Where should I keep my money?

Question

I’m a full time college student with about 4K saved up. I have around 1.5k in the stock market, and the rest in savings and checking accounts. At a basic level where I should I keep my money? I have read about contributing to a Roth IRA but don’t see now as the right time to invest more into the stock market because of volatility. I am planning on keeping 2k in my checking account for an emergency fund. Should I just keep contributing to my savings account even though it is low yield? Or should I wait out this volatility and invest entirely into the stock market since I am young. Or not wait and just invest into a fund like VTI.

My goal for the future is to save up for househack BRRR, but I don’t see that happening for a few years.

James Hamling · Answer

@Connor Pine while the $$$$ you have saved seems a considerable sum in perception to your regular earnings and expenses, I assure you it is a drop in the bucket.

That said, it's good mental habit to start, and you have. So knowing this is nowhere near actionable capital any time soon it needs to be in a good holding "nest" somewhere that it earns BUT is also safe from loss. I STRONGLY suggest a REIT stock. You will get a monthly compounding dividend (make sure to select automatic monthly reinvestment of dividends via additional stock purchase), done with a regularized professional account it is readily made liquid, and it gets you into both the REI and stock markets gaining some insight and knowledge via experience.

Stocks such as literally anything promoted on robinhood, never touch, literally never. That is a complete BS speculation game, buying apple hoping it will go up in value and at some day you sell and profit.... if rental housing was like that would you ever do it? Of course not, that's idiotic, it's literally gambling. No, legitimate stock investing is getting BOTH appreciable gains AND cashflow, until your playing in 7 digits plus.

Create a "nesting" account, strive for a 8%+ annual ROI, with REITS this is rather easy at this time.

Next, learn, learn, learn, learn. And save, save, save, save.

Exercise living off 50% of your income, literally. Immediately "steal" that 50% and put it away into accounts and figure out how to survive on whats left and feel the pain, let the pain motivate you to watch less tv and get a 2nd job, increase earnings. Save 1yrs living expenses AND investment capital, never use 100% of your saved capital on any REI deal, NEVER EVER. You must have contingency reserves for everything.

If you can do this, learn this discipline, guaranteed you WILL be wealthy and will be all but retired by 40. When you get a new apple phone vs a simple cheap android no name picture that as 2 yrs more working, that's what that $ actually does. How do you eat an elephant, 1 bite at a time.

Jesse Morrell · Answer

@Connor Pine put it in real estate as fast as you can. The dollar is a sinking ship. It constantly loses value with inflation.

Sam Lewis · Answer

If you have solid credit (700s), a decent job post-graduation, and about 5% saved up of the approximate home you want to purchase (multiply your salary by 4 as a conservative estimate as what you can afford), then you should be able to purchase a househack post-college.

I would keep pushing for savings in that range so you can put 3% down for a property (first time home owner, conventional or FHA), ask for 3% back at closing, and budget 2-3% for closing costs. So if you bought a 200K househack, you may only need as little as 8-10K out of pocket.

I would run the highlighted text above past your local real estate agent so they can give you some local perspective on what is realistic for you

Erickson Sainval · Answer

You need it in a place that allows for it to be liquid so you can invest, it will grow at a rate that is beating inflation and is making you more money. If it can satisfy those three things than your all set. There are some vehicles for that, but it all depends on what you are willing to risk. VTI as you said could be an option (i.e.: brokerage account), high yield savings account beating inflation (if this exist, probably not), modified whole life policy, and more. If you are not ready to commit to a Roth, you could look at just doing a brokerage account.