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In today’s financial landscape, many investors are looking for options to amplify their profits beyond the standard high-yield savings accounts (HYSA). When it comes to increasing their funds, people think of ETFs such as VOO, VTI and SPY due to their low fees and diversification.
This is the case for a couple with a combined annual income of $70K and a substantial sum of $235K in an HYSA, earning them 3.8% and $9K in their checking account.
Because they want to purchase a $1 million home in the next five to seven years, they are considering investing their money in index funds or ETFs for higher returns.
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However, according to a post one of them made on Reddit, a discussion board with over 2.6 million members, they are concerned about stock market volatility and cannot figure out how to balance the money.
“Where could we start putting some of that $70,000 saved a year (and maybe that $235,000 we already have) to have it grow safely more than 3.80% a year? And what percentage of that money would you put elsewhere? What percentage would you keep in the checking account or HYSA?” the poster asks.
Reddit’s r/bogleheads community shared their thoughts in the comments. Let’s see what they recommended to the couple.
See Also: Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” These high-yield real estate notes that pay 7.5% – 9% make earning passive income easier than ever.
Focus on Safe Options for Stability
Many commenters suggested the couple consider safer options, even though there aren’t many to choose from. A few examples were mentioned, including Treasury notes, bills and CDs.
“If you want safety above all else, your choices are pretty limited. You can certainly do better than 3.8%. Options include CDs, money markets or treasuries. 5-year Treasury notes are currently yielding about 4.4%, with the 7-year at around 4.5%. If you are confident that the money will be needed only at the five or seven-year point, buy and hold some of these,” one comment reads.
