Edit: update I decided on a CD. I may do an index fund in the future. This was a short commitment and easy to understand. Thanks everybody.

    • JamesBean
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      73 months ago

      Vanguard recently started offering a savings account that currently has a 4.15% APY (their ‘cash plus’ account).

      If OP wants to park the money in a savings account for easier access than a mutual fund, that’s both a more reliable institution and a better rate.

    • @MrEff@lemmy.world
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      3 months ago

      $10,000 at 4% gives you $400 interest in one year.

      Just about any decent dividend stock will outperform that. Look at PET for example. It is sitting at $3.65/share right now and offers a quarterly dividend of $0.30. That puts you at $1.20/share per year. 10k = 2739 shares = $3,286.80 dividend payout in one year.

      Banks are the worst place to put investments. Money in bank accounts are only supposed to be there if you need it liquid, like an emergency fund or your checking account.

      *PETS

      PETMED EXPRESS INC COM

      For all the nay sayers downvoting me as if it is impossible to find dividend stocks that outperform their precious SPY or high yield savings rates, here is a great list I found with shit loads. I count 60 different stocks that offer 10% yields or more. 100 in total all offering over 8% -double what some bullshit ‘high yield’ savings offers.

      https://www.tradingview.com/markets/stocks-usa/market-movers-high-dividend/

              • @Mr_Blott@feddit.uk
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                13 months ago

                If it was a temporary drop, yes. They’re all being slowly hammered into the ground.

                Maybe they’re paying big dividends because the actual share price is worthless, so you lose your initial investment but think you’re getting money back? Dunno, seems shifty as fuck

          • sunzu2
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            13 months ago

            Tbill has zero principal risk and a higher yield…

            Which dividend stock can offer this?

        • @MrEff@lemmy.world
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          3 months ago

          Little under 30k in higher risk dividend. Bring in about 800 a month.

          I have a mix of large cap, small cap growth stocks, then dividend high risk and low risk. Stock like this (I do not own PETS, I was just using it as an example) would be a high risk due to its price instability. But you mitigate that with stop loss orders.

          I have a vanguard/roth for my longs (large cap growths and stable dividends with DRIP) and then use etrade for the small cap or high risk ones. I like their tax documents and easy interface.

          People make arguments against dividend stocks, I simply call it a different strategy. Some years it beats out my growths, some years it is about on par. Depends on where I have it at the time and slightly more market dependant.

          I have recently gotten into ex-date chasing. While it has increased the returns, it is more work.

          • Grayox
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            3 months ago

            Ive thought about doing that with my IRA, has the market negatively impacted your yields at all?

            • @MrEff@lemmy.world
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              13 months ago

              When it is easy bull markets, I go heavy on growth stocks. When the market is bear, I go heavy on dividends. Right now though there is a high beta turmoil, so I have a mix of both. My IRA is also set up as more od a “leave this alone” investment. My etrade account has my “fuck around and find out” money. I mention this because it is hard to directly compare the two. So far my dividends have strongly out performed the growth stocks, but only in the last 3 months or so has the gap widened. I credit it to 2 specific ones that are getting me 30%-ish yields with stable prices. They are also new etf’s, so the hedge money is still strong before the stripping gets to its prices. I mentioned in a post lower that that my little under 30k is netting me 800/month. Honestly it is paying a higher yield than renting out my condo is getting me.

            • @MrEff@lemmy.world
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              3 months ago

              Also yes. The more professional name is ‘dividend capture strategy’. More work, worth the pay off, do all you can to avoid commissions and fees.

  • @aubeynarf@lemmynsfw.com
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    1293 months ago
    1. pay off high interest debt

    2. top off your emergency fund so you don’t run into expensive short-on-money situations

    3. take care of deferred maintenance on your car or house that might turn into an expensive repair

    4. If you have an employer sponsored 401k, increase the contribution amount to get 10k more tax free into it before the end of the year and use the $10k cash in hand for expenses.

    5. Open a roth IRA and contribute the maximum amount you can (which may vary based on your income)

    VT, VTI, and SPY are good broad-market funds with good historical growth.

