Author Topic: Help! I'm Lost In Financial Freedom!  (Read 2489 times)

Launch83

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Help! I'm Lost In Financial Freedom!
« on: June 07, 2021, 02:01:18 PM »
Hey Everyone!

I've followed MMM for years and I'm extremely thankful for the tips, advice and general awesomeness but I've found myself stuck at a crossroads and I REALLY don't want to screw anything up!

At 37 I'm proud to say that I'm married to a wonderful woman and we have two great little boys (4yrs and 7 months). Through hard work, commonsense, a little bit of intelligence and a handful of luck we are living debt free. We own our home and cars with no loans or mortgages and have no credit credit card debt. My wife and I both work and have a take home monthly income of about $8,000 and have saved around $300,000 in our savings account.

The problem is I've fumbled my way through until this point and I just don't know what to do from here to take this hard work and secure our long time financial freedom and retirement. I'm honestly scared to make any big moves with this money because I just don't feel I have the knowledge to make such a gamble.

So I'm turning to this wonderful group in hopes that people smarter than I am could chime in with some advise on what they would do if they were me?

I really look forward to hearing every ones feedback!


Thanks,

Chris

ixtap

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Re: Help! I'm Lost In Financial Freedom!
« Reply #1 on: June 07, 2021, 02:06:38 PM »
While I like the community here best, bogleheads.org has excellent wiki articles for people interested in investing. Especially for those interested in simple, low cost options.

You mention a savings account, but where do your tax sheltered accounts stand? Are you contributing to retirement accounts? HSA?


MrThatsDifferent

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Re: Help! I'm Lost In Financial Freedom!
« Reply #2 on: June 07, 2021, 02:12:28 PM »
Ok so you followed everything but the use money to make money advice? Follow the investment order, invest in index funds, simplify everything and relax. The money will grow and grow. Read more of MMMís articles and JL Collins. Stop living in fear.

Sandi_k

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MDM

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Re: Help! I'm Lost In Financial Freedom!
« Reply #4 on: June 07, 2021, 04:51:50 PM »
In addition to Sandi_k's link, see (if you haven't already):
Getting started - Bogleheads
Asset allocation
Investment Order and Prioritizing investments.
After digesting those - what questions remain, and what new ones do you have? :)

yachi

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Re: Help! I'm Lost In Financial Freedom!
« Reply #5 on: June 08, 2021, 08:47:43 AM »
Here's some shocking math:
The highest interest rate savings accounts I can find are currently paying 0.5% APY, and the fed is targeting 2% inflation.

At these numbers the $300k you have in savings is losing $4,500 a year in buying power.  It's losing $12 per day every day because it's not working hard enough for you.  You accumulated all these savings by refusing to spend crazy money on things for yourself, you should expect your money to work just as hard as you do.

Launch83

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Re: Help! I'm Lost In Financial Freedom!
« Reply #6 on: June 08, 2021, 12:13:30 PM »
Thank you so much for everyone initial input.

I've started reading through the links provided and taking notes as needed. My general feeling is that I should consider using Betterment to facilitate my investments needs as I'm not a savvy as most of the members of this forum. I know this is a service recommended by MMM for it's simplicity and based on his study over 7 years it appears to work. Does anyone else have any experience with the Betterment Service?

I was also trying to figure my distribution / risk level. At almost 38 I would like to be in a position to retire by 45 so I feel this will require an aggressive approach to invest more heavily in Stocks versus bonds.

Also you're right @yachi the basic math as I've been sitting down looking at all this and realizing how much money I have been losing by not putting my money to work is really disappointing.

Scandium

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Re: Help! I'm Lost In Financial Freedom!
« Reply #7 on: June 08, 2021, 12:35:20 PM »
Thank you so much for everyone initial input.

I've started reading through the links provided and taking notes as needed. My general feeling is that I should consider using Betterment to facilitate my investments needs as I'm not a savvy as most of the members of this forum. I know this is a service recommended by MMM for it's simplicity and based on his study over 7 years it appears to work. Does anyone else have any experience with the Betterment Service?

