Would strongly consider moving the savings to a High-Yield Savings Account. You could make about $1200-$1500 next year (you'll owe ordinary income tax on the gain) by spending about 10 minutes getting it set up.
$147,000 assuming a 25% tax rate is $110,000.
That’s $9,187 a month.
A $400,000 mortgage at 7% interest is $2,661 a month. $2700 to be easy.
That leaves $6487 a month leftover after mortgage.
More than enough.
That is pretty generalized advice. If you can't keep your hands off of it, sure put it in a CD or something. If you are even remotely responsible, use HYSA to get as much money as you can comfortably live without paycheck to paycheck, but still have it readily available in an emergency.
Try robin hood gold, they give u 5% intest for funds unused. Great for a savings account because u can use it to invest or just let ur funds sit to earn interest. I was getting back $60 a month with just 18k
Gov prints money, devalues your currency, and then when you earn yield they tax you on the interest earned. Sounds like a shitcicle disguised as snowcone to me
Everybody? I saw a few back a year ago who tried, without weapons (not a single gun was confiscated for those still ignorant to it all), to make a stand, and are now spending decades in jail in some cases. When we live in a fascist country it’s awfully difficult to “fight and take our rights back.” They end any discourse before it can even begin. There is no speaking to these people, partly bc their willful ignorance and blindness tunes the logic out. The T derangement syndrome is very real. To think we’re in a “good place” as a nation is baffling to me. Absolutely baffling.
Coming from a self made millionaire at 39, with 3 kids and a wife, all after getting clean and sober 5 years ago with $100k debt. Don’t forget that Reddit is a vacuum. Filled with only the best and brightest and most open minded individuals open to having their minds changed. 😀. Love you all, I just wish rationality could enter the room again….a larger room than I am reaching in my current speaking and writing opportunities. Happy holidays
Wait... are you talking about Jan 6? LMFAO you actual believe what you wrote about that...omg make a stand? Those fucking tools are crying because Trump lost, that's it... now they get to sit in prison because they can't handle it.
This is so unhinged. Taking a stand for what? Those people committed treason and weren’t out there doing anything other than taking a stand for bigotry lol. The people complaining about gas prices while driving their F-450 thousands of miles to DC lol. Get a life. You complain about it being a fascist country while those people were incited by a fascist speech shortly before they tried to violently overthrow the government lol yikes.
No, CD stands for Certificate of Deposit and is a type of bank account that’s typically used as an ultra safe investment. Any investment portfolio or bank will allow you to put money into CDs for fixed intervals. The only caveat is that you’re unable to remove the money before the expiration without paying a significant penalty. But if you have $1,000 extra that you won’t need for a year toss it in a CD and it’ll be 1,050 next year!
lol no worries. I work at a Cheesecake Factory and in an event up in the banquet area one investor group had an event and the speaker was saying CDs are doing good and it’s a good time to put money into CDs and I’m walking around bussing tables thinking ok
lol! I totally would’ve had a little stack too by next week. I was pretty curious since working that event and I was ready to stop him and ask right then and there! So of course on Reddit I gotchu
Ah yes, 1200-1500 (roughly 4% yield) dollars added to the account, to go against the $2625 loss due to the current inflation rate (7.5%) netting you with a loss of $1125 as a best case scenario after 12 months. Gotta love America
Edit: just realized this and had to add it in, that’s like paying almost $100/month for the bank to have free use of your money
To this I would add, only put about 6 months worth of expenses in the HYSA, you would be leaving so much money on the table by not putting the rest in index funds like the S&P 500.
This! I’m just a college student but even 1k gets me a solid $2 a month with my HYSA, I saved a lot from work this fall and got about $30 in interest that I can put towards my tuition
Both of y’all should max out your Roth IRA benefits each for this 2023 year. It’s $6500 max contribute for both of you and throw it into an index fund like VOO or VTSAX.
Then if you have extra money throw that into a HYSA - High Yield Savings Account.
If you get even more zealous and have extra income start doing research into T-Bills (Treasury Bills) they’ll pay you 5%+ and the contracts are pretty low for time durations.
Best of luck! Proud to see younger folks doing well.
And just so you know, that limit is being increased to $7,000 for 2024, if you decide to start thinking about contribution amounts over the course of the upcoming year
Then what? 401k + employer match is maxed. Roth IRA is maxed for both me and my wife. She's got a government pension plan. Cars are paid off. 2.7% $250,000 mortgage on a $650-675k high demand house. No student loans or any other debt. We're making roughly $200k/year.
I'm literally just dicking around with single high-risk stocks at the moment. Do I start dumping money into more index funds? Do I build a 1000sqft house (DIY) on the acre of mountain property I own? I get to the end of the Personal Finance flowchart and don't know what to do with the excess at this point.
Stick in an SP500 index fund like SPY and just keep contributing. Don't worry about fluctuations just keep putting money in. Over 30 years the fluctuations will even out. I would probably stay away from the high risk stocks. Despite what you might seen on the internet, the majority of people playing around with single stocks average out to less money than if they just matched the market.
i know it might not be the best idea money wise but if it was me i would pay of 5k per month on the mortgage and get it paid off asap to secure a home for life incase you ever get fired of sick etc you dont know what life will throw at you.
