High Yield Saving vs all in stock

Oscar 🐨koala
Mar 31 25 Comments

I want to park 40k for long term investment. It’s little but nonetheless...

I can open Marcus (by Goldman and seems to have better service and rating than Ally) vs buying more stocks (MSFT vs GOGL) vs more in Vanguard.

What would you do? I was thinking 10k as emergency fund in saving account and the rest in the stock market.

I already own Vanguard VTI and VGT (5k each).

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TOP 25 Comments
  • Chase / Other nghtmre
    Sounds reasonable. Depending on your monthly expenses, if you can keep 4-6 months emergency fund. Marcus, Ally, and CIT allows you to access your funds pretty quickly.
    Mar 31 8
    • Oath / Mgmt Atinlay1
      How quick is pretty quick? You’re probably still waiting on an EFT. A few business days at the least. I have one through my regular bank at 2% with immediate access.
      Mar 31
    • Apple hakunanaMa
      7 days for no penalty cd at 2.35
      Savings account-2.25% asap
      For Marcus
      Mar 31
    • Oath / Mgmt Atinlay1
      Even ASAP is >1 business day.
      Mar 31
    • Cruise Automation 2sloeurn
      It’s a business day at Ally/Marcus. It’s just a savings account. There’s literally no way to be faster.
      Mar 31
    • Oath / Mgmt Atinlay1
      That’s why I said through your own bank. Mine is completely immediate to transfer from savings to checking.
      Mar 31
    • Cruise Automation 2sloeurn
      Obviously same bank transfers are immediate, but you’re very unlikely to find your checking account bank offering 2.5% interest. A day is about as quick as you can hope.
      Mar 31
    • Yelp / Eng sJJv80
      My checking account is 2% up to $25k.
      Mar 31
    • Morgan Stanley jumpornot
      Right. You can still transfer it to your checking account if it is the same bank and that’s immediate.
      Mar 31
  • Google PageRanker
    You should have separate rainy day fund and long-term investment. Rainy day in semi-liquid no risk funds (savings, CD, treasury bonds).
    Long-term investments should be diversified based on your horizon and risk tolerance. Decide on an asset allocation (stocks/bonds/cash) and stick to it.
    Mar 31 6
    • Oscar 🐨koala
      OP
      Thanks makes sense.
      Mar 31
    • New / Eng
      errfileno

      New Eng

      PRE
      Microsoft
      BIO
      Senior Software Engineer. 15yoe. Seattle. $305k TC
      errfilenomore
      This.

      Not all CD's are created equal. For a rainy-day fund, I prefer to select one with pre-maturity withdrawal penalties that align with an "oh shit I need that money now" mindset, forfeiting some recent interest on the principal withdrawn but no other fees or delays.
      Mar 31
    • Google PageRanker
      With CDs you can build a ladder where part of it matures every month. This way you will avoid penalties (unless you need the entire sum to pay gang extortion money)
      Mar 31
    • Oscar 🐨koala
      OP
      What CDs would you recommend? Managed by...
      Mar 31
    • Google PageRanker
      CDs are issued by banks and are FDIC-insured so they are as safe as savings accounts.
      Doesn’t really matter IMO.
      Mar 31
    • New / Eng
      errfileno

      New Eng

      PRE
      Microsoft
      BIO
      Senior Software Engineer. 15yoe. Seattle. $305k TC
      errfilenomore
      Both of the credit unions I belong to have good options. Look into your local ones.
      Mar 31
  • Credit Karma kqqo46
    Vanguard. Cash gets parked in vmfxx which currently yields 2.38%. Or buy broad based etfs or mfs such as vti or vstax
    Mar 31 6
    • Oscar 🐨koala
      OP
      I often think about if switching to VSTAX is worth it - given how EFT is advertised as more “tax efficient”.
      Mar 31
    • Cruise Automation 2sloeurn
      Worth it compared to what? You should be sitting in VTSAX for long term investments. Don’t buy individual stocks.
      Mar 31
    • Credit Karma kqqo46
      Compared to the etf equivalent vti. Mostly the same but there are differences.
      Mar 31
    • Cruise Automation 2sloeurn
      Was talking to OP, sounds like he’s only storing MSFT/GOOG/cash.
      Mar 31
    • Oscar 🐨koala
      OP
      Well I own multiple stocks (kind of a novice mistake I guess), and am in the process of selling some of them to pull money out. Thanks. Will do more research!
      Mar 31
    • Intel DonaldDD's
      ^ The reason a lot of people recommend ETF’s is because of the comfortable balance of risk for high returns and safety.

      An index fund will generically follow the trend of the growing economy, without a chance of really over-performing.

      A single stock has a lot of risk, but can return an extremely high rate. Likewise, you can lose much more than a typical index ETF.

      Furthermore, some people “diversify” even more and purchase multiple ETF’s across multiple US stock exchanges (S&P500, NASDAW, DOW) and International / “emerging” stock exchanges (Germany, Brazil, various Asian markets). This broad balance produces even less total chance of over-performing returns, but trusts in the stability of the global economy with even less risk.

      A “portfolio” could be a few stocks that you are gung-ho on (~10-20%), some index ETF’s (~30-50,60%), some international ETF’s (~10-20% in 2-3 markets), and even bonds (5-10,15%)/cash (1-2%) if you like tin foil or tapioca pudding. A lot of retirement funds are setup to something similar to this. This paragraph is a super generic example of percentages, but gives some better examples of how it’s commonly done.
      Apr 1
  • Google
    tsukino

    Google

    BIO
    w
    tsukinomore
    risk and return: stocks > high yield > cash
    so if you want to be semi-aggressive, invest primarily in equities ETF, with the rest in bonds and cash
    Mar 31 1
    • Oscar 🐨koala
      OP
      Yeah I will do more research, thanks!
      Mar 31