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Not gonna lie, I’ll probably try this.

Anyone know what L3 means at J&J?
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Is this for real?

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What happens if you invest the money instead of saving in HYSA and you lose 20-30% in a year if you need the money then? Will that be a problem?
The stock market isn’t always up… that’s the problem.
Yes, if you can ride out any short term volatility, keeping money in a brokerage should far outweigh a HYSA both due to return and favorable tax status. But not everyone can afford that kind of patience.
They are different tools for different utilities
i invest 100% of our excess income, other than 1 month spending in cash, (after 401k, BD Roths, etc) into brokerage for long term growth. if EY1’s scenario happens and I need cash, I access cash (tax free) as a margin loan against brokerage, and payoff with future income. not all are comfortable with this, but has suited us well. Live Long And Prosper 🖖
HYSA below the FDIC limit is essentially risk free.
If you have money in a HYSA tax efficiency is not your main priority; liquidity and capital preservation are.
Are you talking about putting the money in money market fund that earns more or less the same interest as a HYSA? That’ll be taxed as ordinary income, regardless of how long you leave the money in there.
Super helpful! Thank you everyone for all the extra perspectives I was missing before!
Regular taxable interest is the most heavily taxed form of investment income (federal marginal rate + state marginal rate + NIIT).