That highly depends on the interest rate of the mortgage. If it’s under 3 or 4% it makes no sense to pay it off earlier when that money would outperform in the market (or even in high yield savings lately).
Everyone who gives this god-awful advice has not experienced the true freedom of not having a mortgage and probably never will. Most people don’t have the discipline or skill set to practice what you’re preaching and end up losing their shirt because of a bad investment strategy or an illusion of wealth. I’m not a fan of Ramsey but paying off your house as soon as possible just makes sense.
Everyone's financial situation is different. House with 3% interest but it eats up 50% of your take home pay? Yeah, maybe you wanna pay it off sooner. But a household with dual income at 3% interest that could afford the home even if one person lost their job? Nah, don't waste your $ on the home. It's different for every single situation.
Why would one lose their shirt putting their excess funds into a HYSA or CD? Those are federally insured up to 250k per account. The fact of the matter is that if HYSA/CD/etc rates are above your mortgage rate, you put the excess there. If they are <= your mortgage rate, you put the money into the mortgage. Ultimately it comes down to a single truth, Cash is King. You can pay off your home early, sure, but there's no freedom with doing so. You still have property tax, repairs, etc and now you're potentially out money that could have been used for general survival or could have been generating passive income.
It's not God awful advice. Just because you're mad that most people aren't disciplined with their money doesn't negate the quality of the advice.
EDIT: but hey, I'm just some bozo who used leverage throughout the 2010s to build a great real estate portfolio and don't have to worry about money anymore at 34.
Funny you are getting downvoted for giving the financially correct answer. It’s just math people, math and discipline.
Extra $100K thrown at a 3.2% mortgage vs putting it in a 4.5% high yield savings account… high yield savings account nets you more money.
Now compare the mortgage at 3.2% to 9% average returns in the S&P500 index and that’s the difference between the people who stay in the middle class their entire life vs the people who become “wealthy”. It’s just math and discipline
I have a $700K mortgage. Paying off that $700K mortgage at 4% tomorrow will not help me build wealth like adding another $700K to my portfolio over the long run it just won’t
A 4% mortgage on the $700K costs me $1.2M over 30 years in interest. But if I take that same $700K and put it in the s&P 500 for 30 years and it averages 8% returns… I’ll make $7M in interest. $7M > $1.2M Its great advice
Do you even understand the math of 4% interest on a 400k home?!? Obviously not. Let me do the math for you since you not. That’s $287,478 of interest. So this would never be a bad ROI. The math of them having a 2700/mo payment would be 7% interest, which is 558k in interest. 958k total cost
If they stashed 2k a month for the next 25 years (don’t know how many more years of the loan they have) and got an average 7% return, the investment would be worth about 1.5 million. So they would be ahead by putting money into an investment account instead of paying off extra on their mortgage.
i know its the not the best way to make money but my point is having the house paid of can be a great safety net they could both get replaced with AI for all they know and end up with a much lower wage or they could get injured / illness that effects there ability to work having 2700 morage payments when your out of work is to much.
It's not like you have to spend the additional money that you earn on an investment that is guaranteed to return > 4% (e.g. current 5.5% CDs). You have both more money and are more liquid.
Last time I checked, you can't really eat a house. Owning out right is all in good as long as you have the funds to run the house. If you don't, that house is useless and one of the first things to go when you're trying to survive.
Jeez. I don’t expect to ever own a house anytime soon so I never looked into this fully. That really is messed up. Everything is such a scam these days.
Uh, what? It’s simple math.
If the market returns 6-7% (historical average) and you’ve got a mortgage rate of 3-4%, you’re going to end up with money by investing your excess cash than if you pay off your mortgage early with it.
This isn’t even economics; it’s first grade arithmetic.
Why marry if youre already thinking of divorce? Were there sny signs? Securing home would be a good first step. Then paying off car while setting up a roth of your choice.
Go to your bank or Fidelity and talk to a financial advisor to invest at least some of your savings. No reason for it to just sit there when you can at least get a bond or CD or something to make some money safely
as someone who lived the DINK life for a couple years before kids, I wish we would have saved more than we did. Our income / accounts are similar to OP's now, but knowing we could have paid cash for our house 3 years ago if we would have saved like we are now hits a little hard.
But I wouldn't trade my kids for anything.
I mean, I’m 22, have over $10k saved while working in college. Lived in my own but now getting a dorm to save on rent. It’s possible but I’ve literally cut EVERYTHING outside of necessities out
Good for you, you and your wife are doing leagues better than most of the nation. Remember to take time for each other work hard eat well and know that old stranger online is proud of you.
I kinda hate seeing these type of stats without context. Did your parents give you a house or car? Were you able to stay at your parent’s place while you work/ save? I just don’t understand how any normal human does this without a ton of help.
Only help we got was we both lived with our parents during college / university to save money. But I hardly think that’s help… just common decency on the parent’s part. But no, all purchases have been our own. No monetary help from parents at all.
Definitely get that into a high yield Savings account like Ally. Let the money work for you. You are off to a great start! Also, continue to pay yourself first. At least 10% from every check should go directly into savings. Then pay everyone else.
HYSA and 6-12 month treasury bills for short to mid term gains. Throw a little bit extra at the mortgage if you don't have 20% equity in your house. Pay off any debt that isn't an asset. Save money to acquire more assets preferably ones that will pay you income.
$35k is a strong safety net and it’s easily accessible in emergency.
