I’m not a finance expert but don’t you need something like $350000 in the bank to make $1500/mo in interest?

https://www.calculator.net/interest-calculator.html?cstartin...

Wouldn't most people with $350k and long investment horizon rather invest that in stocks? (actually asking, I have not idea, just a notion). $350k seems like a lot of money to leave in a money market account as opposed to in a diversified portfolio of stocks/bonds in a tax advantaged account. I'm thinking long term growth.

Inflation rates go up and down (i-bonds were not attractive until recently) and so do interest rates. The current 5% rate may not last for long.

If I got a $350K windfall right now I'd probably put about 70% of it into tbills (6 month to 1 year paying ~5.5% right now) and another 20% into 2 to 5 year treasury notes (paying ~4.7% right now) with the remainder going into an S&P 500 ETF like VOO. I'd DCA into stocks & etfs as the tbills matured. You're right, these 5% rates probably won't last long (though some pundits are saying we're going to be seeing 6+% due to high demand and stubborn inflation so who knows...) but a 5.5% yield on ultra safe treasuries is too hard to pass up right now plus there's no state tax on that interest.

Yep. In a CD or a money market account of some sort. 26 week to 1 year Treasury bills are paying around 5.5%.

Don’t be overwhelmed by this response. I recently learned that the 1000 bucks thing is mostly based on Bankrates annual survey and it’s not actually true that they don’t have access to 1k, so this is a little bit an exploration.

> American households, on average, have $41,600 in savings, according to data last collected by the Federal Reserve in 2019.

And that’s before the free money era and the explosion of wealth from rising interest rates. Of course it’s also true that inflation could be taking a bite out of household wealth.

https://time.com/personal-finance/article/average-american-s....

People may not have enough saved for retirement, but that’s a separate issue.

The surveys of people not having cash on hand to handle a 1000 emergency or whatnot? That really has to do with your phase of life and economic conditions, and interestingly has been a relatively stable number even as inflation has increased.

It’s also really important to understand that they are based on unverified phone surveys about how people feel they are doing. Consider that they are asking people whether they could cover a one time expense, a month of expenses or three months of expenses. But they don’t ask whether people have access to money. The survey reports that “More than 2 in 3 Americans *would be worried* about having enough emergency savings to cover a month’s worth of living expenses,” so something to bear in mind.

https://www.bankrate.com/banking/savings/emergency-savings-r...

>> American households, on average, have $41,600 in savings, according to data last collected by the Federal Reserve in 2019.

Average vs Median strikes again.

Median household has 4k. 70% don't break 10k.

It's the high end that weighs on that average pretty hard.

Not my intention. That’s why I provided the sources.

The data in the last link really is worth checking out. I don’t disagree with you, but the numbers I’ve seen numbers are off quite a bit from what you’re quoting.

Source?

Age Group Mean Net Worth Median Net Worth

Less than 35 $76,300 $13,900

35-44 $436,200 $91,300

45-54 $833,200 $168,600

55-64 $1,175,900 $212,500

65-74 $1,217,700 $266,400

75 or more $977,600 $254,800

https://www.firstrepublic.com/insights-education/average-ame...