Betterment is promoted by bloggers because it's a VC funded startup that shovel money at marketing, loosing money to build scale and (maybe?) eventually make money. (which of course never leads to shady business practices.../s). They take advantage of fear to hire them as a middleman to do some pretty minimal work of investing in index funds for you. As in literally put your money in 3 vanguard funds.. More importantly you trap your money with them due to taxes, and if you want to switch, or they raise their prices when the VC want profits you're stuck.

No, they're not the worst out there, but I'm not a fan. I'd rather pay for a vanguard advisor (which I think you'd get for free with your account balance with them?), or a fee-only advisor. Or just take a couple afternoon and do some research, then do something like put 50-50 in vanguard US/international funds. The idea that one has to be "savy", or have some arcane knowledge to invest your money is nonsense, and just excuse for a bunch or rent-seekers to take advantage of people. Especially these days when there are index funds available almost everywhere. I'd bet that if you just pick the lowest fee fund in any given place you'll do better than most advisors!

Regardless, sounds like you have decent income, and no mention of it, so you should first focus on maxing your 401k or IRA options to save thousands on taxes.

edit: yes I'm aware of tax loss harvesting. Still don't think it's worth it.
« Last Edit: June 08, 2021, 01:04:31 PM by Scandium »

brandon1827

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Re: Help! I'm Lost In Financial Freedom!
« Reply #8 on: June 08, 2021, 12:42:27 PM »
I cannot recommend Vanguard highly enough. I did some basic reading and ended up going with a self-directed brokerage. I put a chunk of money in VTSAX (S&P 500 Index Fund) and VTHRX (2030 Target Date Index Fund) and have just sat back and watched it grow ever since. Investing doesn't have to be hard, and there's no reason for someone as financially savvy as you are to feel like you need to pay someone else to manage your money for you.

Launch83

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Re: Help! I'm Lost In Financial Freedom!
« Reply #9 on: June 08, 2021, 12:54:42 PM »
@Scandium Thanks for the feedback and thoughts on Betterment.

You mentioned 401K & IRA and I know is this an area that I'm missing out on. I've owned my own business for the last 13 years and I don't have either of those options. Only ever focused on saving and frugal living. People have told me that I should have a Roth IRA but again pleading ignorance, fear and laziness I've never done it and don't know the best move to make to make to maximize on the investment and the TAX savings.


use2betrix

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Re: Help! I'm Lost In Financial Freedom!
« Reply #10 on: June 08, 2021, 02:13:18 PM »
Maybe Iím dumb/naive, but investing can actually be really, really simple..

I dump nearly all my money (close to $1MM) simply into VTSAXÖ I do have retirement accounts that are largely target retirement funds (around 25% of NW) then a small chunk of 5% or so in miscellaneous stocks/index funds (company I used to work for, mid cap, etc.)

You can get really complex, or you can just follow the KISS (keep it simple, stupid) method.

For years, outside retirement funds, 100% of my automatic investing has been straight into VTSAX.

I keep a very large emergency fund (approx 2 years emergency spendings) and that offsets not having much for bonds and also due to the volatility of my job. This is about 10% of my NW.

TomTX

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Re: Help! I'm Lost In Financial Freedom!
« Reply #11 on: June 08, 2021, 02:21:31 PM »
@Scandium Thanks for the feedback and thoughts on Betterment.

You mentioned 401K & IRA and I know is this an area that I'm missing out on. I've owned my own business for the last 13 years and I don't have either of those options.

You can fix that pretty easily.

https://investor.vanguard.com/ira/how-to-open-an-ira

For the 401k, if you and/or your spouse are the only employees, you can open a solo/individual 401k

https://investor.vanguard.com/small-business-retirement-plans/individual-solo-401k

If you do have employees, there are other options:

https://investor.vanguard.com/small-business-retirement-plans/self-employed

MrThatsDifferent

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Re: Help! I'm Lost In Financial Freedom!
« Reply #12 on: June 08, 2021, 02:32:06 PM »
Maybe Iím dumb/naive, but investing can actually be really, really simple..

