5 ms·

I found it useful. If you don't have any loans, make a lot a money, have no kids or expensive hobbies, and you already are maxing out your 401K, it just sorta p

I found it useful. If you don't have any loans, make a lot a money, have no kids or expensive hobbies, and you already are maxing out your 401K, it just sorta piles up over the years. It's nice to read something like this once and a while since I don't have anyone to ask. Like should I move it from my credit union to my investment account. Is there a difference in insurance between the two?

slg 4y ago
You should do some more research than simply reading whatever is posted on HN or just get a financial advisor because this is a failure in financial planning that is causing you to miss a lot of potential growth. No individual who would miss $250k should have that much sitting as cash in a bank account unless they are planning to buy a house or other large purchase in the next couple of months. That money should be invested somewhere even if it is just all in short term CDs or bonds if you are an extremely risk-averse person.
- ChancyChance 4y ago
  You're probably right.
- massysett 4y ago
  It's not exactly "a lot" of potential growth. Yields on short-term investments have been so close to zero over the past several years that I'd argue it has not been worth the trouble to put the money into CDs or bonds. Only lately have yields on these investments been ticking significantly above zero. The extra burden - mental, accounting, tax compliance - of acquiring additional investments is worth something, and taking on that burden for measly returns may not be worthwhile. I'm only talking about short-term investments here. The whole point of short-term investments is that the principal needs to be relatively safe - but with that, the returns are meagre as well. Simply spreading it between multiple banks may be worth it.
  - slg 4y ago
    Spreading your money between multiple banks creates similar mental, accounting, and tax burdens as a simple investment would. Plus my "a lot" comment wasn't specifically connected to short term CDs. If you are going to let money sit for years, short term investments like that are the worst for growth second only to keeping everything in cash. That approach should only be taken by the most risk-averse people or people who need liquidity. Even still, OP is probably missing out on 5-figure potential gains by just doing nothing with over $250k+ for years. "A lot" is relative, but that is decent money that OP is effectively losing.
    - deleted 4y ago
      [deleted]
myroon5 4y ago
bank accounts are insured up to 250k/account by the FDIC investment accounts are insured up to 500k/account by the SIPC
JohnFen 4y ago
It sounds like it would be worth consulting a professional about what to do, honestly.
jedberg 4y ago
If you have that much cash lying around, you really should talk to a financial advisor because there are some super low risk investments you can make that will be better and safer than cash, but it depends on your tax and financial situation, so no one can really tell you here.
hinata08 4y ago
I really want to go to the USA to be able to do that. Where some workers who didn't go to college make more than 6000/month, and are able to store money. France here, you win 2000€/month (on a 36k/year job) when you graduate from an engineering college. And the government is about to lower social security to have you save in 401Ks anyway.

slg 4y ago

You should do some more research than simply reading whatever is posted on HN or just get a financial advisor because this is a failure in financial planning that is causing you to miss a lot of potential growth. No individual who would miss $250k should have that much sitting as cash in a bank account unless they are planning to buy a house or other large purchase in the next couple of months. That money should be invested somewhere even if it is just all in short term CDs or bonds if you are an extremely risk-averse person.

ChancyChance 4y ago
You're probably right.
massysett 4y ago
It's not exactly "a lot" of potential growth. Yields on short-term investments have been so close to zero over the past several years that I'd argue it has not been worth the trouble to put the money into CDs or bonds. Only lately have yields on these investments been ticking significantly above zero. The extra burden - mental, accounting, tax compliance - of acquiring additional investments is worth something, and taking on that burden for measly returns may not be worthwhile. I'm only talking about short-term investments here. The whole point of short-term investments is that the principal needs to be relatively safe - but with that, the returns are meagre as well. Simply spreading it between multiple banks may be worth it.
- slg 4y ago
  Spreading your money between multiple banks creates similar mental, accounting, and tax burdens as a simple investment would. Plus my "a lot" comment wasn't specifically connected to short term CDs. If you are going to let money sit for years, short term investments like that are the worst for growth second only to keeping everything in cash. That approach should only be taken by the most risk-averse people or people who need liquidity. Even still, OP is probably missing out on 5-figure potential gains by just doing nothing with over $250k+ for years. "A lot" is relative, but that is decent money that OP is effectively losing.
  - deleted 4y ago
    [deleted]

myroon5 4y ago

bank accounts are insured up to 250k/account by the FDIC investment accounts are insured up to 500k/account by the SIPC

JohnFen 4y ago

It sounds like it would be worth consulting a professional about what to do, honestly.

jedberg 4y ago

If you have that much cash lying around, you really should talk to a financial advisor because there are some super low risk investments you can make that will be better and safer than cash, but it depends on your tax and financial situation, so no one can really tell you here.

hinata08 4y ago

I really want to go to the USA to be able to do that. Where some workers who didn't go to college make more than 6000/month, and are able to store money. France here, you win 2000€/month (on a 36k/year job) when you graduate from an engineering college. And the government is about to lower social security to have you save in 401Ks anyway.