Optimal Finance Daily - Financial Independence and Money Advice

1750: Where Should I Invest My Short-Term 'Stash by Mr. Money Mustache on Investing in Bonds & Money Market Accounts

Dec 24, 2021
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INSIGHT

Stocks Are Long-Term Engines

  • Stocks return ~7% real over the long term but are wildly volatile in the short term.
  • Short-term can mean up to 15 years, so pick assets by time horizon.
ADVICE

Use Safe Accounts For Immediate Needs

  • For immediate needs, prefer no-volatility options like savings accounts and CDs.
  • Avoid using checking accounts for savings and skip money market funds at very low interest rates.
ADVICE

Prioritize Paying High-Interest Debt

  • Pay off high-interest debt before building short-term savings.
  • Consider using a line of credit as a cash cushion if its interest is lower than your mortgage rate.
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