Where to Put $50,000 Today

By Geoff Schaefer

Geoff is a Wealth Advisor with Intergy Private Wealth. He writes for The Steadfast Fiduciary to help people live with an abundant heart, open mind, and boundless generosity.

June 22, 2023

Hopefully my catchy headline caught your attention.  That is really the only purpose of a title like this.  What follows is hardly ever sound investing advice.  There may be little to no financial planning advice either because it is something so subjective.  So, in a strange attempt to answer that question after I directly refuted it, here it goes: It completely depends.

Whether you have an extra $500 or $50,000, the decision on what to do with it is important.  The answer will be very different for everyone, but everyone should be closer to their desired future state after answering it. The answer should never go straight to the name of a stock, or a set checklist to follow. There should be subjective follow-up questions with perhaps nuanced answers.

Good follow-up questions would be, do you have an emergency fund? Do you have high interest debt? Are you on track for retirement?  Have you taken a vacation in the past 24 months?  Maybe the answer to those helps the question of what to do with your extra money answer itself.

Do you have an emergency fund? This is three to six times your living expenses set aside in a savings account.  So, if you spend $6,000 every month, do you have $18,000- $36,000 set aside for a rainy day?  If not, a high yield savings account could be a great option.

Any high interest debt? For most people, this will not include paying down their mortgage principle, we can cover this on a separate post. High interest is a relative term, but personal loans, student loans and credit cards often fall into this category. Instead of saving or investing, maybe pay off debt that costs 10% plus annually.

Retirement readiness is very subjective.  There is savings plus social security, maybe pensions or inheritances in the picture too. Starting off, a good question is are you reasonably close to maintaining your current lifestyle in your 60s given conservative assumptions. This is a topic you likely want to work with a Certified Financial Panner™ on due to the any variables and personal nature of the goal. If you determine you are a bit behind, supercharge your savings with an influx of money into investment accounts.

Last, maybe if your plan is in hand, your lifestyle needs a bit more capital than your 401(k).  Might sound crazy coming from a financial planner, but what most people don’t understand is that financial planning is as much about living today to the fullest as it is navigating through what the future may hold. Don’t work so hard guaranteeing you will be as rich as possible when you are 75 years old, that you miss out on the wealth of experiences that every day brings. Maybe a vacation unplugged from work, a remodel of the room where you spend your mornings with your spouse, or those concert tickets to see your favorite artist are all a better investment than buying some stocks.

The question of where do I put my money should be answered with more questions. Without context and subjective restraints, it can be a ridiculous question to both ask and answer.  So, before you pour your entire emergency fund into the latest growth and tech fund, sit back and ask yourself (or have someone ask you) what are you trying to accomplish and where are you on that journey.

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