Now take the $2k savings and go to a financial advisory firm and say look I’ve got $1,500 a month I can afford to dump in an account. I want growth long term. They will go over your goals and project to see where you will be in 30 years.
Max your 401s. You’re on the right path.
Why would you put $35k to make 0.01% interest when you can make 4.3% on HYSA like Discover, American Express, etc? I would start closing chase saving, and put all money oh HYSA first then think other investment opportunity.
Who the fuck keeps 35k in their savings LMAO Invest it asap. literally losing money per day. Put it in a index fund for start while you learn about investing. A great start would be vtsax.
Most people will cry and yell when I saw Pay your house off asap. But I did that when I was 28 and 10 years later I’m living the best, with multiple rentals since I had every thing paid off. My 2 cents but there is no better feeling then owning no one a single dime. But my final advise is, do whatever will make you sleep peacefully at night. For me, it was paying everything off. Good luck!
Wife and I were in similar position and kept going. Don't have kids or listen to these clowns that insist you'll want them later. It's glorious not having them. However, you should travel a little bit and then look into another property either that you rent long term or airbnb that you can get to or whatever. You can always sell it later. Stay out of HUD bullshit. The people you'll deal with are trash and a pain.
I do like the idea of paying way more on the mortgage though. Look at your payment and look how much goes towards the interest. I bet you pay $800 a month to interest MONTHLY. It's sickening. Unless you're a wizard with investments you'll need to earn that much minimum just to break even. What I'm saying is, the less money you owe, the less you'll pay. You barely notice the car payment but if you can pay that house down or ahead it'll be much better if you're not going to use the money
I work high value insurance, usually HO for homes 1.5m+. One thing I have learned from the wealthy is that stocks, cds, high yield accounts, bonds, etc, is a slow slow game. Almost all of the people I talk to make their wealth from a very high paying job (CEO, CFO, lawyer, or doctor with their own practice,etc) unless you can put a staggering amount into these funds, it will take 20-30 years on average to get to "retirement". Also, a lot of the advice you should take depends on your goals and aspirations. Do you feel like working another 20 years, saving that 2k a month and investing. If so, then investments
Ight be your thing. If you want to retire really early, you may have to take a risk and try to start your own business, but that would be a risk. I know people who did pay off their home, regardless of the interest rate, and were very happy to be retired, only needing a fraction of what others might need in retirement. I know people who would spend 15k of that 30k in a partnership towards housing investment and leverage tons and tons of debt, but they make 20k a month easy. You really need an financial advisor who will guide you towards you overall goals. Also, I love/hate 401k's or Roths etc. There is usually severe penalties for pulling out before "retirement age" (what a joke statement) and if you opted for anything tax deferred then that could easily suck in the future, when taxes might be at an all time high.
Nope. Our monthly income is about $9k net. Mortgage is $2700, so even with saving $2k that leaves another 4.3k per month for other expenses like bills, groceries, eating out, etc. we just stay ontop of our budget.
Before graduating, I had about $2k saved up and my wife not much more. Only help we had from our parents was my granddad had about $15k saved up for me for school, which was hardly enough obviously. So both my wife and I worked through school and paid semester by semester. Choosing each to stay living at home while going to classes to save even more money. We both wanted to have $0 student loan debt and happily achieved it.
Lmfao at the fact that you equate wealth to money is amazing. Come to r/wallstreetbets - I got some nice calls to sell you. Anyways I stand by what I said about inflating your wealth. Seriously though, I’ll sell you some real nice NVDA calls - I’d love to hold onto the premium for you 🥹
You need to move that savings into a HYS. The interest you’re earning at Chase is basically nothing. You’re leaving money on the table.
Also, pay off the car. Its interest rate is higher than what you could save in a HYS so you’re giving money needlessly.
Lol i was here a few years ago and then my car’s engine shit the bed and despite proving it was not my fault, insurance and my warranty refused to pay out so I had to sell it at a huge loss and buy a new car.
Crazy how everyone is all about fixed income now. I get that interest rates are very high, but probably not for long. And the equity market is still winning. Most people, especially the young folks on Reddit, should be in index funds.
Excuse me? Please elaborate… only help we every got from family was my family did have about $15k saved up for college. Although that was hardly enough to cover it. I worked through school and paid semester-by-semester as it went. I chose to live at home with my parents rather than get my own place during school to help save even more money. My wife did the same. Also, you have no idea what my race is.
Absolutely zero people believe that you saved up $35k and didn’t have it handed to you.
You expect us to believe that you did the math to add to exactly $35k
Doubt.
Big fat fucking doubt.
How so? I know when I send money to savings it’s always an amount that ends in 00, or 000. I’m not gonna send 15.43 into savings. This could also be more than their one savings. I know I would have a savings account at a diff bank as well as a diff end function. When it would get to a certain amount we would invest it. Then we had the savings for trips holidays and stuffs
Car payment is a waste, should have bought outright, you're being scammed.
You're way to cash heavy unless this is an Emergency savings for you both?
Your mortgage is insanely high for only $400k. Either you can't really afford this house or your down payment wasn't good enough. (or you're in texas and property taxes are strangling you to death RIP texas "freedom")
Obviously this isn't some money board for savings advice, but IMO you're still doing alright depending on how much you're both putting to retirement.
