Where Do We Park the Cash?

Once my wife and I got rolling with our savings plan, as some of you have been following along in my previous posts, funds started to accumulate pretty quickly. Our goal was to live on two paychecks a month, and save $500 monthly from those two checks. This also meant that on the two occasions in which I received a third paycheck in one month (I get 26 checks annually), we would save that entire check. This would allow us to save just over $12,000 per year. 

We started down this savings path just over a year ago, in July of 2018.  We had a little bit of savings to start with (around $6,000), and I received a vacation time payout from my previous job. We also enjoyed seeing our money accumulate and became pretty aggressive with transferring funds to savings whenever we had a little bit extra to transfer over, even if it was just $50. I had the opportunity to teach as an adjunct instructor at a local community college, which I treated as a side hustle and transferred 100% of those funds towards our savings. A little over a year later, our little fund has risen to about $35,000.

As I have made pretty clear on this blog, our goal is to save towards buying an investment property. Meanwhile, we had a decision to make. Where do we park the money? Because we were actively looking at real estate, I didn’t have the option of going to a CD, as I needed to remain pretty liquid. The interest rates for savings accounts are a joke, paying anywhere from .05% to .25%. I had a long stint in my yesteryears in which I was investing/trading, so I decided to focus on what I thought were “safe” stocks to park our money until we had an offer accepted. 

Here’s how that portfolio has worked out:

As you can see, we did a little better than the banks by earning 2.28% on our investments, but definitely not enough to justify the risk we took by being in this roller coaster of a market over the past few months (I still have nightmares about December, 2018). We recently got very close to having an offer accepted on a house, and I jumped the gun and cashed out on all positions except KHC and GE, which I believe still have some ground to gain in the next few months.

In a future post, I will discuss how I make my decisions to invest in these individual stocks by using simple fundamental analysis.

So, what do you think about what we have been doing? What would you have done instead with the money while you wait to get an offer accepted on an investment property?