    • CrimeDadA
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      33 months ago

      I used to not have any doubts about a Roth, but I’ve been considering that maybe it’s a little too much like giving the government a free loan. Do you know if there’s a thorough comparison anywhere between a traditional and Roth IRA that takes into consideration the opportunity cost of paying tax on the contributions?

      • @Zeeber@lemmy.zip
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        103 months ago

        Compound interest will far outweigh paying taxes now for a Roth. Especially if you also have a 401k, the taxes in retirement will be potentially large based on the growth of the fund over decades. A Roth makes it so you pay nominal taxes now for potential large tax free growth later.

        The exception would be if you think your income will decrease in your later working years, in which case a traditional IRA could make more sense. That however is a unique case. Generally it’s better to take advantage of a Roth if you can for tax free gains later.

        • CrimeDadA
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          03 months ago

          I understand how having a higher income and tax rate in retirement makes a Roth attractive. However, the comparisons I’ve seen don’t fully account for the opportunity cost of paying the taxes up front in the case of a Roth, since a traditional IRA lowers your taxable income by the amount you contribute. This tax break allows for a greater contribution. In other words, I think a fairer comparison would show a greater initial contribution for a traditional IRA.

      • NaibofTabr
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        43 months ago

        Here’s a useful comparison.

        The biggest question is, do you think your tax percentage will be higher now, or higher in the future? If you think your income might increase later (placing you in a higher tax bracket), or that the government might increase your tax burden later, then it’s better to pay taxes now.

        • CrimeDadA
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          03 months ago

          That is a helpful comparison, but it assumes the same initial contribution. I think a better comparison would assume a higher initial contribution with a traditional IRA in order to account for the money being paid in taxes with Roth as being a missed opportunity. The money that went to taxes in the case of a Roth could have been additional investment in the the case of a traditional.

          • @Zeeber@lemmy.zip
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            13 months ago

            But you will pay taxes on the growth of the account later. Whereas a Roth grows tax free.

            Ultimately it depends on what you think you will make in retirement. Both traditional and Roth IRAs are tax advantaged accounts, it just depends on when you want to pay the tax. It also depends on what kind of investments you are doing in those accounts. For something like the S&P 500, you can expect it to grow so a Roth is more tax advantaged than a traditional. However, we also aren’t talking about huge investments either l, so do your own research and see what you want to do.

    • @robocall@lemmy.worldOP
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      73 months ago

      1-4 are all taken care of. I need to learn more about a roth IRA and what an index fund is. I’m okay with letting $10K sit somewhere for 5-10 years, possibly longer like for retirement.

      • @prayer@sh.itjust.works
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        63 months ago

        Don’t rule out a Roth if you only want to save for 5-10 years. You’re allowed to withdraw the principal (initial 10K) at any time for no penalty/cost, so long as it’s recorded properly with the IRS when you withdraw it.

      • zerotozero
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        33 months ago

        Read up on Roth IRAs - your future self will thank you! You can open an account anywhere you’d like (Vanguard, Fidelity, Charles Schwab, etc). One thing I’ll mention though: the annual limit is 7K for 2024 (8K if you’re 50+), and you have to have at least that much in income to contribute (i.e., if you only had 5K income for 2024, then that’s your limit).

        So, for 10K you’ll have to invest in 2024 and 2025. You also have until tax day to make contributions for the prior year.

    • @PineRune@lemmy.world
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      313 months ago

      I like these points. Preventing a future expense by paying less now is always worth it, if you can afford it.

      • @r_thndr@lemmy.dbzer0.com
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        13 months ago

        That depends, how far in the future, how big of an expense, how much interest can you earn, and what’s inflation looking like?

        If it’s more than a couple thousand dollars more than a couple years out, you could possibly make useful money with a high interest bearing account provided inflation is expected to be less than about 2/3 of the interest rate of the account.

        Time IS money.

        • @PineRune@lemmy.world
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          13 months ago

          This might make sense for people with six+ figures sitting in a savings account, but the average person today doesn’t have enough cash to think about earning interest on it. For them, paying off a debt now would be cheaper in the long run. For the most part, at least.

