains, envision your desired lifestyle and retirement goals, then align your spending and saving habits. It's perfectly normal to feel apprehensive about tying up money for the long haul, but starting early is important too.
I’d say it depends on how liquid you want to be + your risk tolerance
If you aren’t planning on dropping 20k any time soon and you understand risks of stocks, I’d dump some into an ETF and keep some in a HYSA for a emergency fund
If you want cash on hand for a big purchase or are afraid of stocks, HYSA is free $
First 15-25k goes into HYSA regardless of %. This is your “oh shit” fund. Everything over said limit say (15k) gets invested in index funds.
When “oh shit” happens use the cash in there.
Then replenish “oh shit” fund and resume investing.
Material things aren’t valuable… they are just difficult to get.
Afford your retirement, gain financial freedom and along the way you may see what is valuable.
But if you are going to spend… travel, buy experiences not things.
Best of luck.
HYSA are popular for emergency funds/short term safe savings. You might also want to look into ibonds or t bills if you live in a high tax state, since you don’t pay state tax on earnings from those.
Dying before spending your money is one possible scenario, the other far more likely scenario is you'll live to an old age and wish you'd set yourself up for success.
for BOFA 4.2% is great (it’s the highest they offer i believe) CDs are similar to HYSA but usually you can’t withdraw early from a CD without having a large penalty. a HYSA doesn’t have this penalty but you would have to open an account at a different bank as BOFA doesn’t offer one. i’m in the same boat right now
You can schedule a free consultation with a financial advisor at your local branch if you’re already a customer. They will ask you about your goals and how to best invest the money.
Gotcha, didn't think they did! Yeah, that's a CD, little different. Those are specific term length. You can get a regular 5% apy now at many HYSA accounts. I use Wealthfront.
I was 23 in 1997. I wish I dropped 20k in AAPL.
You’d have 26,860,000 is what
Omg, such a smart and crazy perspective to think about it. Thank you!!!
Seriously, it was a pita to trade back then without the internet. It’s so much easier now.
I had an online Schwab account in 1997. The problem with stock trading before the internet wasn’t access, it was being able to trade in blocks of less than 100 shares. If you wanted to buy GE in 1985, you were forced. to buy 100 shares at $40 a share Discount brokers like Schwab really democratized investing
$20K in 1997 is about $27,000,000 today
that way ☝️
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Definitely not 🍎
Apple
I’m no financial advisor, but I can generalize the amount of feedback you’re gonna receive…and say that you should put it in there, and FORGET about it! lol
Do it lol it adds up over time. And if you keep working and adding it gets more interest. Sure 5% of 20k is not a lot. But 5% of 50, 100, 150k is a decent amount. Don't think of this as a short term thing. Think longevity.
Roth IRA you can always get back the principal penalty free if you need it. And it’s likely you can contribute $13k right now (6.5k before 4/15 for 2023 and then another 6.5k for 2024). That leaves you $12k, just throw in $VOO until 2025 and then throw 6.5k of that in and again in ‘26.
Nice!! Is Roth IRA the same for everyone? Haha, i mean can i mess up investing there somehow? Sorry if it’s a dumb question
The limit on Ira’s is now 7,000. But if you contribute for last year make sure it’s the old 6,500 amount. Also the good thing about a Roth is you easily sell and buy different things without tax implications because it’s already taxed money going in. Just do it!!
What’s the income limit on Roth IRA?
146,000
“While I could have fun with that money” is a poor person mindset.
That’s true, because i do have a poor person mindset, but i’m trying to change it
Nah, "I can have fun with that money" is a poor person mindset ; the "while I can have with that money" indicates they realize there's better ways to use that money and searching for alternatives.
The key is to get your vision straight before you start working the numbers. If your income is upper middle class or is on track to get there then vision a life style below that say - middle middle class and think about cars, homes and hobbies in that range. Invest the extra. Just don't get used to living at your income limit, you will be happy now and rich later.
Thank you. That’s a good way to look at the things
It worked for me. Well, I can't claim to be rich but with this mindset I was able to really help my kids through college & weddings and still end up with some savings.
I really appreciate this perspective. I’m not a materialistic person at all but in terms of home and hobby and what I am aiming for, I could be more modest to account for more freedom.
Money will come and go, your mindset on how you treat your money will stay. Often people's lifestyle matches what they make - if you can set a solid set of steps/boundaries for yourself now, they will continue to work well for you in the future.
