Savings- I have 20k in my savings for emergency. How should I make this money work for me or best place to save cash

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mentalwave

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May 15 16 Comments

Best way to save or invest 20k savings

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TOP 16 Comments
  • Hertz !XXX!
    If its an emergency fund. You need to be able to take it when you need it. I would put it in a secure place like Marcus Savings accounts from Goldman & Sachs. It will give you 2.25% of Annual Percentage Yield. You could put also $10K in it and $10K on a 12 months Certificate of Deposit with Marcus with an APY of 2.70%. Zero risk it’s what you want. You need 6 months of salary after-tax in an emergency fund. $20K means that you make $3300 after tax, per month.
    May 154
    • WeWork NewPlumbus
      lol, 6-months of after tax salary is borderline impossible if you have student loans, and/or live in the Bay Area or NYC.

      If you make $10k/mo after taxes, you’d be looking at $60k. Even if you could save $2500/mo (which is on the high end. That’s 25% of your after tax income) you’re looking at 2 years of saving to get there. That’s assuming you aren’t going on vacations or making any big purchases for 2 years.
      Realistically you can maybe do $2k a month, you’re looking at 2.5 years of solid saving to build that up, and that’s assuming you’re not putting anything into 401k, other investments, or paying down those student loans.

      3 months is a more manageable, realistic figure for many of us. Even then, that’s tough if you still have student loans in the Bay Area or NYC.
      May 15
    • Hertz !XXX!
      Almost all the advisors are stating 3 to 6 months after tax, after savings. Basically 3 to 6 months for core expenses like rent/food/transportation. See one of the source: https://investor.vanguard.com/emergency-fund/

      But I do agree. As a student I had almost nothing.
      May 15
    • WeWork NewPlumbus
      One thing to keep in mind is that you realistically need 3-6 months of 80% of your salary.

      Assuming your current salary includes saving 20%, then you can assume you can still afford to live on 80% of your salary while saving nothing.

      So if you make $10k/mo after taxes, then you can have an emergency fund of $24k.
      May 15
    • Hertz !XXX!
      Yes this is correct. You have to keep only the core expenses.
      May 15
  • Groupon OP19
    It's an emergency fund you want 0 risk and guaranteed return, I would only do high yield saving for those money
    May 150
  • Nvidia signale
    Bull market seems to be coming back in crypto, worth a look.
    May 152
    • 🤦‍♂️
      May 15
    • Nvidia signale
      Someone missed out on the last one and will probably do it again.. 🤦
      May 15
  • New AsYK38
    Have a line of credit available for 6months of expenses. Put half of the equivalent cash amount into a diversified etf and the rest into a savings account.
    May 151
    • Microsoft
      mentalwave

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      OP
      Please give me an example of a diversified ETF
      May 15
  • Groupon cuts
    put at least however much you immediately need in a high yield savings account like discover or amex. but if it's truly an emergency fund, then this should be all of the 20k

    put the rest in VOO or VTI or another index fund
    May 152
    • Microsoft
      mentalwave

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      OP
      What are your thoughts on VSTAX
      May 15
    • Groupon cuts
      I think it's actually exactly the same as VTI.

      But as others have mentioned, you want your core emergency fund risk free, because a market crash could = no job and stocks lose 50% and now you're SOL if that was where most of your money was
      May 15
  • New cbrusca
    Wealthfront has a 2.29% interest cash account with no fees
    May 150
  • Microsoft yesterda
    Put in savings account
    May 150

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