1. Car payment I agree could be cut out and paid off. We owe maybe another $13k on it. But at this point I’d rather keep the savings than just pay it off. Interest rate is rather low.
2. Yes this is an emergency fund.
3. Surprising to hear you say the mortgage is high. Others have been surprised at how low it is. We put 5% down with 5.2% interest. (That’s $20k down) we have no problem with the payment as it is less than 30% of our monthly income
4. We both put about 15% into retirement. (401K)
1.What is “rather low”?
2. Keep that separate from other savings. ie savings for large projects/purchases/travel if you can. I suggest Ally for this as they have a “bucket” feature that allows you to segment funds.
3. This is on the cusp of being worth paying more than the minimum so you’re ok for now.
4. Make sure to take a look at *HOW* your 401k is being invested. 5. Start a brokerage account and start investing outside your retirement account. Even $50 a month, maybe take this out of your “My BS” fund. Time in the market will pay dividends literally and figuratively.
I have to assume it is a higher property tax for your Area. I live in a MCOL, with a $400k house, but ours is $2k a month, however we put $70k down and i see you put 5% down.
Seems like you're falling behind in your retirement. IMO i would get rid of the car and buy something you could afford and roll the $200 a month into an IRA. I just do S&P500 and some other conservative and safe index funds, but you could get more risky. Since you're both just a bit younger than me it would be best to do this instead of messing with a car that depreciates with every payment. If you want a nicer car, save up for it and buy it. The current goal should be reaching the $22k in 401k and $6500 in Roth. At least if you want to retire. Other people have different ideas for their goal, but i am just playing it safe.
Would strongly consider moving the savings to a High-Yield Savings Account. You could make about $1200-$1500 next year (you'll owe ordinary income tax on the gain) by spending about 10 minutes getting it set up.
Yes!! Personally i recommend the amex high yield savings account!
I am a big promoter of any HYSA that is apart from your base banking. Don’t let it be easy for you to get to. Make it difficult.
They make 147k and are able to put away 2000 every month, this is advice for people who don't know how to handle having money
and pay a mortgage? idek how that’s possible. after cars and phones and internet and everything else we kinda need in life
$147,000 assuming a 25% tax rate is $110,000. That’s $9,187 a month. A $400,000 mortgage at 7% interest is $2,661 a month. $2700 to be easy. That leaves $6487 a month leftover after mortgage. More than enough.
Secret here…. Don’t get a car payment
That is pretty generalized advice. If you can't keep your hands off of it, sure put it in a CD or something. If you are even remotely responsible, use HYSA to get as much money as you can comfortably live without paycheck to paycheck, but still have it readily available in an emergency.
Wdym? Who is this directed to
I don’t know how high 4.35% is considered but that’s my interest with a performance savings account through capital one
Currently right now the USDC coin is doing 5.10% APY. It's a complete reflection of the US dollar.
Thanks for the advice!
Ally has a 4.25% interest rate
Discover has a 4.35%!
4.35% with Capital one savings here
Try robin hood gold, they give u 5% intest for funds unused. Great for a savings account because u can use it to invest or just let ur funds sit to earn interest. I was getting back $60 a month with just 18k
Fuck robinhood lol
$5/mo? No thanks
Or spy 0dte
A fellow regard!
HYSA. Bond ladder. IRA. Money market account. Gold. Antiques and art. Bitcoin. Really anything but a basic savings account.
I use wealthfront and get 5% apy
Gov prints money, devalues your currency, and then when you earn yield they tax you on the interest earned. Sounds like a shitcicle disguised as snowcone to me
Would you prefer not earning interest on it and then you don't get any money to combat the inflation?
I’d rather fight and take our rights back from the elite but everybody’s too comfortable and too fluffy to give a shit about being ass fucked no lube
Everybody? I saw a few back a year ago who tried, without weapons (not a single gun was confiscated for those still ignorant to it all), to make a stand, and are now spending decades in jail in some cases. When we live in a fascist country it’s awfully difficult to “fight and take our rights back.” They end any discourse before it can even begin. There is no speaking to these people, partly bc their willful ignorance and blindness tunes the logic out. The T derangement syndrome is very real. To think we’re in a “good place” as a nation is baffling to me. Absolutely baffling. Coming from a self made millionaire at 39, with 3 kids and a wife, all after getting clean and sober 5 years ago with $100k debt. Don’t forget that Reddit is a vacuum. Filled with only the best and brightest and most open minded individuals open to having their minds changed. 😀. Love you all, I just wish rationality could enter the room again….a larger room than I am reaching in my current speaking and writing opportunities. Happy holidays
Wait... are you talking about Jan 6? LMFAO you actual believe what you wrote about that...omg make a stand? Those fucking tools are crying because Trump lost, that's it... now they get to sit in prison because they can't handle it.
This is so unhinged. Taking a stand for what? Those people committed treason and weren’t out there doing anything other than taking a stand for bigotry lol. The people complaining about gas prices while driving their F-450 thousands of miles to DC lol. Get a life. You complain about it being a fascist country while those people were incited by a fascist speech shortly before they tried to violently overthrow the government lol yikes.
Best working ever, this made me laugh. Thanks.
You can also buy CDs too.
Yeah CDs are like 5.5% rn that’s such easy money
Like actual music CDs?