I dump nearly all my money (close to $1MM) simply into VTSAXÖ I do have retirement accounts that are largely target retirement funds (around 25% of NW) then a small chunk of 5% or so in miscellaneous stocks/index funds (company I used to work for, mid cap, etc.)

You can get really complex, or you can just follow the KISS (keep it simple, stupid) method.

For years, outside retirement funds, 100% of my automatic investing has been straight into VTSAX.

I keep a very large emergency fund (approx 2 years emergency spendings) and that offsets not having much for bonds and also due to the volatility of my job. This is about 10% of my NW.

Canít recommend this highly enough. You donít need Betterment. Go to vanguard, call them and aim for one product or their Lifestrategy options. If youíre in the US VTSAX is the way to go for ease and simplicity. Once you do the research, itís very easy. Iím definitely not smart like a lot of people here so I used the simple strategy and itís served me so much better than my previous strategy, which was no strategy.

Scandium

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Re: Help! I'm Lost In Financial Freedom!
« Reply #13 on: June 08, 2021, 02:39:11 PM »
Even if you want a robo advisor (like Betterment) you can just do that at Vanguard now. I didn't know they offered this!
https://investor.vanguard.com/advice/digital-advisor/
The fee is listed as at most 0.20%, including all fund fees

Or a personal advisor is only 0.30%
https://investor.vanguard.com/advice/financial-advisor/

yachi

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Re: Help! I'm Lost In Financial Freedom!
« Reply #14 on: June 08, 2021, 02:40:19 PM »
I had something similar to what TomTX wrote, except I was going to add once you put your money in there, invest it in their "Total Stock Market Index Fund".  I came back to add that and it turns out MrThatsDifferent already suggested that.  VTSAX is the "Total Stock Market Index Fund".


Good for you asking what's next.  There was a thread around here where Mustachians added up their net worth, and compared it to lifetime earnings.  Many had 1x to 2x their lifetime earnings.  The way to get there is market returns.

simonsez

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Re: Help! I'm Lost In Financial Freedom!
« Reply #15 on: June 08, 2021, 02:57:18 PM »
For services that you pay someone/thing/entity to invest on your behalf, it costs money.  If you've read the links (especially Collins' Stock Series) and are interested in the passive approach via index funds, just do it yourself.  It's not hard.  It's in the financial interest of these companies for you to think investing is alienating and complicated to do it yourself.  It's your choice if that type of service (e.g. Betterment) is for you.

Vanguard is just one of many platforms for those that invest themselves.  Here is a vid comparing Vanguard vs. Fidelity vs. Schwab from Jake Broe.
https://www.youtube.com/watch?v=rAewPVEjeLM

I, and many others, personally use Vanguard but don't want it to seem like it's your only option.  I think oftentimes those looking to dip a toe (or to go deeper) get hung up on making the perfect choice.  Don't let perfect be the enemy of good.  Many paths you can take will lead you to accomplishing your financial goals but personal finance is very personal which is why there is no one-size-fits-all. 

A common way many people invest is to adhere to the parameters of an investor policy statement (IPS).  This IPS can be as formal or informal or as simple or complicated as you like.  It's similar to budgeting, it is a tool and not for everyone.  I don't formally budget but I do have an IPS.  It helps me stick to my guns over time as it's common for accounts that aren't messed with tend to be among the highest performing.  Taken to an extreme, you can find all kinds of anecdotes and data that accounts of the deceased do the best.  Make a plan and execute it.

