Best ways to save money right now?

Hey everyone!

I’m reaching out because I could really use some advice... honestly, any kind of guidance. A few days ago, my family hit a bit of a jackpot: my wife inherited $20,000 in cash.
Once the initial shock wore off, we started wondering what on earth to do with it. I don't want us blowing it on nonsense (which isn't likely, since I'm pretty frugal), but I also don't want to just let it sit in a basic savings account earning pennies while inflation eats away at its value. The catch is, I’m not exactly a financial wizard when it comes to investing. My career has been in a completely different field, and up until now, I haven't earned enough to deal with these kinds of "problems."

It goes without saying that I immediately dove headfirst into the internet to try and educate myself, but now I’m stuck. I’m totally overwhelmed by all the info out there, and half of it goes right over my head. So, here I am, asking you all: what should my next move be?

I’ve already put a portion toward a down payment fund for a house, with the goal of eventually buying a place outright rather than taking out a massive mortgage. I’m also looking into a Roth IRA, since from what I understand, it’s a relatively safe bet. The issue is the leftover cash. I’d love to put some of it into something a bit more "high-risk, high-reward," but I have no clue how to navigate that world.

More than anything, I’m looking for tips on *how* to learn. Are there specific books, websites, or publications you'd recommend? Something geared toward beginners that won't make my brain melt.

Thanks in advance...

Check out these two threads on the forum:

"Money Game"

"Real Estate vs. the Stock Market"

And feel free to ask me anything else you need...

You really ought to leverage whatever you have as a down payment, grab a loan, and pick up one or two properties in New York City

hamtaro said:Hey everyone!
I'm really looking for some solid advice on how to actually learn this stuff. I'd love recommendations for books, websites, magazines... anything useful. Ideally, something geared toward beginners so I can take it step by step.

Check out this thread so we don't keep repeating the same things:

You can find plenty of www.investopedia.com interesting discussion boards over there. Might be worth a little reading if you have the time...

I’d say look into some solid life insurance—something with actual meat on its bones.
Plus, let's be real, $20,000 isn't exactly a massive windfall—it's hard to pull off anything huge with that kind of cash. So, I’d probably just spread it around a bit... maybe put a little into life insurance, toss some toward a mortgage, grab some stocks, maybe some index funds...

Jose Miller3 said:I’d suggest looking into some solid life insurance coverage.
Besides that, $20,000 isn't exactly a massive fortune; you can't really pull off anything huge with it. My move would be to spread it out—put a little into life insurance, chip away at a mortgage, toss some into stocks, maybe some mutual funds...

If you try to diversify $20,000 across that many different things, you've already lost before you even start.

Diversification? Please... that’s just a fancy way of saying you're de-worsifying...

Focus, my friend. That's the secret, not diversification. Learn everything there is to know about one specific investment until you're basically an expert. Then, put your energy there and you'll see those above-average returns...

Ronald Castillo5 said:Focus, man. Don't worry about diversification yet. Master one specific investment until you're an expert, then double down on it to pull those above-average returns.

I’m with Ronald Castillo5 on this. I used to think differently, but look—diversification makes sense once you're sitting on several million and just want to protect what you have.
If you're hunting for real gains, you have to focus.
Here's how it works: Back when I was playing around on www.virtulastockechange.com pretending to be a big-shot investor (they gave me a fake $500,000 portfolio), I started by buying a bunch of different stocks. It was just okay, nothing special. Then I got bored and decided to play with just a few picks. I kept an eye on JPMorgan Chase, Pfizer, Johnson & Johnson, and so on. If they dipped a few bucks below a certain average, I’d dump, say, $400,000 into JPMorgan Chase—maybe 10,000 shares at $40 each, just eyeballing it. If that stock climbed by $4, that's $44 per share times 10,000, which equals $440,000. Sell it, cover the fees, and boom—nice profit. Imagine if you actually had inside information...
Basically, a human being can't track a hundred different things at once. You get results when you lock in on something and give it everything you've got.

So, if you want to turn a little bit of money into something massive, you need to find a niche where you have a knack, work your tail off to become one of the best in that field, and use that edge to make up for your small starting capital.

All these self-proclaimed experts and market wizards love preaching diversification to the masses. It’s just like preachers repeating the same old stories until people accept them as gospel, even when it's nothing but a fairy tale. The end result? Those "experts" get fat off the land, much like they profit from regular folks who are so desperate to diversify—and too lazy to actually learn how to focus—that they dump their cash into mutual funds just so those "pros" can manage it for them.

It's such a cliché. In the US, there are more investment funds than there are actual companies traded on all the exchanges... all because average investors prefer handing their money over to someone else to babysit.

And then you hear these experts bragging about how their funds averaged a 20% return... blah, blah, blah. They just drone on about averages. But averages are for average investors.

If you actually want to achieve something, you have to be an above-average investor and take direct control of your own capital. No one looks after a child better than a parent (at least, that's how it should work). Similarly, no one is going to care about your money more than you do. Everyone else is just looking for their cut.

Learn the rules of the game, pick a lane, and trust your own instincts...

