How to manage $50k in Savings?
In today's market being paid 1% for risk and free access money is pretty darn good.  If 50k is what you feel comfortable with an emergency fund, then you are doing a fine enough job. To me that is a lot to keep in an emergency fund, however several factors play into this: We both drive older cars, so I also keep enough money around to replace one of them.   Considering all that I keep a specific amount in savings that for me earns .89%.  Some of that is kept in our checking accounts which earns nothing. You have to go through some analysis of your own situation and keep that amount where it is. If that amount is less than 50K, you have some money to play with.  Here are some options:
For a young person with good income, 50k sitting in a savings account earning nothing is really bad. You're losing money because of inflation, and losing on the growth potential of investing. Please rethink your aversion to retirement accounts. You will make more money in the long run through lower taxes by taking advantage of these accounts. At a minimum, make a Roth IRA contribution every year and max it out ($5500/yr right now). Time is of the essence! You have until April 15th to make your 2014 contribution! Equities (stocks) do very well in the long run. If you don't want to actively manage your portfolio, there is nothing wrong (and you could do a lot worse) than simply investing in a low-fee S&P 500 index fund. I keep several savings accounts. I use an online-only bank that makes it very easy to open a new account in about 2 minutes. I keep the following accounts: Emergency Fund with 2 months of expenses. I pretend this money doesn't even exist. But if something happened that I needed money right away, I can get it. 6 6-month term CDs, with one maturing every month, each with 1 month's worth of expenses. This way, every month, I'll have a CD that matures with the money I would need that month if I lose my job or some other emergency that prevents me from working. You won't make as much interest on the 6-month term, but you'll have cash every month if you need it. Goal-specific accounts: I keep an account that I make a 'car payment' into every month so I'll have a down-payment saved when I'm ready to buy a car, and I'm used to making a payment, so it's not an additional expense if I need a loan. I also keep a vacation account so when it's time to take the family to Disneyland, I know how much I can budget for the trip. General savings: The 'everything else' account. When I just NEED to buy a new LCD TV on Black Friday, that's where I go without touching my emergency funds. First, of course, I agree with the comments about paying down debt. Then reserve some of those savings as an emergency fund. After that, the default answer is to invest in an index fund as Mr Belford suggested, such as Vanguard's total stock market index fund, and leave it there forever. Even when the market tanks -- especially don't sell it when the market tanks! I might leave some cash in reserve so I can buy when the market corrects/tanks and stocks go on sale, but I'm paranoid that way. (Pick 5 random people and you'll hear 6 contradictory opinions on where the market will move soon.) I personally would just park it in the index fund. You just graduated; you have so many things you could spend your time on (building career, socializing, learning kickboxing and sailing and rock climbing and woodworking and intramural soccer and.....), and landlording has the potential to become a time sink. On the other hand, if you're really into landlording, why not. Just be aware it's a lot more complex than pay $50k down and collect $500 in easy profit each month. There's a lot of learning to do before jumping in. Try the Envelope Budgeting System. It is a pretty good system for managing your discretionary outflows. Also, be sure to pay yourself first. That means treat savings like an expense (mortgage, utilities, etc.) not an account you put money in when you have some left over. The problem is you NEVER seem to have anything leftover because most people's lifestyle adjusts to fit their income. The best way to do this is have the money automatically drafted each month without any action required on your part. An employer sponsored 401K is a great way to do this. "I'm still recommending that you go to a professional. However, I'm going to talk about what you should probably expect the professional to be telling you. These are generalities. It sounds like you're going to keep working for a while. (If nothing else, it'll stave off boredom.) If that's the case, and you don't touch that $1.4 million otherwise, you're pretty much set for retirement and never need to save another penny, and you can afford to treat your girl to a nice dinner on the rest of your income.  If you're going to buy expensive things, though - like California real estate and boats and fancy cars and college educations and small businesses - you can dip into that money but things will get trickier. If not, then it's a question of ""how do I structure my savings?"". A typical structure: Anywho. If you can research general principles in advance, you'll be better prepared." No one knows if the market is high right now.  To know that you would need to compare it to the future, not the past. If you put all your money in right now, you run the risk of putting it in at what turns out to be a bad time.  If you spread it out, you will for sure put some of it in at a bad time (either the stuff you put in now, or the stuff you put in later).  The strategy that, on average, will make you the most money is to put everything in now.  If your risk tolerance allows that (it sounds like it does) then I think going all in makes sense. There really aren't significant downsides to buying a ton at once.  You aren't going to move the needle on a big Vanguard fund with that amount and there isn't a tax consequence or anything to buying.  