-Fellow idiot who does it themselves

TomTX

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Re: Help! I'm Lost In Financial Freedom!
« Reply #16 on: June 08, 2021, 03:08:18 PM »
I had something similar to what TomTX wrote, except I was going to add once you put your money in there, invest it in their "Total Stock Market Index Fund".  I came back to add that and it turns out MrThatsDifferent already suggested that.  VTSAX is the "Total Stock Market Index Fund".

Yes.  An IRA or 401k is a tax-advantaged container you put money in. You still need to choose what investment that money buys.

I was a big fan of VTSAX, but a few years ago swapped over to VSGX and ESGV.


MDM

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Re: Help! I'm Lost In Financial Freedom!
« Reply #17 on: June 08, 2021, 03:37:56 PM »
You mentioned 401K & IRA and I know is this an area that I'm missing out on. I've owned my own business for the last 13 years and I don't have either of those options.
For the IRA, Fidelity, Schwab, and Vanguard are the "usual suspects."

For a 401k, see Solo 401(k) plan - Bogleheads and some of the links therein for more options.  How does that look to you?

Launch83

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Re: Help! I'm Lost In Financial Freedom!
« Reply #18 on: June 09, 2021, 07:04:23 AM »
Maybe Iím dumb/naive, but investing can actually be really, really simple..

I dump nearly all my money (close to $1MM) simply into VTSAXÖ I do have retirement accounts that are largely target retirement funds (around 25% of NW) then a small chunk of 5% or so in miscellaneous stocks/index funds (company I used to work for, mid cap, etc.)

You can get really complex, or you can just follow the KISS (keep it simple, stupid) method.

For years, outside retirement funds, 100% of my automatic investing has been straight into VTSAX.

I keep a very large emergency fund (approx 2 years emergency spendings) and that offsets not having much for bonds and also due to the volatility of my job. This is about 10% of my NW.

@use2betrix Just so I'm following things correctly your investments break down like this:

25% - Retirement Accounts (401K/IRA)
5% - In Stocks From Old Companies You Worked For
10% - Cash Emergency Fund. Where Do You Keep This?
60% - VTSAX. Do You Actually Use Vanguard Directly For This?

Launch83

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Re: Help! I'm Lost In Financial Freedom!
« Reply #19 on: June 09, 2021, 07:25:30 AM »
With regards to retirement accounts I've been looking through the information on the Vanguard website and I appears that since I own my own business and have employees my only options would be SEP-IRA or SIMPLE IRA.

Having to choose between the two the SIMPLE IRA would be the way to go since I can personally contribute along with having my business contribute. Am I understanding that correctly and would that be the smart move?

People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.

simonsez

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Re: Help! I'm Lost In Financial Freedom!
« Reply #20 on: June 09, 2021, 08:11:48 AM »
People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.
With take home pay around 100k per year for you and your wife, my guess is that you would have no issues setting up and contributing to a Roth IRA since the income limits for joint filers are 198k with full phaseout at 208k.  A Roth IRA is an individual account that is not directly tethered to employment, it's separate and independent of other retirement accounts.  You could have one and your wife could have one to be putting 12k away (6k each based on 2021 limits) every year in addition to your prospective SIMPLE IRA. 

Launch83

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Re: Help! I'm Lost In Financial Freedom!
« Reply #21 on: June 09, 2021, 08:39:57 AM »
People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.
With take home pay around 100k per year for you and your wife, my guess is that you would have no issues setting up and contributing to a Roth IRA since the income limits for joint filers are 198k with full phaseout at 208k.  A Roth IRA is an individual account that is not directly tethered to employment, it's separate and independent of other retirement accounts.  You could have one and your wife could have one to be putting 12k away (6k each based on 2021 limits) every year in addition to your prospective SIMPLE IRA.

Thanks for clarifying that for me. My only other obvious question would be is it worth while doing a Roth IRA along with the SIMPLE IRA or just stick with the SIMPLE IRA and then just focus all other funds in Vanguard Index?

wenchsenior

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Re: Help! I'm Lost In Financial Freedom!
« Reply #22 on: June 09, 2021, 08:40:32 AM »
With regards to retirement accounts I've been looking through the information on the Vanguard website and I appears that since I own my own business and have employees my only options would be SEP-IRA or SIMPLE IRA.