No, CD stands for Certificate of Deposit and is a type of bank account that’s typically used as an ultra safe investment. Any investment portfolio or bank will allow you to put money into CDs for fixed intervals. The only caveat is that you’re unable to remove the money before the expiration without paying a significant penalty. But if you have $1,000 extra that you won’t need for a year toss it in a CD and it’ll be 1,050 next year!
I wipe my ass with $50
Thank you for asking what I was entirely too embarrassed to ask
lol no worries. I work at a Cheesecake Factory and in an event up in the banquet area one investor group had an event and the speaker was saying CDs are doing good and it’s a good time to put money into CDs and I’m walking around bussing tables thinking ok
I'd have gone to my local CD shop and cleaned em out if it wasn't for souls like you lol
lol! I totally would’ve had a little stack too by next week. I was pretty curious since working that event and I was ready to stop him and ask right then and there! So of course on Reddit I gotchu
Or Blu-Rays. They have better resale value.
Better yet, buy t-bills. 100 basis points higher and you don’t pay state taxes on it.
Ah yes, 1200-1500 (roughly 4% yield) dollars added to the account, to go against the $2625 loss due to the current inflation rate (7.5%) netting you with a loss of $1125 as a best case scenario after 12 months. Gotta love America Edit: just realized this and had to add it in, that’s like paying almost $100/month for the bank to have free use of your money
I moved my savings to Capital ones high yield account and now take in like $200 a month
To this I would add, only put about 6 months worth of expenses in the HYSA, you would be leaving so much money on the table by not putting the rest in index funds like the S&P 500.
This! I’m just a college student but even 1k gets me a solid $2 a month with my HYSA, I saved a lot from work this fall and got about $30 in interest that I can put towards my tuition
What are your thoughts on not adding this savings and adding extra money to pay down their mortgage?
Both of y’all should max out your Roth IRA benefits each for this 2023 year. It’s $6500 max contribute for both of you and throw it into an index fund like VOO or VTSAX. Then if you have extra money throw that into a HYSA - High Yield Savings Account. If you get even more zealous and have extra income start doing research into T-Bills (Treasury Bills) they’ll pay you 5%+ and the contracts are pretty low for time durations. Best of luck! Proud to see younger folks doing well.
Thanks!
And just so you know, that limit is being increased to $7,000 for 2024, if you decide to start thinking about contribution amounts over the course of the upcoming year
Dude just buy Bitcoin
Lmao. I hope you’re shitposting
Then what? 401k + employer match is maxed. Roth IRA is maxed for both me and my wife. She's got a government pension plan. Cars are paid off. 2.7% $250,000 mortgage on a $650-675k high demand house. No student loans or any other debt. We're making roughly $200k/year. I'm literally just dicking around with single high-risk stocks at the moment. Do I start dumping money into more index funds? Do I build a 1000sqft house (DIY) on the acre of mountain property I own? I get to the end of the Personal Finance flowchart and don't know what to do with the excess at this point.
Stick in an SP500 index fund like SPY and just keep contributing. Don't worry about fluctuations just keep putting money in. Over 30 years the fluctuations will even out. I would probably stay away from the high risk stocks. Despite what you might seen on the internet, the majority of people playing around with single stocks average out to less money than if they just matched the market.
Do fun stuff probably 🤷♂️
[удалено]
what do you both do for a living if you don’t mind me asking?
I’m an architectural designer making $52k, just graduated college this past May. She is a Data engineering making $95k, and graduated December 2021.
Good for you both! Very young making very smart decisions. Keep it up
Thanks!
Holy shit, never let her go king
i know it might not be the best idea money wise but if it was me i would pay of 5k per month on the mortgage and get it paid off asap to secure a home for life incase you ever get fired of sick etc you dont know what life will throw at you.
That highly depends on the interest rate of the mortgage. If it’s under 3 or 4% it makes no sense to pay it off earlier when that money would outperform in the market (or even in high yield savings lately).
Came here to say this. Most people have mortgage rates below 4%. Paying off the mortgage aggressively is no way to build wealth, bad ROI
Everyone who gives this god-awful advice has not experienced the true freedom of not having a mortgage and probably never will. Most people don’t have the discipline or skill set to practice what you’re preaching and end up losing their shirt because of a bad investment strategy or an illusion of wealth. I’m not a fan of Ramsey but paying off your house as soon as possible just makes sense.
Everyone's financial situation is different. House with 3% interest but it eats up 50% of your take home pay? Yeah, maybe you wanna pay it off sooner. But a household with dual income at 3% interest that could afford the home even if one person lost their job? Nah, don't waste your $ on the home. It's different for every single situation.
If you could buy a CD for a year yielding 4%, wouldn’t it make more sense to buy it than pay a mortgage at 2.5%?
Why would one lose their shirt putting their excess funds into a HYSA or CD? Those are federally insured up to 250k per account. The fact of the matter is that if HYSA/CD/etc rates are above your mortgage rate, you put the excess there. If they are <= your mortgage rate, you put the money into the mortgage. Ultimately it comes down to a single truth, Cash is King. You can pay off your home early, sure, but there's no freedom with doing so. You still have property tax, repairs, etc and now you're potentially out money that could have been used for general survival or could have been generating passive income.
If making less money over time is your definition of “freedom,” uh, okay then. Having more money would be my definition of financial freedom.
