I’d definitely start considering inflation. If your money is stagnant and not earning interest, it is shedding value. Like it or not, we’re all inherently playing the game; it’s in everyone’s best interest to learn the rules.
High interest savings accounts are still offering 3-4% or more. It’s a good spot to park your emergency fund. $600/year just for storing 15k ain’t bad at all plus it’s all FDIC insured (and you can also invest some of it into CDs if you’re willing to lock that money away for a couple of years in exchange for a higher interest rate)
E-Fund, yes, for sure put that in an HYSA so that you can access it when needed. However, if a person is keeping non-E-fund money out of the market for fear of volatility, they’re actually technically undertaking a larger risk than being in the market because their money will never outpace inflation, whereas investing in a low-cost broad index fund has an extremely high chance to outpace inflation over a 5-10+ year horizon. Not to mention that when an investor undertakes market risk they’re also getting a positive risk-adjusted return in exchange for doing so.
Also, keep in mind that HYSAs don’t always offer such high rates every year, whereas inflation will always be present. And despite the “official” inflation numbers being around 3%, my actual expenses say otherwise, so I’d still be eyeing 3-4% as treading water at best.
If at all possible, get the snowball rolling on compound interest and let gravity do the rest; your future self will thank you to bits. Head over to one of the finance communities and they should set you straight. Personal finance is effectively a solved math problem; there’s really only one good answer that people will give you as long as they’re not trying to reach into your pockets for a cut, and the skill required to invest is zero. All you need is any amount of extra cash every month to pack onto the snowball. Time is by far the most valuable part of investing, so the earlier you start, the less of your cash you need to invest to get the same outcome: a reasonable retirement age with a body that isn’t burnt-out.
I’d definitely start considering inflation. If your money is stagnant and not earning interest, it is shedding value. Like it or not, we’re all inherently playing the game; it’s in everyone’s best interest to learn the rules.
High interest savings accounts are still offering 3-4% or more. It’s a good spot to park your emergency fund. $600/year just for storing 15k ain’t bad at all plus it’s all FDIC insured (and you can also invest some of it into CDs if you’re willing to lock that money away for a couple of years in exchange for a higher interest rate)
E-Fund, yes, for sure put that in an HYSA so that you can access it when needed. However, if a person is keeping non-E-fund money out of the market for fear of volatility, they’re actually technically undertaking a larger risk than being in the market because their money will never outpace inflation, whereas investing in a low-cost broad index fund has an extremely high chance to outpace inflation over a 5-10+ year horizon. Not to mention that when an investor undertakes market risk they’re also getting a positive risk-adjusted return in exchange for doing so.
Also, keep in mind that HYSAs don’t always offer such high rates every year, whereas inflation will always be present. And despite the “official” inflation numbers being around 3%, my actual expenses say otherwise, so I’d still be eyeing 3-4% as treading water at best.
If at all possible, get the snowball rolling on compound interest and let gravity do the rest; your future self will thank you to bits. Head over to one of the finance communities and they should set you straight. Personal finance is effectively a solved math problem; there’s really only one good answer that people will give you as long as they’re not trying to reach into your pockets for a cut, and the skill required to invest is zero. All you need is any amount of extra cash every month to pack onto the snowball. Time is by far the most valuable part of investing, so the earlier you start, the less of your cash you need to invest to get the same outcome: a reasonable retirement age with a body that isn’t burnt-out.