Of course, when you sell, you will need to pay capital gains tax on any gains, but that's a later chapter. The bigger consideration is to be smart right now about avoiding taxes.  If your income is low, max out your Roth IRAs.  If you need to you can later use that money for a house or you can pull the contribution part out at any time if you want without a penalty. Is a $50K buffer too much?  Normally I would say yes, it's excessive.  I have 5 rather expensive kids and I keep $20K in cash, which seems high, if anything.  However, if you are unemployed or your income isn't covering your expenses, then keeping a larger pot in cash makes good sense until your cash flow firms up.  Setting $50K or something close to that aside sounds a lot like something I would do in your shoes. BTW where are you finding a savings account that pays 2%? I recommend pulling up a retirement calculator and having an honest conversation about how long term savings works, and the power of compound interest. Just by playing around with the sliders on an online calculator, you can demonstrate how the early years are the most important. Depending on how much they make now and are considering saving, delaying 5-10 years can easily leave 6-7 figures on the table. If it's specifically a child or close family member, I recommend pulling up your retirement account. Talk with them about how you managed it, and how much you were putting in. Perhaps show them how much is the principal and how much is interest. If you did well, tell them how. If you didn't do as well as you liked, tell them what you would have done differently. Finally, discuss a bit of psychology. Even if they don't have a professional job and are making minimum wage, getting into the habit of saving makes it easier when they eventually make more. A couple of dollars a month isn't much, but getting into the habit makes it easier to save a couple hundred dollars a month later on. "How will 45K-60K ""end up in your pocket""?  Are you selling your home?  Where are you going to live?  You talk about moving to Arizona, what is so magical about that place? Congratulations on making a wise purchase.  Some people with new found money use it to correct past mistakes.  However, if they do not change their behavior they end up in the same situation just less them money they once had. While 50K income is respectable at your age, it is below the national average for households.  One factor in having a college education is those with them tend to experience shorter and fewer periods of unemployment especially for males.  Nothing will ever replace hustle, however.  I'd ask you to have a plan to raise your income.  Can you double it in 5 years?   You need to get rid of the revolving debt.  Do that out of current income.  No need to touch the house proceeds for something so small.  Shoot for 9 months. Then you need to get rid of the speeding fines and the vehicle loan.  That is a lot of vehicle for your income.  Again, I would do that out of current income or by selling the vehicle and moving to something more inline with your income.   As far as to moving or flipping foreclosures that is more of a question that has to do with your hopes and dreams.  Do you want to move your children every 3 years?  What if you move to Arizona and it turns out to be quite horrible?  You and your wife need to sit down and discuss what is best for your family." "I am in a different situation, because I earn more than I spend, but I have found that I need to make the money inaccessible if I want to really avoid spending it.  I used to just throw my paychecks into a high-yield savings account, but eventually the balance was large enough that a ""large purchase"" didn't seem like ""that much"" (because I would have had so much left in the account after the purchase).  It was way too easy for me to spend way too much. Now, I invest my savings automatically.  The obvious benefit is my money has a much higher growth rate than a simple savings account (especially with fed interest rates so low).  I invest most of my savings in 401(k)/IRA retirement accounts, where there are severe penalties for withdrawing prior to retirement age.  Then, I invest a significant portion to a regular brokerage account, where the money is invested in stock and bond funds.  This money is accessible within a few days of whenever I need it.  The remainder of my savings goes into a savings account as cash I can get to at any time.  All 3 accounts grow with every paycheck (market fluctuations aside).   This 3-tiered system helps me to categorize my savings as ""Never, ever touch"" (retirement accounts), ""Touch, only if I can wait 3 days and am willing to pay taxes"" (brokerage account), or ""touch whenever you need it, with no penalties"" (Savings account).  If my savings account grows too much, I'll move money from there to the brokerage account (where it has more growth potential).  The longer my money is invested in the brokerage accounts, the less taxes I'll need to pay when I sell/withdraw the funds, so that's even more incentive for me to keep those funds where they are. I have credit cards, so in my opinion, having to wait 3 days for funds from my investment account to become accessible is considered ""accessible in an emergency,"" because my credit cards can be used to cover a large purchase for 3 days, and as long as I pay it off within the grace period, there's no interest charged. tl;dr investing is probably the smartest way to both grow your money and prevent the urge to spend it right away.  My advice is to start with a 401(k) or IRA as soon as you can, since the younger you are, the more time until retirement that your money has to compound.  