Having to choose between the two the SIMPLE IRA would be the way to go since I can personally contribute along with having my business contribute. Am I understanding that correctly and would that be the smart move?

People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.

This is highly dependent on whether you think your taxable income will be lower in retirement than it is while you are working. It is true for most people, but not all people.  We are in a tricky middle ground b/c we started saving so late in life that we really wanted to max the up front amount we could pour into savings (and tax sheltering income up front gave us more cash available to invest each year). So we exclusively contributed to 401Ks and regular IRAs for the first 15 years we saved. 

Then a few years ago it started to become clear that 1) tax rates are INSANELY low right now in the U.S., compared with historical average...and it seems a big gamble to assume they will remain so low for the rest of our lives; 2) we live in a no-income-tax state and hope/plan not to live in this state in retirement, which will increase our taxes in retirement; and 3) our taxable income in retirement is looking bigger and bigger every day, and is potentially going to be as high as or higher than our current taxable working income of about 100K/year (this is partly due to a pension being involved, which will be taxable under almost all state laws and federal tax law as well).  Therefore, we have switched over to both contributing to  Roth IRAs and Roth 401Ks, and will also begin rolling over a bunch of pretax 401K money into Roth IRAs starting at the end of this year, thus hugely increasing our tax bill for the next 5 years (it's going to ~triple) in order to have tax free money to access in retirement.

So this decision about what vehicles to choose can change over time.   
« Last Edit: June 09, 2021, 10:15:22 AM by wenchsenior »

yachi

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Re: Help! I'm Lost In Financial Freedom!
« Reply #23 on: June 09, 2021, 08:55:28 AM »
With regards to retirement accounts I've been looking through the information on the Vanguard website and I appears that since I own my own business and have employees my only options would be SEP-IRA or SIMPLE IRA.

Having to choose between the two the SIMPLE IRA would be the way to go since I can personally contribute along with having my business contribute. Am I understanding that correctly and would that be the smart move?

People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.

You can definitely start a 401(k) plan for your employees.

Vanguard 401(k)

Fidelity 401(k)

Betterment 401(k)

ChpBstrd

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Re: Help! I'm Lost In Financial Freedom!
« Reply #24 on: June 09, 2021, 09:34:55 AM »
I'm honestly scared to make any big moves with this money because I just don't feel I have the knowledge to make such a gamble.

Everyone so far has had good specific advice. But without the knowledge component, it will feel like gambling. If it feels like gambling, you'll sell when assets go down and buy as they're going up, have the wrong asset allocation, etc.

I don't see that anyone else has posted this, so here's the Investing 101 intro course:

https://jlcollinsnh.com/stock-series/

You're smart enough to amass 300k so you're smart enough to figure out an investment strategy. Just take the time to get educated now and it'll pay off from now on.

Sandi_k

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Re: Help! I'm Lost In Financial Freedom!
« Reply #25 on: June 09, 2021, 09:49:17 AM »
People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.
With take home pay around 100k per year for you and your wife, my guess is that you would have no issues setting up and contributing to a Roth IRA since the income limits for joint filers are 198k with full phaseout at 208k.  A Roth IRA is an individual account that is not directly tethered to employment, it's separate and independent of other retirement accounts.  You could have one and your wife could have one to be putting 12k away (6k each based on 2021 limits) every year in addition to your prospective SIMPLE IRA.

Thanks for clarifying that for me. My only other obvious question would be is it worth while doing a Roth IRA along with the SIMPLE IRA or just stick with the SIMPLE IRA and then just focus all other funds in Vanguard Index?

The SIMPLE IRA and Roth IRA are simply envelopes. In those envelopes, you amass funds: cash, stocks, bonds or mutual funds.

