Save like the wealthy do
If your savings has been fully invested since fully invested since the 2008 Global Financial Crisis, you’re sitting pretty — an investor with only 10% or 20% of their portfolio sitting in cash, which continues to lose its value, would have built more wealth than a non-investor.
When hard times come, there’s value in not selling assets at a loss, and having the ability to load up on highly-depressed assets.
Recent data suggests High Net Worth Individuals (HNWIs), or those with more than $1 million in liquid assets, keep an average of just 15% of their wealth in cash and cash-like instruments. These can include treasury bonds, certificates of deposit (CDs) or money market funds. With these secure investments, HNWIs can ride the waves of the market. After all, are a certainty, but timing these events is near-impossible.
CDs can be great for investors who want to park their cash for periods of time, but there are often restrictions with respect to pulling capital out early, and other key factors to consider with such products.
If you want to make your accessible cash work for you, consider a no-fee checking and savings account with SoFi. SoFi emphasizes high returns, low fees, and convenience, offering competitive rates on daily accounts to help you grow your savings.
Many Americans might overlook their daily accounts, only to find that their savings aren’t where they want them to be. Instead of losing out, you can earn up to 4.60% APY on savings balances – which is up to 10x the national average — and 0.50% APY on checking balances.
With SoFi, you can enjoy no-fee overdraft protection, early paycheck deposits and access to over 55,000 ATMs within the Allpoint network.
Speaking of deposits, sign up now and get a bonus up to $300 for setting up direct deposit.
Economic downturns are inevitable, and smart investors diversify their portfolio and keep their excess wealth in safe investments to ensure they can weather the storms. When a drawdown happens, having capital set aside is important. Stashing cash away in CDs, high-yield savings accounts, and money market funds are all great options for the cautious investor.
You can check out Moneywise’s top picks for Best High-Yield Savings Accounts of 2024 to compare your options and start building your cash reserve more efficiently.