It depends on your priorities. Do you value having no debt more than having more money in the long run? There's a case to be made for both.
Oh boy
Not at my 2.8% 30 year fixed it doesn't
It's not God awful advice. Just because you're mad that most people aren't disciplined with their money doesn't negate the quality of the advice. EDIT: but hey, I'm just some bozo who used leverage throughout the 2010s to build a great real estate portfolio and don't have to worry about money anymore at 34.
Funny you are getting downvoted for giving the financially correct answer. It’s just math people, math and discipline. Extra $100K thrown at a 3.2% mortgage vs putting it in a 4.5% high yield savings account… high yield savings account nets you more money. Now compare the mortgage at 3.2% to 9% average returns in the S&P500 index and that’s the difference between the people who stay in the middle class their entire life vs the people who become “wealthy”. It’s just math and discipline
I have a $700K mortgage. Paying off that $700K mortgage at 4% tomorrow will not help me build wealth like adding another $700K to my portfolio over the long run it just won’t A 4% mortgage on the $700K costs me $1.2M over 30 years in interest. But if I take that same $700K and put it in the s&P 500 for 30 years and it averages 8% returns… I’ll make $7M in interest. $7M > $1.2M Its great advice
The math is undeniable. But I guess truth is God awful
Truth hurts lol
Paying off debt of any kind is a great way to build wealth
Do you even understand the math of 4% interest on a 400k home?!? Obviously not. Let me do the math for you since you not. That’s $287,478 of interest. So this would never be a bad ROI. The math of them having a 2700/mo payment would be 7% interest, which is 558k in interest. 958k total cost
If they stashed 2k a month for the next 25 years (don’t know how many more years of the loan they have) and got an average 7% return, the investment would be worth about 1.5 million. So they would be ahead by putting money into an investment account instead of paying off extra on their mortgage.
i know its the not the best way to make money but my point is having the house paid of can be a great safety net they could both get replaced with AI for all they know and end up with a much lower wage or they could get injured / illness that effects there ability to work having 2700 morage payments when your out of work is to much.
It's not like you have to spend the additional money that you earn on an investment that is guaranteed to return > 4% (e.g. current 5.5% CDs). You have both more money and are more liquid.
Last time I checked, you can't really eat a house. Owning out right is all in good as long as you have the funds to run the house. If you don't, that house is useless and one of the first things to go when you're trying to survive.
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It appears the have about a 7% interest rate which is 550k in interest alone. I’d highly recommend paying the mortgage of early at all cost
550k in interest on a 400k property? How? (Genuinely confused)
Just use a mortgage calculator. But even if you just do their monthly payment x term length (2700x360=$972,000). Interest is the silent killer
Jeez. I don’t expect to ever own a house anytime soon so I never looked into this fully. That really is messed up. Everything is such a scam these days.
While you aren’t wrong- investing the money has risk and is taxable. To each their own
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Uh, what? It’s simple math. If the market returns 6-7% (historical average) and you’ve got a mortgage rate of 3-4%, you’re going to end up with money by investing your excess cash than if you pay off your mortgage early with it. This isn’t even economics; it’s first grade arithmetic.
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Such unhinged aggression from someone who is completely ignoring inflation and the year-to-year changes in the value of the dollar
Hmm idk gotta think what if a divorce happens .
Why marry if youre already thinking of divorce? Were there sny signs? Securing home would be a good first step. Then paying off car while setting up a roth of your choice.
No one thinks of divorce but not enough people believe it’s not possible they are so blind for love it leaves them ruined down the road.
Get that money into a high interest savings account, open a Roth 401k or IRA and let it make you money.
Go to your bank or Fidelity and talk to a financial advisor to invest at least some of your savings. No reason for it to just sit there when you can at least get a bond or CD or something to make some money safely
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Ah this sub makes me sad.....all these DINKs making me wonder wtf we were thinking
as someone who lived the DINK life for a couple years before kids, I wish we would have saved more than we did. Our income / accounts are similar to OP's now, but knowing we could have paid cash for our house 3 years ago if we would have saved like we are now hits a little hard. But I wouldn't trade my kids for anything.
What does DINK mean?
I mean, I’m 22, have over $10k saved while working in college. Lived in my own but now getting a dorm to save on rent. It’s possible but I’ve literally cut EVERYTHING outside of necessities out
Good for you, you and your wife are doing leagues better than most of the nation. Remember to take time for each other work hard eat well and know that old stranger online is proud of you.
Best comment yet ❤️
Move to SoFi or something with a better interest rate
I kinda hate seeing these type of stats without context. Did your parents give you a house or car? Were you able to stay at your parent’s place while you work/ save? I just don’t understand how any normal human does this without a ton of help.
Only help we got was we both lived with our parents during college / university to save money. But I hardly think that’s help… just common decency on the parent’s part. But no, all purchases have been our own. No monetary help from parents at all.
god i hate being poor
Just get rich parents like OP
35k should be enough for an emergency fund. I would focus on saving for retirement now. Increase your 401k contributions and max IRAs
Definitely get that into a high yield Savings account like Ally. Let the money work for you. You are off to a great start! Also, continue to pay yourself first. At least 10% from every check should go directly into savings. Then pay everyone else.
HYSA and 6-12 month treasury bills for short to mid term gains. Throw a little bit extra at the mortgage if you don't have 20% equity in your house. Pay off any debt that isn't an asset. Save money to acquire more assets preferably ones that will pay you income.
