“I feel like I’m watching my savings sit in the bank and not using it to my advantage”: I have $45k saved up, but don’t know how to invest. How can I make my money work for me?

Hi Money Minder,

Yo, I’m 25 years old, working full-time for a couple of years now, and rocking a cool 100K a year salary. I got my usual monthly expenses – rent, car payment, and student loans. Even after all that, I still manage to save around $1,000 every paycheck. I’ve got about 45K saved up so far, and I keep adding to it with each biweekly paycheck. But all that money is just chilling in my savings account. I’m clueless about investing, though. I was thinking about throwing some cash into a 9-month CD, but I haven’t pulled the trigger yet. My end goal is to own some property eventually. So, what’s the smart play for me right now? I feel like my savings is just sitting there, not doing much for me. I’m open to any advice you’ve got!

Peace out,
Savvy Saver

Response from THE MONEY MINDER:

Hello There,

Hello! It’s great to hear that you’ve been diligent in saving a significant amount of money despite having monthly expenses and being new to the working world. Your dedication to saving is commendable and will serve you well as you work toward your goal of acquiring property.

Given your current financial situation, it’s definitely wise to consider ways to make your savings work harder for you. While CDs are a safe option for saving money, the interest rates are often quite low, and you may not be maximizing the growth potential of your savings. One step you can take is to educate yourself about investing. This doesn’t mean you need to become a stock market expert overnight, but learning about different investment options such as mutual funds, index funds, or real estate investment trusts (REITs) can help you make informed decisions about where to put your money.

Another practical move you can make is to consider opening a high-yield savings account or a money market account that offers higher interest rates compared to traditional savings accounts. This way, your money can continue to grow at a faster pace while remaining easily accessible for when you’re ready to start investing in property.

Additionally, setting up a meeting with a financial advisor could be beneficial. They can provide personalized advice based on your financial goals, risk tolerance, and timeline for acquiring property. They can also help you create a plan that aligns with your aspirations and ensures that you are making strategic moves with your money.

Remember, it’s essential to strike a balance between saving and investing to make your money work for you in the long run. Taking these steps can help you move closer to achieving your goal of owning property. All the best from THE MONEY MINDER as you continue on your financial journey!