At this point, we've talked about five different places you can keep your money! Let's use the most optimistic (AKA highest!) return, and compare them! (Note: PY = per year)
| Asset | Return | Use Case |
|---|---|---|
| Cash | 0.90% PY | Emergency fund, <1 year savings |
| Short Term Investments | 1.00% PY | 2-5 years savings |
| Bonds | 5.00% PY | 2-5 years savings |
| Stocks | 10.00% PY | 15+ years savings |
| Tax Advantaged Accounts (invested in stocks) | 10.00% PY + Tax Advantage | 15+ years savings |
| Retirement Employer Match | 100.00%*!! 10.00% PY + Tax Advantage | 15+ years savings |
*If you have a full match (aka dollar-for-dollar): for every dollar you put in, your employer will put a dollar in! But only up to the set limit.
Try it out and we'll compare them all! Keep in mind that time period less than 15 years are not recommended for stock investments.
We won't include the employer match at 100.0% because it's a one time 100% return, then it grows in your tax advantaged account just like other contributions.
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Years