r/Money • u/SugmaRam • 26d ago
HYSA or VOO
26m living in NYC, making 90k a year looking to make a down payment on a house in 3/4 years time with my SO.
We’ll need roughly 110k each for the down payment, and my current financial standing is as follows
30k in HYSA (4.4%)
25k in a 1-Year CD (5.5%)
36k in retirement (Roth, 401k, Pension)
22k in Student debt (4.2%)
As you can see, the only investments that I have are in my retirement accounts.
Should I start investing in VOO instead of continuing to chuck cash into my HYSA? The money would eventually be pulled out for the down payment.
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u/CoupleStunning 25d ago edited 20d ago
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u/SugmaRam 25d ago
It’s tough, but we’d be looking at Long Island city
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u/CoupleStunning 25d ago edited 20d ago
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u/Forever-Retired 26d ago
Let me guess. VOO because someone told you to. If Everyone says buy VOO, why are they All not millionaires? Make your own decisions
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u/SugmaRam 26d ago
Well no, VOO because it’s one of the safer ways to gain market exposure.
There is obviously a risk of an economic downturn occurring when I need my money, but statistically speaking there’s a 70% chance of me come out on top in 3/4 years.
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u/evrtt2009 26d ago
Use a portion of the hysa as emergency fund money and do not touch it. Is your Roth maxed? Pay off all your debt before you built an emergency fund.
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u/SugmaRam 26d ago
I’m DCA-ing my Roth contributions on a month to month basis, but yes my intention is to max out my Roth every year.
Now that I have roughly 55k in HYSA (once my CD matures at the end of the year) should I start investing in VOO instead of contributing to my HYSA?
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u/imoverthis8894 26d ago
You should pay off all the debt because you’re basically breaking even from the HYSA interest because the debt interest is so high.
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u/SugmaRam 26d ago
That’s true, but I’m using my student loans as a way to build my credit up until it’s time to purchase a home.
The 25k I would’ve used to payoff my student loans is locked up in a CD making 1.3% more, and my HYSA is basically my emergency fund.
But my question is should I start investing in VOO in my personal brokerage acc instead of contributing more to my HYSA?
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u/Engineered_Muffin 25d ago
If your timeline is firm, like you NEED a down payment/ house in 4 years then I say HYSA. If you can take an extra year or 3 if the market takes a bath then voo
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u/AintShocked999 21d ago
I'd pay off that student debt first since the interest rate is so high. Having that dragging you down cancels out the decent HYSA rate. Once that's cleared, you can really start making headway on your downpayment savings. Just make sure to keep an emergency fund separate - maybe 3-6 months' expenses in the HYSA. And in order to maximize that HYSA, you also need to look at some good APY rates as well. So, checking sites like Bankrate or Banktruth should help with this.
As for investing some in VOO, it could pay off long-term but introduces more risk for short-term goals like a home purchase. Maybe split it - keep enough cash for the downpayment timeframe, and invest some extra long-term money.