That's not great, but overall, I'm not making very much money from my "high-interest savings account". Maybe a grand or two over decades, but even that's generous. I don't know if it's worthy of an exclamation mark. The biggest losses are prevented by not overspending and some of the other things you mentioned.
"Personal-finance gurus obsess over buying coffee not because it is unsustainable, Vanderkam suggests, but because being a personal-finance guru is. “The strongest finance advice can be summed up in a couple sentences,” she explains. Maximize your income. Limit your big monthly expenses. But if your job depends on doling out financial wisdom, Vanderkam notes, “you have all this real estate you have to fill on your blog, your podcast, and your books. That’s where all this little stuff winds up coming in, but in the larger scheme, it’s kind of irrelevant.”
I think it's why a lot of people end up switching to giving talks or some other repeatable income stream.
Once you've written a blog post, that info is out there.
But if you can make it an "event", you can give the same advice over and over again.
In the past couple of years I’ve made $2-3k in interest. Not much but it’s $2-3k I wouldn’t of had if sat in a checking account so to me it’s free money for holding the exact same savings just under a different account with my bank.
All that says is that you barely have any balance in the account. Maybe a couple grand.
Huh? Either you have very little savings for someone on this site, or your "high-interest" account isn't high-interest. Ally Bank currently has 1.6% interest on their savings account, so you'd make $1000 in interest in 1 year with a balance of about $62k. If your savings account doesn't have at least 1.5% interest, then why do you have it? There's lots of places with rates of 1.5-2%.
Either it's some sort of 6-month emergency fund and CDs typically make more sense (ladder or not) or it's money you want to grow, in which case investing in index funds is the better approach.
You're not paying attention. The OP said it would take decades to make $1k or $2k; I pointed out it doesn't take that much money to make that in only 1 year. It's not that unusual to have $30k in savings, so that's roughly $1k in interest in 2 years, which is an order of magnitude lower than what the OP was claiming.
High interest checking accounts: https://www.doctorofcredit.com/high-interest-savings-to-get/... Automation for meeting minimum spend requirements: https://github.com/jakehilborn/debbit
I clicked through a few of those offers. Each one has a balance limit (after which interest drops to near zero), monthly fees, sign-up fees, or requires you to generate banking fees through another service.
And how could they not? Finance isn't magic, and we are in a world of all-time low rates. There is no possible way these companies can be paying you 5% on cash without making it up elsewhere.
You'll never net more than $1000/year in one of these accounts given they have balance limits. Some folks sign up for multiple high interest checking accounts in order to park more money.
Anyway, 1.6% is going away given the Federal Reserve just cut rates by 50 bps yesterday. Expect an email from Ally soon.
Are those retirement accounts or taxable brokerage. Because for many people, maxing out their IRA, 401K, and HSA is like 35K a year alone, and putting money into taxable brokerage should take a backseat unless 1) you like the gambling for its entertainment factor 2) you choose to keep your short term savings / emergency cash in the market (*I much prefer a combination of 6 months savings invested a little riskier than it should be + a large line of credit. Then you have the choice of selling stock or borrowing at 10% APR, for something you can hopefully pay off very very soon. A 15K LOC at a credit union is a godsend.) But other than my asterisk, taxable investments are usually an inefficient use of funds. 401K match and HSA are top priorities.
Your probability of having a healthcare expense does not change based on the type of insurance you choose (high or low deductible). Only the timing of the cash flow. But the government gives tax advantages for using an HSA. It's an IRA with the ability to withdraw penalty free any amount you used for healthcare anytime you were covered under an HDHP.
Best case scenario, spend all your health care with cash. Let the HSA grow as long as you can. Reimburse yourself for a decades worth of health care spending when you need the cash.
Any medical expenses you incur while you have a qualifying high deductible health plan (HDHP) can be expensed anytime in the future from your HSA. What I do is invest all of the HSA funds, and pay for all of the medical expenses with after tax money. I pdf all of the receipts for the medical expenses, and now, if ever in the future I need cash, I can withdraw it from the HSA penalty free since I have proof of the medical expenses. If you don't end up having medical expenses (good luck), and you turn 65, then you can withdraw and pay regular income tax like an IRA/401k (if you need the cash, you should of course use up your IRA/401k first).
I don't even understand how the government plans to prevent fraud if people decide to claim the same health expense multiple times, as you only have to keep tax records for a few years, and the law as it currently is lets you deduct health expenses from anytime in the past at any point in the future.
You can spend out of a brokerage account as if its a savings account. Sell your stocks, and youll have cash.
r/fatfire - same thing as above but for people looking to have more than "just enough" to retire (multimillion, mostly full of high earners like SWE's, agents or successful entrepreneurs where this goal is somewhat realistic).
r/personalfinance & r/ukpersonalfinance - well rounded finance forum.
r/frugal - okayish for if you are in a really tough spot. If you are doing ok I generally don't recommend them because ultimately you are trading your time/health using most of the hacks from here.
Go out into the late evenings, drink excessively, do designer drugs, party it up, all while mixing locker-room talk and investing strategies.
It seems not many people are taught about money properly. I certainly wasn’t and non of my friends where.
I’ve always been good in that I never spent what I didn’t have and lived within my means. What savings I did have where in a zero interest current account though!
Following the finance Reddit’s at least put me in the right path. 6-12 months cash savings now in a high interest account, now have a pension plan, putting money in to ETF’s until I have enough in the ETF’s I’m willing to by some individual stocks which may not be as stable as the ETFs I have.
As someone who’s been a senior dev for 10+ years doing well but stuck in a rut I’m also finding the various cscareers Reddit’s useful about the job market. Seeing people’s salaries, negotiations, what jobs to look for, what companies to look for etc etc.