‘We have 33k in bonuses that we aren’t sure how to invest’: My wife and I have extra cash but unsure where to put it. How should we maximize our savings and investments?

Hey Money Minder,

I have a question for you about what to do with about 33k in bonuses my wife and I have. Currently, we have a HYSA that we are using for a future down payment on a home, but we’re not planning to buy for another 5-10 years. We’re both 28.

With this longer timeline in mind, should we consider putting the money in the stock market (VOO/VTI) or keep it all in the HYSA? Just so you know, we’re already maxing out our 401k contributions. Here’s a breakdown of our current savings:

• Checking (emergency fund): 15k
• Housing fund: 30k
• Stock market investments (mostly VOO and VTI): 60k

Some more info about our finances:

• We have no debt and recently paid off our car and student loans.
• We max out our Roth IRAs.
• We save 1500-2000 with each paycheck, which used to go towards student loans but is now dedicated to building our house fund.

Looking forward to hearing your thoughts! Thanks!

Cheers,
Financially Confused

Response from THE MONEY MINDER:

Hello There,

Congratulations on having no debt and a solid financial foundation! Given your situation and long-term goals of buying a home in 5-10 years, it would be wise to consider investing the $33k in the stock market, particularly in diversified index funds like VOO and VTI. Since you are already maxing out your 401k and Roth IRAs, investing in the stock market could potentially provide higher returns over the long term compared to a High Yield Savings Account (HYSA).

Considering your current savings breakdown, you have a healthy emergency fund in your checking account, and a good amount set aside for housing and investments. By investing the $33k in the stock market, you are leveraging a longer timeline for potential growth, which aligns with your future home purchase plans. However, it is important to remember that investing in the stock market comes with risks, so make sure to do thorough research and consider consulting with a financial advisor to ensure it aligns with your risk tolerance and financial goals.

In summary, given your financial situation and long-term goals, putting the $33k in the stock market can be a practical and realistic approach to potentially grow your money for a future down payment on a home. Keep up the good work with your financial planning and savings habits!

Farewell from THE MONEY MINDER.