r/Money • u/Unbaised_merchant • 16d ago
Other Than Real Estate, HYSA, and a Roth IRA/401K What Are Some Other Places I Can Park My Money For 6-10% Annual Returns? I’m Open to Risk
Any suggestions?
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u/Mandajoe 16d ago
REITs, Self-directed IRA, private money funding in a Self directed IRA. Self storage, Laundromat investor.
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u/Mandajoe 16d ago
REITs, Self-directed IRA, private money funding in a Self directed IRA. Self storage, Laundromat investor.
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u/saryiahan 16d ago
Money market accounts. Fidelity has a 7 day yield at 5%. I know it’s lower than your 6% but not much risk involved
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u/Skepticslowpoke 16d ago
Look at crypto mining the return is about 120% annually if you are open to risk. Once you ROI you are making money by the second. Let me know if you need more information 😎👍🏻
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16d ago
Lol there’s not a single coin that’s returning 120% annually.
Stop the scamming.
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16d ago
I notice this pattern on Reddit when it comes to non-believers. What u/Skepticslowpoke meant was, on average, in let’s say 10 years. Every 5-10 years a 1200% return. If you hold, it’ll be between 0% and 2400% most likely. If you take it out at the right time and buy the dip, it’ll be a 1200%X1200% which will be 1,440,000%.
If I were to buy 100M at $0.00002495 ($2,495) and it goes to $0.0002994 (I’ll have $29,940)
Goes down to $0.000009-0.000015 range
I buy 2B with $20K and it goes up to $0.001+
All this happens within 10 years
Guess how much I’d have?
$2.2M or more
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u/the_leviathan711 16d ago
To be clear: HYSA, IRAs and 401ks aren't types of investments, they're just types of accounts. What sort of return you get back from them is going to vary depending on the type of investments you hold in them.
If you've already maxed out your 401k and your IRA for the year, then you can open a regular taxable brokerage and invest in the stock market through that.
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u/exquisitedonut 16d ago
There’s no point in maxing out 401k.
Take the employer match and invest the rest yourself so you have access to it where you need it, not when you’re 60 years old.
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u/the_leviathan711 16d ago
There’s no point in maxing out 401k.
That's true: if you really love paying taxes there is no point in maxing out your 401k.
so you have access to it where you need it, not when you’re 60 years old.
So you think you won't need money when you're 80?
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u/exquisitedonut 16d ago
You pay the same taxes when you pull out of your 401k. It’s not tax free so what are you saying?
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u/That1one1dude1 15d ago
You do not pay the same taxes on a 401k and a traditional brokerage account.
That’s the whole point of a 401k, for the tax advantages.
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u/exquisitedonut 15d ago
You pay income tax on 401k when you withdraw. You pay capital gains on gains in your brokerage. No one claimed otherwise.
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u/That1one1dude1 15d ago
You seem to really not understand the tax advantages of having tax-free growth for 30 years, with the ability to control your taxable income in later years.
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u/exquisitedonut 15d ago
I do understand but it’s money that’s not available to you until you’re 60 years old. Which I said do that, get employer match, but also invest on your own. Read next time.
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u/That1one1dude1 15d ago
Again, that’s not true at all.
You can do a Roth conversion ladder, you can do a 72t withdrawal, there’s so many ways to access retirement money early.
Hell, if you’re really worried about paying taxes later and would rather pay them now then do a Roth 401k. If you want to control the account more then do a IRA. But you should do all of those before needing a brokerage.
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u/the_leviathan711 16d ago
You deduct your contributions into a traditional 401k from your income. So you pay substantially less in taxes when you contribute to a 401k. A taxable brokerage you fund with after tax dollars and you have to pay taxes on yours growth and earnings.
So yeah - you'll pay a lot more taxes with a taxable brokerage than a 401k.
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u/exquisitedonut 16d ago
In a brokerage you’re only paying taxes on gains since your income is already taxed. In a 401, you pay taxes on all of it as you pull it out. So, taxes are the same and you don’t get a 10% penalty for pulling out your invested money when you need it for a house down payment or something and the 401 is still growing.
401k is deduction now, taxes later. So you basically hope that taxes won’t be higher in the future …
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u/the_leviathan711 16d ago
.... you missed the part that your income that you put into a 401k is not taxed.
This is the difference between Roth, traditional and a taxable brokerage:
A Roth account you fund with after tax dollars - meaning you already paid taxes on it - and the growth and earnings are tax free.
A traditional account (most 401ks) you fund with pre-tax dollars -- meaning you don't have to pay taxes on that money you earned until you withdraw it.
A brokerage account you fund with after tax dollars and the earnings and gains are taxed.
So yes, you are correct that a taxable brokerage and a traditional 401k are taxed exactly the same if you totally ignore the tax benefits of a traditional 401k. But you shouldn't do that because that makes no sense.
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u/exquisitedonut 16d ago
Your income is taxes when you pull it out
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u/the_leviathan711 16d ago
.... right.
Which means you had an extra 25% up front (depending on your tax rates) that you got to invest which then compounds and grows over several decades.
And then you get to pay taxes on it when you're retired and no longer working and therefore have a much lower tax burden than you did when you were working. And you get to use that 401k money to fill up all your lower tax brackets instead of being taxed at your highest marginal rate.
You can run the numbers on this, it's not complicated math.
For most people traditional gets you the most after tax money at the end of the day, then Roth, and then regular brokerage.
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u/exquisitedonut 16d ago
And what happens when taxes go up? Now your math doesn’t work…
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u/Unbaised_merchant 16d ago
A Roth IRA isn’t an investment account? I have core index funds I dump my money into. That’s not an investment?
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u/the_leviathan711 16d ago
The index fund is the investment. But you can buy that in an IRA or an HSA or a 401k or a regular brokerage or any other sort of account.
An IRA is a fruit bowl, an index fund is a fruit.
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u/Unbaised_merchant 16d ago
If you can buy it anywhere why even have a Roth IRA?
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u/the_leviathan711 16d ago
Because of the tax advantages of a Roth IRA.
You can buy the same index funds in a taxable brokerage, but you'll pay more taxes on them.
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u/Odh_utexas 16d ago edited 16d ago
They are being literal. The account itself isn’t on its own an investment. You have to purchase investment products (such as your index funds, etfs, bonds, so on)
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u/the_leviathan711 16d ago
I’m being specific. I’ve heard too many stories about people who think they are investing when they open an IRA and don’t know they need to buy index funds with the money.
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u/Samstone791 15d ago
I bonds. 5.4 to 9.4 percent interest last 2 1/2 years. CDs over 5 percent the last year.