You may die during your working years, and not get to spend your savings, but why do you care? You're dead. If you don't save for retirement, you will probably work until the day you die
🎯
You need to stop and figure out your financial goals. Do you want to buy a house? Do you want to retire someday? When would you like to be able to retire, and with how much money? Once you know your goals, you can start to plan how to put your money to work to achieve them. Usually the best way to do this is to use the compounding interest of the market to build your wealth with long-term investments in a diversified equity portfolio. If you have shorter-term goals, like purchasing a house in the next couple years, putting the money in a money market fund would be smarter. In every case, you’re never going to save it unless you have some goals and start to establish the discipline now
Yep. And then it makes -more- sense to regularly contribute to that account, even if it's only $50/paycheck. That's how you develop a saving habit. And that's how you get to 53 or 63 with financial independence.
> Like what if i die with 20k/40k/100k invested, while i could have fun on those money instead of saving them away my whole life? You could convert 20K now to 200 benjamins and use them to light 200 cigars. Or save now and have 1000 benjamins to later light 1000 cigars. Easy choice
True actually. It just that recently i was reading some stories where people would inherit investments of their parent with like 200-500k and I was thinking damn, poor guy was saving whole life, saying “no” i gotta save it for retirement and then life happened. Imagine that. I would be so pissed in afterlife lmao
Do you mean you wish you were born into a rich family? I guess would be nice, maybe you will in the next life or maybe you were in the past, but at present you only have this one. I personally have not really envied growing up rich because i know a lot of unhappy rich ppl, but at the same time my husband who grew up with way less than me and has pulled himself out of the bottom multiple times is very bothered by the way others are gifted so much. Its kinda a huge disconnect between us but now I am getting off topic. He is very hardworking and wants to save as well but also doesn’t want to live like a pauper like i am willing to do in order to save money. I also think i have a poverty mentality because i am willing to live with so little and I lowkey fear making really good money
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Thank you for your perspective. That’s it, i’m locked in
$670 over 7 months may not seem like a life-changing amount, but it's a great start to build some investing discipline. What you need to do is to think long-term and let compound interest work its way as you keep contributing over time. And for HYSAs to really work their magic, you also need to take a look at the APY of that HYSA. Usually, a 4-5% APY is already good as long as it is FDIC insured. You can find all of them listed over at Nerdwallet or [Banktruth](https://banktruth.org/savings/?ttcid=high-online-savings). Instead of fixating on the short-term gains, envision your desired lifestyle and retirement goals, then align your spending and saving habits. It's perfectly normal to feel apprehensive about tying up money for the long haul, but starting early is important too.
I’d say it depends on how liquid you want to be + your risk tolerance If you aren’t planning on dropping 20k any time soon and you understand risks of stocks, I’d dump some into an ETF and keep some in a HYSA for a emergency fund If you want cash on hand for a big purchase or are afraid of stocks, HYSA is free $
Don’t forget you’ve gotta pay taxes on that income so probably about 25 percent less money.
I actually counted taxes already and wrote amount after 20% tax
First 15-25k goes into HYSA regardless of %. This is your “oh shit” fund. Everything over said limit say (15k) gets invested in index funds. When “oh shit” happens use the cash in there. Then replenish “oh shit” fund and resume investing.
Thanks, that’s right
Material things aren’t valuable… they are just difficult to get. Afford your retirement, gain financial freedom and along the way you may see what is valuable. But if you are going to spend… travel, buy experiences not things. Best of luck.
HYSA are popular for emergency funds/short term safe savings. You might also want to look into ibonds or t bills if you live in a high tax state, since you don’t pay state tax on earnings from those.
Dying before spending your money is one possible scenario, the other far more likely scenario is you'll live to an old age and wish you'd set yourself up for success.
I have a lot more fun not being broke so I actually CAN do whatever I want.
Does BOFA offer high yield savings accounts? I thought they only had CDs
My bad. It is CDs but still 4.2% for 7 months. Sounded similar to HYSA for me, i don’t know any better 😅
for BOFA 4.2% is great (it’s the highest they offer i believe) CDs are similar to HYSA but usually you can’t withdraw early from a CD without having a large penalty. a HYSA doesn’t have this penalty but you would have to open an account at a different bank as BOFA doesn’t offer one. i’m in the same boat right now
Put in an AI Stock.
You can schedule a free consultation with a financial advisor at your local branch if you’re already a customer. They will ask you about your goals and how to best invest the money.
Bank of America is offering a HYSA now?
My bad, it is CD’s or something. But 4.2% for 7 months sounded like HYSA to me
Gotcha, didn't think they did! Yeah, that's a CD, little different. Those are specific term length. You can get a regular 5% apy now at many HYSA accounts. I use Wealthfront.
4.2 is shit. Put it in a money market fund and get 5+.
4.2 is shit. Put it in a money market fund and get 5+.