With the Fed lowering interest rates and banks offering less competitive returns, where do you recommend putting your money? Options like high-yield savings accounts (HYSA), CDs, money markets, bonds, or investing through Fidelity or Vanguard are all possibilities. Which of these options can provide more stable and higher interest rates in the long term?
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I am throwing everything at my mortgage. The past few years have been fantastic. I am going to bet on my debt settlement freedom rather than the market’s potential to rise further.
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The market might keep rising, but there is a sense of freedom in having my debt settled.
I think many people overlook the human aspect of money. Sure, you might have a 2% or 3% mortgage, but being debt-free is also valuable, even if it doesn’t seem logical when comparing investing to paying off the mortgage. There’s nothing wrong with reducing debt. Keep it up.
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As someone who is about to take on a mortgage, I have been reflecting on this a lot. If I invest every extra cent into my mortgage, it will reduce the principal, but if I instead put that money into a high-yield savings account or an ETF, it might earn more over time, allowing me to pay off the mortgage later. My question for anyone is: what’s the optimal balance?
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based on the rate on your mortgage. I won’t be making any payments toward it before it’s due each month, ours is 2.25%. That’s a pretty damn good guaranteed return on investment if my rate was close to 6%.
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Even with a 6% mortgage, I believe you’re better off investing in the market. If you ever really need cash, it’s easier to access it from your investments. Plus, the mortgage interest deduction effectively lowers the real cost of that 6%.
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I have no additional money to invest right now. I am filling my tank, feeding my kids, and covering my wife’s expenses.
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children’s mouths
Right now, more like my child’s daycare.
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The incredible thing about daycare is that, eventually, it just comes to an end. You will still have expenses for sports, lunches, and field trips, but those costs are minor compared to daycare.
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I have a 12-month CD maturing soon, which will be my down payment for the next house. I am still benefiting from the 5.5% CDs I invested in last year, which also cover my truck payments. With the market at all-time highs, I am hesitant to risk my down payment money there, but I’m comfortable investing my retirement funds.
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I recently shifted all my funds aside from my emergency fund, of course into ETFs. I’m a big fan of Vanguard, as they account for about 80% of the ETFs I’ve chosen for my portfolio.