“I Have Some Savings. How Do I Invest It?”

You’re saving and cash is accumulating in your bank account. You know it shouldn’t just be sitting there, losing value to inflation. And that the alternative — what you need to start doing — is investing.

But investing is intimidating. The financial world is rife with gobbledygook — so many types of accounts, assets, taxes, and so on.

Here’s a practical cheatsheet for someone who’s brand new to investing and doesn’t know where to start, with a few of my opinions along the way.

(Think of this as a jumping-off point — I want to keep this short, but lean on your favorite AI tool to dive deeper or to walk through any specific steps.)

The short version

Keep only a small amount in your checking account. Just 1-2 months of living expenses, plus a small cushion for surprises.
Open a brokerage account at a brokerage like Fidelity or Schwab. Takes about fifteen minutes.
Move three months of living expenses plus anything you might need for an upcoming purchase into a money market fund there. Similar to a savings account, but with a better interest rate.
Buy VTI with the leftovers — this is the entire US stock market bundled into one asset. The easy conventional move for a young person is putting 100% of your investments (everything that’s not in cash or MMFs) into VTI. (I also like bitcoin and gold — more on that below.)
Open a Roth IRA too, and max it out if you can afford to — especially if you don’t have a 401(k). Just don’t expect to access that money for a long time.
Don’t touch it. Invest more as consistently as you’re able. Otherwise, stick to the plan, and try not to sell anything.

That’s it in a nutshell. More detail and some other thoughts below:

Accounts

Here’s an overview of different types of accounts, ordered from most liquid to least liquid.

(Liquidity refers to how quickly assets can be converted into cash that you can use. E.g., a house is illiquid, since it can take months to sell it and get expendable cash in your bank account. Stocks, on the other hand, are liquid, since you can sell them quickly online.)

Bank accounts

Checking account — this is your regular bank account for organizing short-term cash flows. Keep enough cash here to avoid it accidentally running out of money, but most surplus should go elsewhere (see below).
Savings account — what’s the rate at your bank? Probably low. Probably better to do a money market fund (MMF) in the brokerage account instead (see below).

Investment accounts

Brokerage account — e.g. at Fidelity or Schwab. Unlike a checking or savings account, which can only hold cash, a brokerage account can hold liquid investment assets (securities) like stocks and bonds.
- A note on margin — I’d set it up “with margin” and check the box saying you’re a knowledgeable investor, so they allow it — that lets you borrow cash against the account fast in an emergency. Not a big deal either way.
Retirement accounts — IRA, Roth IRA, 401(k), Roth 401(k), and more. These are confusing. Basically, the government lets everyone set up certain special accounts with tax advantages to support retirement (or education or other aims), with rules around when and how much you can put in and take out. Anyone can set up IRAs or Roth IRAs. 401(k)s are provided through employers. Hold long-term investments in these, since they have a long time horizon until retirement.
- Roth vs. traditional — affects whether your money is taxed before you fund the account (Roth) or when you withdraw from the account (traditional). Roth is often better when you’re younger; you’re probably in the lowest tax bracket you’ll ever be in, so it’s better to pay the taxes now and not have to worry about it later (when your tax rate will likely be higher).
- Limits — up to $7,000 across your Roth and traditional IRAs in 2025. (Be sure to look up the current rules — higher incomes phase out of being able to contribute to a Roth.)
- Benefits — the long-term tax savings are immense if you start early.

Assets

Here’s a list of different types of assets you can hold in order from most liquid and stable (shorter-term, more accessible, lower potential return) to most illiquid and volatile (longer-term, less accessible, higher potential return):

Cash and equivalents

Cash — loses a significant amount of its value every year thanks to inflation, which I suspect is much worse than the official numbers admit. Avoid keeping long-term savings in cash.
- How much — one to two months of expenses in checking, plus a small cushion for unexpected costs. Anything beyond that is just sitting there losing value.
Money market fund (MMF) — basically a high-yield savings account that lives in your brokerage account. A good one you can buy in a brokerage account at Fidelity is SPAXX (or SWVXX at Schwab), which is currently yielding 4.39% annually (as of Sep ‘25).
- How much — about 3 months of living expenses, plus most of anything you’ll need in the next couple of years, e.g., for any potential big purchases like a house or car.
- How to buy — MMFs are technically mutual funds (though not what people mean when they say “mutual fund”), so you may have to pick “mutual fund” instead of “equity” in the order screen.
- Why it’s safe — minimal risk of losing any value (but note that it isn’t FDIC-insured), and you can sell and have the cash back in your checking account within a few days.