So if you have a Roth IRA, that envelope can have 80% Vanguard Index fund, such as VTSAX, and 20% cash, for example. And the SIMPLE IRA envelope could have 50% bond mutual funds and 50% individual stocks.

Each envelope can have its own mix; they do not have to be congruent. And you can hold Index funds in a pre-tax (like a SIMPLE IRA), tax exempt (like Roth) or taxable account (such as a regular, non-retirement brokerage account).

simonsez

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Re: Help! I'm Lost In Financial Freedom!
« Reply #26 on: June 09, 2021, 11:35:24 AM »
People have always told me a Roth IRA is the way to go because you pay the TAXES on the way in instead of when you collect on the end but a ROTH IRA doesn't appear to be an option.
With take home pay around 100k per year for you and your wife, my guess is that you would have no issues setting up and contributing to a Roth IRA since the income limits for joint filers are 198k with full phaseout at 208k.  A Roth IRA is an individual account that is not directly tethered to employment, it's separate and independent of other retirement accounts.  You could have one and your wife could have one to be putting 12k away (6k each based on 2021 limits) every year in addition to your prospective SIMPLE IRA.

Thanks for clarifying that for me. My only other obvious question would be is it worth while doing a Roth IRA along with the SIMPLE IRA or just stick with the SIMPLE IRA and then just focus all other funds in Vanguard Index?
If you can do both, do both.  You only get so much space in these advantageous accounts per tax year so I like the idea of filling the ones with a limit up as much as you can before getting to taxable (which has no limit and is not as advantageous mathematically in most situations).  The investment order post outlines this in greater detail.

use2betrix

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Re: Help! I'm Lost In Financial Freedom!
« Reply #27 on: June 10, 2021, 03:52:00 PM »
Maybe Iím dumb/naive, but investing can actually be really, really simple..

I dump nearly all my money (close to $1MM) simply into VTSAXÖ I do have retirement accounts that are largely target retirement funds (around 25% of NW) then a small chunk of 5% or so in miscellaneous stocks/index funds (company I used to work for, mid cap, etc.)

You can get really complex, or you can just follow the KISS (keep it simple, stupid) method.

For years, outside retirement funds, 100% of my automatic investing has been straight into VTSAX.

I keep a very large emergency fund (approx 2 years emergency spendings) and that offsets not having much for bonds and also due to the volatility of my job. This is about 10% of my NW.

@use2betrix Just so I'm following things correctly your investments break down like this:

25% - Retirement Accounts (401K/IRA)
5% - In Stocks From Old Companies You Worked For
10% - Cash Emergency Fund. Where Do You Keep This?
60% - VTSAX. Do You Actually Use Vanguard Directly For This?

@Launch83  You piqued my interest a bit more to do some actual sorting.. Hereís where Iím at, rounded a little for simplicity)

35% 401k - Target retirement 2050 (in companies old investment firm, need to roll over to vanguard, but not a priority
3% HSA - VTSAX
47% post tax VTSAX (this is directly in Vanguard)
2% - old company stock that I bought at a big dip last year and will likely sell this year
3% - taxable mid-cap funds
10% - ďcashĒ - this is split between a few different checking/savings accounts

Itís not super fancy. I realized I actually have more target retirement fund than I expected, but thatís fine. Gives a bit less volatility compared to all my VTSAX.

I could probably really things in and do a little better but iím fine with how everything is. Doesnít have to be pretty or ďperfectĒ just donít take major risks and save save save/invest invest invest!


Launch83

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Re: Help! I'm Lost In Financial Freedom!
« Reply #28 on: June 13, 2021, 07:20:45 AM »
Again I'd like to thank everyone for all the great feedback so far. I think I've decided to run my investments directly through Vanguard considering the input for the members of this forum along with some added online research, why buy a Vanguard Product through a 3rd Party when I can buy it straight through Vanguard! I've not decided on which typical of account yet (DIY, Robo or Managed) but I do have a complimentary call scheduled with one of their advisors next weeks to discuss all the options so I can hopefully decided on which one fits my needs.