Put in the work for a while and master the mechanics of the financial world. If you don't, you won't have anything left of that $20,000 you started with. It would be like trying to raise a puppy without knowing a single thing about nutrition, only to end up feeding it something that makes it sick or causes it to vomit.

I agree that you shouldn't put all your eggs in one basket, but that isn't what traditional diversification really means. Investing in yourself, your own financial education, and a specific asset is like placing your eggs in two different baskets instead... a form of hedging.

rustytrucker8 said:Check this out so we don't keep repeating ourselves:

Thanks for the links! I just added them all to my favorites on Voyager...🙂

Alright, let's get to work... loading up now. Honestly, I've never had much trouble getting started. From what I can gather, the trick is to focus on maybe two or three specific areas until you really get the hang of things, rather than spreading yourself too thin. To start off, it seems smart to dump most of it into some solid savings vehicles—for instance, a high-yield housing fund sounds pretty incredible at an 11-12% annual return. I might be taking a bit of a risk by "locking myself in" for such a long stretch, but hey, I need to learn how to walk before I can run.

P.S. Forgive me if I say something totally clueless here: I have a Master's in molecular biology, but when it comes to economics, I'm basically a complete novice.

My mother turns 46 at the end of July. She works as a cleaner earning about $667 and has 27 years of service under her belt. When she finally retires, she’ll be lucky if she pulls in $333. Since she’s under the old system—the first tier—my partner (who is currently on disability) and I have been brainstorming ways to bolster her future pension. Our neighbor is currently paying into a life insurance policy, so we considered doing the same, but we aren't sure if that's truly the most effective route.

Here are the numbers:

We would look at a 10-year term, contributing $2000 annually. That means we’d hand them $20000 in total. Roughly speaking, how much would they pay us out at the end of that term? I don't need exact figures, just a ballpark idea.

What if we just put that money into Bank of America and saved it there...

Or perhaps a housing savings account...

Or maybe those mutual funds...

To be honest, we are completely out of our element here. We want to know what the best and safest option is. 😍

You really ought to give some serious thought to setting up a voluntary retirement fund. If you tuck away about $1.75 a year—which breaks down to roughly $143 monthly—the government actually sweetens the deal with a 25% incentive match ($417). That means every single year, you’re looking at $2083 landing in your account, plus whatever interest the fund generates. It’s like planting a seed that grows twice as fast because of that extra help. By the time ten years have rolled by, a woman could be sitting on a balance of 62 $167 plus the fund's returns. And remember, those returns are calculated on both your own contributions AND that government boost. Usually, the market performance is solid enough to at least outpace inflation, if not beat it entirely.

electricsailor13 said:They’d take a lump sum over a 10-year span, then you’d pay in $2000 annually. So we give them $20000. How much would they actually pay us back once that term ends? I don't need exact math, just a ballpark figure.

Roughly speaking, a 10-year life insurance plan isn't worth the effort. The payout will likely be less than what you put in, and even if there's a profit, it's questionable at best.
Forget about banks; inflation will eat whatever interest you make alive and well.
A high-yield savings account or CD is a safe bet with an effective rate around 7% annually, but those rates drop the longer you lock your money away. Not recommended for anything over five years.
"Some mutual funds" offer the highest long-term returns, but that comes with the most risk.
401(k)s, Social Security, yields, tax breaks... your mother won't be using those. You can only pull out 30% at maturity; the rest is paid as an annuity. That's the whole point of that kind of saving—retirement.

My suggestion:
$667 Put some in life insurance until you're 65 (maybe Mercury)
$667 Put some in a 401(k) (like Vanguard)
$667 Put some in a fund (like Goldman Sachs or similar)

Depending on whether you're playing it safe or gambling, you can adjust those amounts accordingly.

Gerald Thomas11 said:Look, let's be blunt: sticking with life insurance for ten years just doesn't make sense for your life. There's a good chance the payout won't even cover what you put in, and honestly, the returns are questionable at best.
Forget about keeping money in a bank; inflation will eat those interest rates alive.
A housing savings account is a safe bet, yielding an effective rate—once you factor in Social Security adjustments—of around 7% annually, but the APY drops the longer you stay in it. I wouldn't recommend it for anything longer than five years.
"Some mutual funds out there" offer the highest long-term gains, but yeah, that comes with the biggest risks.
As for a 401(k)... well, between the yields and the tax breaks, your mother isn't going to be using those anyway. You can only pull out 30% when it matures, and the rest is paid as an annuity. That’s the whole point of that kind of saving—it's for retirement.

My suggestion:
$667 Put some into life insurance until you hit 65 (maybe through Mercury)
$667 Put some into a 401(k) (like Vanguard)
$667 Put some into a fund (like Goldman Sachs or an index fund)

Depending on whether you're a total safety seeker or a high-stakes gambler, you can dial these amounts up or down accordingly.