  • @Steve@startrek.website
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    103 months ago

    Depends on your risk tolerance.

    A 4% savings account is “safe” but might not keep up with inflation.

    An index fund might be “good”, but the value can go down.

  • Rimu
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    103 months ago

    There is no universally good investment - it all depends on your priorities, risk appetite and timeframe.

    • Fonzie!
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      33 months ago

      I kind of agree, moving from USA to for example Switzerland would be an improvement in every aspect of life.

      But that might not be what they want.

      It’s a big undertaking; learning the language and law, changing jobs, being okay with the fact you’ll rarely if ever see your family and friends…

      • @Asafum@feddit.nl
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        43 months ago

        The biggest problem for some people is no country wants them.

        America seems to take just about anyone given you wait decades, but every other country worth moving to has strict income or professional requirements. I’m just a worthless factory schmuck so I’m stuck here :(

        • Fonzie!
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          33 months ago

          Or that, yes.
          Even if you suddenly cash out a lucky 10 000 USD once, a lot of countries’ income requirements still filter you out

          • @otter@lemmy.dbzer0.com
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            03 months ago

            Going about it that way is like brute forcing a password. There are myriad other solutions, and necessity is the mother of invention.

            • Fonzie!
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              13 months ago

              I’m not sure what you mean by that, so just to clarify what I meant: A lot of countries require you to prove you have a sustainable income, so showing them you’ve earned 2500-3000 EUR every month for the past three years, and that you already have a contract waiting for you in their country, works. Showing you received 10 000 USD once when you can’t prove a sustainable income won’t do.
              This makes it hard for people to move just because they got lucky with money once.

              I’m not saying it’s a good thing or not, just that this is the case.

  • @adj16@lemmy.world
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    -23 months ago

    I like roboinvester accounts. You put money in, it automatically invests in stocks for you based on your current age and risk tolerance (which you can change whenever you like). I particularly like Wealthfront, and their app/website are really good. They’ll manage $10-15k for free, and then above that you pay a small fee out of your earnings for their service. If you use someone’s sign-up link, they’ll bump your managed amount by $5k. Comment back if you’re interested and I can share mine. Good luck with your investment, whatever you choose!

  • VT. Don’t gamble on single stocks. But since capitalism rules and all of congress owns stocks, you can be fairly confident the market will go up in the long term 10+ years horizon. And compound interest does miracles.

  • @twistypencil@lemmy.world
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    93 months ago

    Don’t disagree about stuffing it in VTI… But, be aware that things can go up and down, so don’t obsess over the value one you put it in. It’s long term so it should go up over long term, but they’re can be months sheets it goes down and even a year where it doesn’t do well

  • @InternetCitizen2@lemmy.world
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    33 months ago

    There is already some good advise, so I will add some of dubious value that might make sense for some people. Buy a better car (or get a motorcycle). I live in the US, so having private transportation is a necessity. I have a car, but mostly I share it with my parents. I do use a motorcycle as my main commute and it is cheaper than a car’s running costs. Just saying that $10k + sale of your current car could fetch you just about any other car. It is kind of hard to do a whole lot of life changing things with only $10k. Perhaps dental work if you need any.

  • tiredofsametab
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    203 months ago

    With zero information on your situation, it’s difficult to say. If you have debt, paying that down/off is generally priority one. If you are debt-free, then you have options. Your age, stability, goals, and other factors would generally dictate what type of action to take. Were it me (early 40s, very low interest rate home loan), I’d put it into an index fund where I’ve already got some investments. In my case, I’m investing for retirement in about 25-30 years (as if I’ll be able to do that, but one can hope).

  • @robocall@lemmy.worldOP
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    63 months ago

    So from what I’ve read after viewing this thread, I make a vanguard account, either get a money market fund or a brokered CD, put the money in, let it sit for awhile, and then profit years down the line?

    • @Hugin@lemmy.world
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      113 months ago

      Money market or CD is going to have terrible return. You will be lucky to match inflation. Get a low overhead SP 500 index fund. By low overhead I’m taking .15% or less. You should be able to find .125% with a bit of poking around.