I was also wondering as I try and tidy up all my loose ends / mismanaged money. With regards to a cash account / emergency fund I know the interests for savings account a pretty dismal but it looks like Ally offers a consistent and competitive saving account. Currently offering 0.50% (APY) does anyone here use them and have feedback and what is the general thoughts on using a savings account for this? or is there a better option to keep my money working?

Thanks,

Chris.

Dicey

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Re: Help! I'm Lost In Financial Freedom!
« Reply #29 on: June 13, 2021, 07:58:44 AM »
PTF so I can follow some of those links later. Thanks!

wenchsenior

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Re: Help! I'm Lost In Financial Freedom!
« Reply #30 on: June 13, 2021, 09:44:33 AM »


I was also wondering as I try and tidy up all my loose ends / mismanaged money. With regards to a cash account / emergency fund I know the interests for savings account a pretty dismal but it looks like Ally offers a consistent and competitive saving account. Currently offering 0.50% (APY) does anyone here use them and have feedback and what is the general thoughts on using a savings account for this? or is there a better option to keep my money working?

Thanks,

Chris.

I've used Ally in the past for cd ladders and savings accounts back when I didn't have a Vanguard account,  our cash flow was very tight, we had a lot of unavoidable debt due to needing to purchase a second house and car, our emergency fund/slush fund was small (less than 50K), and I could not under any circumstances afford to lose principle.  That lasted about 5 years, and they (Ally) were totally fine, BUT with the caveat that I never needed to do any customer interface with them b/c my needs were very simple. So I don't know how their customer service is.

However, as soon as our cash flow situation loosened up and we had a sizeable chunk of cash, I opened a brokerage account at Vanguard (I had already set up IRAs/Roth IRAs with them), closed the Ally account, and put all that money in a regular brokerage account, but with a more conservative mix than our very aggressive retirement accounts (so while we've lost principle during drops, we don't lose enough to cause me concern). The money is still there and growing robustly, though less robustly than our retirement accounts.

Personally, I would only use savings accounts or cds if I had absolutely zero wiggle room for error or loss of principle (as in situation noted above, or if my income was extremely tenuous), or if the savings need was very short term. For example, we save about 12-15K/year ongoing in our credit union savings (interest is teeny), which we use to pay property taxes and income taxes and use as emergency funds to aid our poor parents and their ongoing but stochastic financial problems.  We usually are dipping into that every 3-6 months, so it seems like too much of a pain in the ass to open a separate account (#lazy).

Beyond special circumstances like those described above, I want my money working for me, not sitting around just barely keeping up with inflation, so into a investment account it all goes.  I also have extremely high risk tolerance and nerves of steel when it comes to investing.  I laughed at the general panic during the 2008 and 2020 market crashes and tried to free up as much cash to pour into the market during those crashes as possible.  I would NEVER panic and pull my money out during downturn unless I had absolutely no possible choice and needed it to feed myself and keep a roof over my head.  YMMV.
« Last Edit: June 13, 2021, 09:47:06 AM by wenchsenior »

ryan_themoneyguy

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Re: Help! I'm Lost In Financial Freedom!
« Reply #31 on: July 18, 2021, 04:29:46 AM »
When you say you have $300,000 in your savings account, I hope that's a high-yield savings account. If not, put some money that you won't need anytime soon in a high-yield savings account or CD to earn more interest than you are now. Also consider investing some of that savings into an IRA or other investment vehicle with Vanguard, Schwab, etc. Now's a good time to make sure you and your wife are maxing out your 401(k) contributions and taking advantage of your company match if applicable. Good luck!

ender

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Re: Help! I'm Lost In Financial Freedom!
« Reply #32 on: July 18, 2021, 06:11:08 AM »
What retirement accounts do you have? Are you contributing?