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Ask HN: What to Do with My Money?

5 points by EmbeddedLight ↗ HN
Hi All, I'm a recent grad working as a software engineer in the US. I'm struggling to understand what I should be doing with all my excess capital? I have no expenses currently, meaning I do not pay rent, no car loan, etc. I have a large amount of cash saved up, and don't really know what to do with it. I was planning on buying a house, but the housing market is obviously very high and may not be a good investment at the current time. I do a small amount of active trading, but have not bought much of any longterm ETFs and index funds (mainly do options). So long story short, I don't really want to buy a house or car right now due to inflated prices. What's the best way to utilize my cash if I don't need much of it in the foreseeable future?

Edit: By large amount of cash, I mean $50k+. Edit2: No loans or debt of any kind.

6 comments

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theandrewbailey
Agreed, buying a house right now is not a good idea. Renting might be better right now, but it looks like you've worked around that.

1. Pay off all loans and debt, if you haven't already. This includes student loans and credit cards.

2. Max out retirement accounts (401k, roth) and health savings accounts. You might want to talk to your employer's HR department.

3. Be generous. Donate some. Get a receipt and save for a tax write off.

EmbeddedLight
I forgot to mention in OP, but no loans or debt of any kind. All paid off already, including student loans.
theandrewbailey
Awesome, life is great when you don't owe anyone anything!
yosito
Put 1 year worth of living expenses in a savings account for emergencies, and don't touch it unless you have an emergency or lose your source of income. Make sure you're maxing out your 401k and other long term savings vehicles, and then, spend your extra money on investments, that is, things that will earn you more money with less work.
pestatije
You don't take a decision on not buying a house "due to inflated prices". The market can stay inflated longer than you can wait for it to deflate.
nunez
The general /r/personalfinance plan is:

- Pay off your debt, then

- 3-6 months of savings, liquid, then

- Buy whatever you want

I'm saying this given that I definitely don't have 3-6 months of savings liquid (yet) though I have paid off all of my debt. Getting rid of debt is incredibly freeing in and of itself.