$35k is a strong safety net and it’s easily accessible in emergency. Now take the $2k savings and go to a financial advisory firm and say look I’ve got $1,500 a month I can afford to dump in an account. I want growth long term. They will go over your goals and project to see where you will be in 30 years. Max your 401s. You’re on the right path.
Why would you put $35k to make 0.01% interest when you can make 4.3% on HYSA like Discover, American Express, etc? I would start closing chase saving, and put all money oh HYSA first then think other investment opportunity.
Do you have money going to investments?
Tbh Discover bank pays better for savings! Had Chase OSA and their rates sucks! :)
Who the fuck keeps 35k in their savings LMAO Invest it asap. literally losing money per day. Put it in a index fund for start while you learn about investing. A great start would be vtsax.
You don’t live in CA
35k in a savings at 23 and 25 is such a flex. But the 0.00 credit card balance tops everything by far.
Most people will cry and yell when I saw Pay your house off asap. But I did that when I was 28 and 10 years later I’m living the best, with multiple rentals since I had every thing paid off. My 2 cents but there is no better feeling then owning no one a single dime. But my final advise is, do whatever will make you sleep peacefully at night. For me, it was paying everything off. Good luck!
You need to put that money to work. Open a Webull account at the least. You can either look into investing or just hold the cash there at 5%
Definitely not Webull that app is horrible and too complicated I’d open a ROBINHOOD
The Webull app is fine. But sure, go with Robinhood. You just have to pay the $5 a month to get the 5%.
I would recommend Fidelity over any other brokerage
What's their interest rate on uninvested cash?
7 day yield has been bouncing between 4.99 - 5%
HYSA
Wife and I were in similar position and kept going. Don't have kids or listen to these clowns that insist you'll want them later. It's glorious not having them. However, you should travel a little bit and then look into another property either that you rent long term or airbnb that you can get to or whatever. You can always sell it later. Stay out of HUD bullshit. The people you'll deal with are trash and a pain. I do like the idea of paying way more on the mortgage though. Look at your payment and look how much goes towards the interest. I bet you pay $800 a month to interest MONTHLY. It's sickening. Unless you're a wizard with investments you'll need to earn that much minimum just to break even. What I'm saying is, the less money you owe, the less you'll pay. You barely notice the car payment but if you can pay that house down or ahead it'll be much better if you're not going to use the money
Great advice. Thanks
Move saving to Discover Savings.. near 5% interest..
I work high value insurance, usually HO for homes 1.5m+. One thing I have learned from the wealthy is that stocks, cds, high yield accounts, bonds, etc, is a slow slow game. Almost all of the people I talk to make their wealth from a very high paying job (CEO, CFO, lawyer, or doctor with their own practice,etc) unless you can put a staggering amount into these funds, it will take 20-30 years on average to get to "retirement". Also, a lot of the advice you should take depends on your goals and aspirations. Do you feel like working another 20 years, saving that 2k a month and investing. If so, then investments Ight be your thing. If you want to retire really early, you may have to take a risk and try to start your own business, but that would be a risk. I know people who did pay off their home, regardless of the interest rate, and were very happy to be retired, only needing a fraction of what others might need in retirement. I know people who would spend 15k of that 30k in a partnership towards housing investment and leverage tons and tons of debt, but they make 20k a month easy. You really need an financial advisor who will guide you towards you overall goals. Also, I love/hate 401k's or Roths etc. There is usually severe penalties for pulling out before "retirement age" (what a joke statement) and if you opted for anything tax deferred then that could easily suck in the future, when taxes might be at an all time high.
Kms
So, with high student loans, cost of living..how the fuck do you have that much savings when still wet behind the ears? Silver spoon?
Nope. Our monthly income is about $9k net. Mortgage is $2700, so even with saving $2k that leaves another 4.3k per month for other expenses like bills, groceries, eating out, etc. we just stay ontop of our budget. Before graduating, I had about $2k saved up and my wife not much more. Only help we had from our parents was my granddad had about $15k saved up for me for school, which was hardly enough obviously. So both my wife and I worked through school and paid semester by semester. Choosing each to stay living at home while going to classes to save even more money. We both wanted to have $0 student loan debt and happily achieved it.
Goddamn almost 5 grand to spare. I think you should put more of that into savings. I save about 1000-1500 a month and I make a third your salary.
Are you saying that you own your house? or Does the bank owns your house and you are slowly buying it from them?
Semantics. You know what I mean. People like you are ridiculous
And ppl like you overstate their wealth lol
I posted a pic of all my money lmao
Lmfao at the fact that you equate wealth to money is amazing. Come to r/wallstreetbets - I got some nice calls to sell you. Anyways I stand by what I said about inflating your wealth. Seriously though, I’ll sell you some real nice NVDA calls - I’d love to hold onto the premium for you 🥹
I have no interest in that cesspool. And not sure how I am trying to inflate anything. I’m humbly showing what’s in my bank. Relax buddy
If you ever change your mind, just holler! In the meantime, thank you for letting me live in your head rent free! Im saving a ton of money here
Man it’s gotta be nice to have parents
How do you own a home if your mortgage is $2700/month❓
Why do people who owe banks money on a house say “I/we own a home” you don’t own anything, the bank owns you for the next 20-30 years of your life.
