🚨BEWARE: High Yield Savings Account TRAP (REWARDS ENDING SOON)

High yield savings account 4% interest to drop soon! Earn more with stocks, dividend ETF SCHD, and more. Best investing tips during a down market with inflation and CPI data for FED rate cuts and dividend investing long term buy and hold forever! #highyieldsavings #etfinvesting #schd

(Portfolio Review, Allocation, Budget Help, Personal Finance, Investing, etc. NOTE: NOT financial advice as I am not a financial advisor)

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[JTL]

HYSA aren't investments.

I use my HYSA to save money with growth at 0% risk and 100% liquid. for my taxes and emergency fund.

Anything 2+% growth, let alone my 4.25%, makes 100% sense for savings.

[ErikBerg]

Historically, it has been seen
1. When yeild curve invert and short term bond give more return than long term bond and when it re-inverts you shall become cautious of equity market.
2. Whenever FED cuts rates and bring down to ease the market, the market respond positively and hit new high in couple of months. attaracting lot of money from retail investors.
3. But the FED cut does not eventually help the crisis, but the short term market rally gives big shark institutional investors a easy exit and eventually the equity market slips into recession in next couple of months mostly on some trigger coinciding with oil price rise mostly.
4. Safe strategy will be, when FED cut rate be very cautious. Take advantage of equity market rally for 2-3 weeks and exit. People underestimate the impotance of holding cash during recession.
5. Wait for the market to crash with liquid cash in hand. Start bottom fishing when market is down at 50% and keep averaging down. Wait for 3-4 years money will change hands and you will be the next millionaire in the town. When everybody is panicked, buy the panic.

[peterj.]

First concept to learn with banks…. They use your money to make money. Which means you could do the same to make more. Just keep an emergency savings in a bank…. Anything above that figure is essentially a potential lost.

[dwalker]

I have followed your three ETF portfolio with 33% VOO, 33% VUG, 33% SCHD in addition to a separate account with 100% SWVXX as my “emergency” fund (earns around 5.14%). SWVXX will cover five years of living expenses. I do not plan on making any changes. Not flexing but my returns have never been better. I’m 75 years old with investable assets in the low eight digits.

[jime]

these cuts are not coming soon....and it will not drop to 1%. by end of yr it will prob drop to 4%

[hcdoublel]

My experience with HYSAs is they have a great rate for 2-3 months and then start dropping it in increments until it is well below what they advertise on new accounts. So I have to move to another account somewhere else if I want that 5.xx% rate. Luckily it is not hard to do with online accounts these days, just annoying. That being said, if your rate starts to drop (they send you emails to notify you) don't be afraid to move to somewhere else with a better rate. They are betting that you won't (like cable companies or cell phone carriers).

[docnez]

55% but there’s a risk it will go down, then up and hopefully back up. HYS only goes up.

[Laurie-qnyl]

Thank you! Good to know! Use HYSA for my house insurance, property taxes, car insurance etc. I’ll keep it there

[TheBeagle]

I don’t expect to see interest rates go as low as many think they will, just because they were at historical lows previously. We are actually close to the historical average. Any rate cuts will be few unless the economy really tanks.

[blackgrandpa]

Up here in Canada 🇨🇦 I have my investing funds in a high yield etf with low fees and currently pays 5%

[frixzt]

I don’t think you should put your emergency fund in VOO 😂

[reedme]

Comparing HYSA to QQQM just confuses people. QQQM has tons more risk and volatility and should only be held as an aspect of a long term portfolio. HYSA is a great parking spot for cash/emergency fund/etc. So start the conversation about risk and time horizons instead of telling people they should compare the rate of a cherry picked year for QQQM. It rarely returns 55%.

[vsntchq]

Can you be trapped if you can just take your money out at will? Without loss? Rates arent going down significantly for quite a while

[TAYWAN-gbtx]

As an avid investor, I often mull over how accomplished investors are able to amass fortunes through their investment endeavors. Presently, I hold equity exceeding $545K from a recent home sale, yet I'm uncertain about my next investment move. Should I consider buying stocks at this time, or should I await another opportunity?

[supercruchynoodle]

thank you prof G for addressing older investors too.

[TheSendaBigSmileChallenge]

Another amazing video Nolan. Great job at helping so many people learn more about investing. 😀👍

[CarlosEGonzalez-zxkx]

if you move from HYSA (or Money Market account for that matter) into SCHD would you not be exposed to capital losses in SCHD once the economic desaceleration lowers the SCHD portafolio earnings expectations?... I understand the logic of shifting interest to dividends but you are getting a higher risk in the short term, isnt it? ...

[samuelweiner]

It is not an either putting your money in a high yield savings account or in stock market investments. People should do both. I do. It also depends on your situation, your age, going to buy a big ticket item, etc.

[CentralNH]

Would it be better to invest 100.00 week after 10% match in 401k or take the 100.00 invest in an ETF s week?

[dishcleaner]

Maxing my Roth IRA and getting my match in my Roth 401k. The rest goes into a savings account. Either that money turns into a down payment for property, or equities crash and I buy those. The interest rate just makes waiting more comfortable.