Investments

I’d recommend migrating everything that isn’t in cash or MMFs into actual investments. You can do this gradually, e.g., start by investing 20-30% of your total investment funds, then put in another 15-20% every three months.

Some good investment options:

Stock market ETF — I use VTI, the total US stock market. Ask an AI tool whether it’s a good investment; you’ll learn a lot.
- This lets you own a tiny sliver of all the major publicly traded corporations in the US (in proportion to their size).
- There are many comparable options, e.g., ETFs like VOO and ITOT that track the S&P 500.
- The easy conventional move for a young person is 100% VTI.
Individual positions — you can make more money owning individual stocks (or your own real estate, company, private equity, etc.), but you have to know what you’re doing.
Gold — valuable for thousands of years. Can’t be counterfeited and inflated like cash. If the stock market crashes, gold may go up. In that case, you can sell your gold for a lot and buy back into stocks for a little. This is why I like it.

A few ways to get gold exposure:
- ETF — IAU or a similar ticker, which you can buy and hold in your brokerage account.
- Online storage — sites that let you buy gold online and store it for you. Convenient, but they charge for it.
- Physical gold — high transaction costs, and you have to worry about storing it secretly and safely. I’d think of it as a multi-generational play.
Bitcoin — worth owning if you believe it’s becoming an international store of value on par with gold, and that governments, corporations, and individuals will keep stockpiling it. As of 2025, bitcoin’s market cap (the total value of all bitcoin combined) is around $2 trillion against gold’s $30 trillion — so to rival gold, bitcoin would have to increase 15–20x, implying $1M+ per coin. This is a crude analysis, but in my opinion it’s the right way to think about it.

I could be wrong. And to be fair, bitcoin is risky. It could end up at zero. There’s no institutional safety net: no FDIC, no recourse, and nobody to call if your funds are stolen or misplaced. It has fallen more than 70% from a high on several occasions. Own bitcoin with your eyes wide open.

A few ways to get bitcoin exposure:
- Bitcoin ETF — buy it inside your investment accounts at a low annual fee. I hold some IBIT in my 401(k).
- Coinbase — set up an account, link your checking account, and buy within a day or two.
- Direct custody — the bitcoin equivalent of owning physical gold. You’ll want to set up a dedicated thumb-drive-like device to hold your private “keys” (passwords for your bitcoin). More complexity and more responsibility, but at least you aren’t dependent on any institutions like you are with the other options.

Allocation

For a generic investment allocation (excluding your cash and cash equivalents), I’d recommend:

Gold — a small amount, say 10–20%, for stable diversification.
Bitcoin — 20–40%, or to the extent you believe in it and are willing to take a risk with something unconventional. Alternatively, put that money in something else you’re genuinely an expert in or believe in.
VTI — for the rest. Or, for all of it, if you don’t want to mess with gold or bitcoin.

Conventional financial advice says gold is boring and bitcoin is risky, and points you at stocks and bonds instead. What I’ve laid out is more concentrated and more volatile than a standard portfolio, and reflects my own read on inflation and debasement rather than any consensus. It isn’t right for everyone. Don’t adopt it off my post alone.

Philosophy

Buy and hold. Don’t make short-term trades unless you’re a trader. Every trade is an opportunity to lose money. The vast majority of active professional investors underperform a buy-and-hold strategy. Plus, trading is stressful.
Stick to the plan. Don’t panic, don’t get greedy. This is the hardest part and the most important one.
Volatility is not risk. Academic finance treats them as the same thing because volatility is a number that they can plug into their formulas, and risk isn’t. But risk isn’t volatility — it’s the unknowable probability of actually losing money. Don’t assume something is risky just because it’s volatile, or that something is safe just because its chart is recently flat.
When you have real conviction, make it count. Social events hand you maybe five to seven big macro opportunities in a lifetime — tech stocks after the dot-com bust, bank stocks after 2008, or bitcoin in the 2010s. If you think you might be living through such a moment, it’s worth stopping and thinking hard.

Disclosures

This is educational content reflecting my personal opinions — not investment, tax, or legal advice, and not a recommendation, offer, or solicitation to buy or sell any security. Nothing here is individualized; it doesn’t account for your goals, finances, time horizon, or taxes, and I don’t know your circumstances.

Investing involves risk, including loss of principal. Gold, bitcoin, and concentrated positions are volatile and are not suitable for everyone. Past performance doesn’t predict future results.

I hold positions in securities mentioned here, including VTI and IBIT, and may hold others. That’s a conflict of interest — weigh what I say accordingly.

These are my own views and not those of my employer. Figures are as of publication and go stale quickly; verify before acting. Talk to a professional who knows your actual situation.