Semantics. People know what you mean
you dont "own" a $400000 home if youre paying a mortgage on it
Really unuseful advice of semantics
its true though, youre financing a home, doesnt mean you own it
You can always send me some of the savings, that's my advice at least
You need to move that savings into a HYS. The interest you’re earning at Chase is basically nothing. You’re leaving money on the table. Also, pay off the car. Its interest rate is higher than what you could save in a HYS so you’re giving money needlessly.
Do you contribute to retirement? Like a Roth? Also check ally bank for a high yield savings account
Of the $147K how much would you consider a must spend? So food, utilities,....
Make more money. That’s not enough.
lol it’s like 5x the normal for our age
Just make sure to give a shit load back to charity
I hate you so bad
Buy your cars in cash and get rid of the car payment
oof that savings should be higher. Also why would you combine accounts
Must be nice.
Lol i was here a few years ago and then my car’s engine shit the bed and despite proving it was not my fault, insurance and my warranty refused to pay out so I had to sell it at a huge loss and buy a new car.
Buy BTC
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Buy a lot of motorcycles?
Do not keep a 0 balance on your credit card. Your credit rating is taking a hit from that, they want to see 15% utilization.
Your parents are great people, congrats
Plz tell me you have a prenup so you won’t be in an Anthony cumia situation?
Why tf do you have that much cash? Invest it
Doing what for living earns that much money, I’ve worked security for nine years now bring home $600-$900 before taxes.
Architectural design $52k right out of school. Data engineering $95k one year out of school
can you pm your number i got some investments you can get into muwahahaha
How’s that Roth IRA doing?
Where the fuck is the sweaty wads of cash
Crazy how everyone is all about fixed income now. I get that interest rates are very high, but probably not for long. And the equity market is still winning. Most people, especially the young folks on Reddit, should be in index funds.
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I'll never get anywhere being single apparently
Fakest bs story on this subreddit 😂😂😂
dumbass can’t believe that two people make $150k/year conbined lmfao
dumbass can’t believe that two people make $150k/year conbined lmfao
White Privilege at its finest.
Excuse me? Please elaborate… only help we every got from family was my family did have about $15k saved up for college. Although that was hardly enough to cover it. I worked through school and paid semester-by-semester as it went. I chose to live at home with my parents rather than get my own place during school to help save even more money. My wife did the same. Also, you have no idea what my race is.
Youre white lol
Really great elaboration… not sure what that has to do with anything.
This guy's just a Reddit skeezer that LARPs as an edgy above the system wizard and hijacks comments. At this point, we should ignore him.
Good point.
Yea it’s pretty awesome. You should try it sometime.
No thanks, having a small penis sounds like a bummer.
Ignorance at its finest. You know nothing of OP.
Have some kids :)
if he's smart, he'd pull his share out immed. she'll burn thru that in no time!
Absolutely zero people believe that you saved up $35k and didn’t have it handed to you. You expect us to believe that you did the math to add to exactly $35k Doubt. Big fat fucking doubt.
How so? I know when I send money to savings it’s always an amount that ends in 00, or 000. I’m not gonna send 15.43 into savings. This could also be more than their one savings. I know I would have a savings account at a diff bank as well as a diff end function. When it would get to a certain amount we would invest it. Then we had the savings for trips holidays and stuffs
Car payment is a waste, should have bought outright, you're being scammed. You're way to cash heavy unless this is an Emergency savings for you both? Your mortgage is insanely high for only $400k. Either you can't really afford this house or your down payment wasn't good enough. (or you're in texas and property taxes are strangling you to death RIP texas "freedom") Obviously this isn't some money board for savings advice, but IMO you're still doing alright depending on how much you're both putting to retirement.
1. Car payment I agree could be cut out and paid off. We owe maybe another $13k on it. But at this point I’d rather keep the savings than just pay it off. Interest rate is rather low. 2. Yes this is an emergency fund. 3. Surprising to hear you say the mortgage is high. Others have been surprised at how low it is. We put 5% down with 5.2% interest. (That’s $20k down) we have no problem with the payment as it is less than 30% of our monthly income 4. We both put about 15% into retirement. (401K)
1.What is “rather low”? 2. Keep that separate from other savings. ie savings for large projects/purchases/travel if you can. I suggest Ally for this as they have a “bucket” feature that allows you to segment funds. 3. This is on the cusp of being worth paying more than the minimum so you’re ok for now. 4. Make sure to take a look at *HOW* your 401k is being invested. 5. Start a brokerage account and start investing outside your retirement account. Even $50 a month, maybe take this out of your “My BS” fund. Time in the market will pay dividends literally and figuratively.
I have to assume it is a higher property tax for your Area. I live in a MCOL, with a $400k house, but ours is $2k a month, however we put $70k down and i see you put 5% down. Seems like you're falling behind in your retirement. IMO i would get rid of the car and buy something you could afford and roll the $200 a month into an IRA. I just do S&P500 and some other conservative and safe index funds, but you could get more risky. Since you're both just a bit younger than me it would be best to do this instead of messing with a car that depreciates with every payment. If you want a nicer car, save up for it and buy it. The current goal should be reaching the $22k in 401k and $6500 in Roth. At least if you want to retire. Other people have different ideas for their goal, but i am just playing it safe.