Investing $100 more a month can mean hundreds of thousands of additional dollars in your account when you're ready to retire." You will find lots of rules of thumb but there is no universal truth to how much you should save. There are factors you DO need to consider though: you should start as early as possible to set money aside for retirement. You should then use a retirement calculator to at least get an understanding of the amount you need to set aside each month to achieve the desired retirement income; your default should be not to spend money and only spend money when you must. Leisure, travel and eating out should come last after you have saved up; you should have funds for different terms. For example, my wife and I have an emergency fund for unexpected expenses or losses in income. The rule of thumb here generally is to have 3-6 months of salary saved up. A longer term fund should be created for larger expenses like buying a car or preparing the cashdown on a property. Finally, the retirement fund which should cover your needs after you have retired. Firstly, make sure annual income exceeds annual expenses. The difference is what you have available for saving.  Secondly, you should have tiers of savings. From most to least liquid (and least to most rewarding): The core of personal finance is managing the flow of money between these tiers to balance maximizing return on savings with budget constraints. For example, insurance effectively allows society to move money from savings to stocks and bonds. And a savings account lets the bank loan out a bit of your money to people buying assets like homes.  Note that the above set of accounts is just a template from which you should customize. You might want to add in an FSA or HSA, extra loan payments, or taxable brokerage accounts, depending on your cash flow, debt, and tax situation. Budget. Figure out how much money you need to keep for your own spending purposes, then figure out from that how much you can afford to move to longer term savings for youeself and/or the kid. Try it for a while, see if it works, adjust how much you can afford to save, repeat. (Actually, you want to further reduce the savings a bit until the emergency fund comes up to a level you feel comfortable at, then increase them to acceptable targets.) It's OK if you miss or reduce some deposits to the savings plans while you get the emergency fund up to a level you're comfortable at. If you don't feel you're saving enough after making these adjustments, you need to economize somewhere so you have more money to save, or make more money, or recalibrate your expectations. You can't get a gallon out of a quart container. Then buy an indexed ETF or mutual fund that tracks the S&amp;P 500 and leave your money there until you need it. If you can (there are restrictions for income, etc.), try and setup a retirement vehicle, such as a Roth IRA to get tax advantages. "First, two preliminaries, to address good points people made in comments. As AbraCadaver noted, before you move your $30k to something that might lose money, make sure you have enough cash to serve as an emergency fund in case you lose your income. Especially remember that big stock market crashes often go hand-in-hand with widespread layoffs. Also, you mentioned that you're maxed out in a 401k. As JoeTaxpayer hinted, this could very well already be invested in stocks, and, if it isn't, probably a big part of it should be. Regarding your $30k, you don't need to pay anybody. In general, fees and expenses can form a big drag on your investments, and it's good to avoid them as much as possible. In particular, especially with ""only"" $30k, it's unlikely that advisers can save you more than they cost. Also, all financial advisers have a cost: the ""free"" ones usually push you into investing in expensive funds that make them money at your expense. In that regard, keep in mind that, unlike a lawyer or a doctor, a financial adviser is not required by law to give advice that's in your best interest. When investing, there is a pretty short list of important considerations that you should keep in mind: (If anyone has any other points they think are similarly important, feel free to suggest an edit.) Practically speaking, I'd suggest investing in index funds. These are mutual funds that invest very broadly, in a ""passive"" way that doesn't spend a lot of effort (and money) trying to pick individual high-performing stocks or anything like that. Index funds provide a lot of diversification and tend to have low expense ratios. (Other, ""actively managed"" funds tend to be more expensive and often don't outperform index funds anyway.) If you're saving for retirement, there are even target date funds that are themselves composed of a small number of index funds (often domestic and international stocks and bonds), and will increase the proportion invested in bonds (safer) as they get closer to a target retirement date. See, for example the Vanguard Target Retirement 2045 fund. A fund like that one might be all you need if you are saving for retirement. Finally, you can invest online without paying any advisers. Not all companies are created equal, however; do your research. I personally highly recommend Vanguard, since they have a wide variety of no-load index funds and tend to have very low expense ratios. (No-load means you don't have to pay a fee to buy and sell.) Part of why they are inexpensive is that, unlike most financial companies, they are actually a cooperative owned by those who invest in their funds, so they don't need to try and milk a profit out of you. (Don't let that suggest that they're some ""small-potatoes hippie firm"", though: they're actually one of the largest.) I hope I helped. Keep posting if you have more questions!" As a matter of fact, I invest small sums in stable stocks every month (in fact, much lesser than the $50 you are talking about). More than the return on investment, I gained a lot of knowledge keeping track of my stocks and this now helps me pick my stocks better. And the portfolio is doing great too. So, it is a good idea to start small and invest regularly.