Yes, diversification is absolutely mandatory, but my advice would be to max out your Social Security benefits via housing savings or your 401(k). Personally, I suggest Apollo III because they charge a single upfront fee, whereas the Federal Reserve options might look cheaper on paper with lower entry fees, but once you crunch all the numbers and subtract everything, Apollo III ends up being much more profitable if you're investing optimal amounts.

Gerald Thomas11 said:Roughly speaking, life isn't really worth grinding away at this for ten years. There's a good chance the guaranteed payout will end up being less than what you actually put in, and even the potential returns are questionable.
Forget about the banks; inflation is just going to eat your interest alive.
A home savings account is a safe bet with an effective rate—including tax advantages—around 7% annually, but that APR drops the longer you keep the money there, so I wouldn't recommend it for anything longer than five years.
"Some mutual funds out there" offer the highest long-term gains, but that’s where the risk hits its peak, too.
That 401(k) stuff... hmm. Between the yields and the tax breaks, your mom isn't exactly going to be using those. You can only pull out 30% when it matures; the rest comes to you as an annuity. That’s the whole point of that kind of saving, though—retirement.

My suggestion:
$667 put some into life insurance until you hit 65 (maybe with Mercury)
$667 put some into a 401(k) (like Vanguard)
$667 put some into a fund (like Goldman Sachs or an index fund)

Depending on whether you're a cautious type or a bit of a gambler, you can dial those amounts up or down.

Since we're talking retirement—actual long-term saving—instead of just dumping $2,000 into a standard life insurance policy, there's a pretty decent setup through Mercury involving Vanguard. They have a way where 10% is the guaranteed portion, and the rest gets funneled into funds. You still get the tax perks and all the usual benefits of a standard life policy, but the final return is usually a few percentage points higher. And honestly? If you aren't saving until age 65, it's definitely not worth it. That's just the truth of it.
As for mutual funds, I think it would be smart to split the amount between Goldman Sachs and a solid index fund.

Alright, everyone, I am reaching out because I could really use some collective wisdom here.
I am currently thirty years old, and I have reached a point where I feel a profound necessity to begin setting aside some sort of savings—something intended to mature over the next three decades or so. To be perfectly honest, those third-pillar retirement accounts just don't hold much appeal for me, and I find the idea of high-premium insurance policies quite daunting; my current salary isn't exactly substantial, so committing to a heavy monthly obligation feels incredibly risky. (I say this with a bit of caution, having watched my parents struggle after they tried to fund their own insurance policies; things went south with their employment, they couldn't keep up with the premiums, and then they were hit with these terrifying notices demanding they either pay everything upfront or lose every cent they had already put in. They simply didn't have the cash on hand at that moment, and they ended up losing about $1,500 down the drain.)
What I am truly looking for—given that I occasionally receive some extra income a few times a year—is a flexible way to save where I can deposit larger sums whenever I have a windfall, while still contributing small, manageable amounts each month. Essentially, I want to build something incrementally without being forced into a rigid structure. Does such an option even exist here in the States?
Thank you so much.

Look, try a CD. Or just spend a year saving up to see what you can actually afford to put away once a month. Keep that extra cushion on the side to cover your payments if things get hairy—just make sure you don't touch it for anything else.

I’m in pretty much the same boat! Since my income fluctuates and I occasionally pull in some extra cash on top of my regular paycheck, sticking to a rigid monthly contribution just doesn't work for me either. I eventually decided to dive into mutual funds. At first, I split my money across three different funds, but then—admittedly a bit impatiently—I ended up dumping everything into a single equity fund. I started about six months ago, and right now I'm sitting at roughly a 6.5% nominal gain, though if I were to cash out today, it would be closer to 4.5% once you factor in those exit fees. Of course, we're currently in one of those tricky periods where most funds are seeing a dip.
So, look, there is definitely risk involved since a fund can lose value, but honestly, I haven't seen a single one here in the States actually go bust. They all seem to weather the storm and bounce back into the green eventually. Plus, there's the simple logic that if you don't have the capital to spare, you just don't invest—you aren't losing anything by staying on the sidelines! Also, liquidity isn't a huge issue; you can withdraw your money whenever you need to. It usually takes maybe two or three days to hit your account, even though the legal limit is a week.

wanderingscout13 said:Same deal here. I get extra cash hits from time to time outside my regular paycheck, so sticking to a fixed monthly amount doesn't work for me either. I went with mutual funds. Started by splitting the cash between three different funds, then got impatient and dumped everything into one equity fund. Been at it for about six months now. Right now, I’m up roughly 6.5% on paper, or 4.5% if I cashed out today since they hit you with an exit fee. But honestly, things are rough right now—most funds are dipping.
So, yeah, there's risk because a fund can tank, but so far, none of the big ones in the States have actually gone belly up. They all eventually bounce back after a bad stretch and end up in the green. Plus, if you don't have the cash to spare, you just don't invest. You aren't losing anything by sitting on the sidelines. And you can pull your money whenever you feel like it; it usually takes a couple of days to hit your account, though legally they've got a week.

Look, I'm pretty deep into these investment funds, but I wouldn't tell anyone to jump in unless they're ready to actually study the ropes and check their accounts at least once a week.