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birb_cromble  5d ago (text post)   768 thread views

Weekly Finance Thread - 2026-08-01

A weekly thread to discuss financial matters - from personal all the way up to global.

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One common friction point that keeps coming up in these threads is something that I can't clearly name, but seems to be the friction between one person's perceived optimal behavior and another person's risk tolerance. One person will say that they are doing something, and another person will comment that the first poster is Doing It Wrong because they believe there is a more optimal path that they could take. It's a very binary thing that seems common in the Internet in general. I think it comes from a benevolent place, but it seems like it can push people off from the topic entirely as much as it can educate them.

I've been thinking about that lately because of events in my personal life. My partner is a fairly responsible saver, but she's not really investing. She's in the upper half of her age group for net worth and doesn't have any debt, but I worry that inflation is going to eat those savings over the long term. I've gently tried to get her to consider moving some of that money into funds over the years, but for her, it's entirely too much risk. I've not really pushed on it because what she's doing is better than doing nothing, and nothing is her alternative right now.

For somebody who has that extreme level of risk aversion, what options are there that beat a HYSA? Browbeating her into equities isn't going to fly.

On a similar topic, are there "non optimal" things that you do financially, but you do them anyway?

  1. I pay ahead on my mortgage, even though the interest rate is "only" 3.75%.
  2. I hold some dividend stocks and funds, and even commit the cardinal sin of holding them in a taxable brokerage account.
  3. I don't use credit cards outside of the bare minimum necessary to keep them active.

In all three cases, it's entirely a psychological thing for me, and I recognize this. In the first two in particular, it's still better than not doing anything at all

For somebody who has that extreme level of risk aversion, what options are there that beat a HYSA? Browbeating her into equities isn't going to fly.

Ibonds? $10k/person/year limit, indexed directly to inflation + a fixed rate, state tax exempt, 30 year term, and 100% safe (well, unless the entire US burns to the ground, in which case nothing would be safe). The only "risk" is that you can't cash them for the initial holding period, and lose the latest 3 months of interest if you cash them within 1-5 years of purchase. Some years, it won't beat an HYSA (current inflation + fixed rate is 4.26%, so if you'd had a 4.5% HYSA earlier this year that would've been higher), but it will always beat inflation by the fixed rate.

On a similar topic, are there "non optimal" things that you do financially, but you do them anyway?

I have some very silly auto-invest/auto-transfers set up, just because I like the flow a bit better, and in some cases I've set them up so they can continue for the future instead of just investing the cash on hand now and then setting up the auto-system.

Related, but I tend to use different accounts as "buckets", even if one of them is giving me less of a rate than, say, an MMF would -- or if one MMF is giving a slightly worse rate than another.

Related related, but I use NFCU's savings account (earning dimes) over a different HYSA/MMF. Will I ever need that immediate liquidity? No, but I like having it there all the same.

The other one is that I'll actually keep a few index ETFs (at around $100) in an account that I also have a mutual fund in. I like being able to log in, see what it's at throughout the day without having to look up the ticker. So for instance, if I'm in an international mutual fund, I'll also have ~$100 in VXUS.

So for instance, if I'm in an international mutual fund, I'll also have ~$100 in VXUS.

Just curious, why not hold VXUS instead of the mutual fund?

Replying again because I found this post that sums up my feelings on MFs vs ETFs:

For me the "ritual" goes something like this.

  1. On Saturday morning, take a look at the finances and realize you want to allocate $10K into this fund.
  2. Ah, but markets are closed, so write it down as a todo for Monday sometime.
  3. On Monday, take a break from the work day to execute this. Spend another 5 minutes double-checking, because it's been a couple of days since Saturday and some details have faded.
  4. Log into the account, go to the buy page. Watch the clever little Wall Street robots getting it on on the quote page. Briefly reflect on the incentive structure of modern capitalism.
  5. Check the premium/discount. Wonder if it means you're taking a 0.2% haircut right off the bat. Check the history. Oh well, it seems to be about average. Hopefully I'll get it back when I sell.
  6. Pick a number of shares and a limit price that's slightly above the Ask so your order gets executed quickly so you can get back to work. But not too much so you don't take it on the chin if an ETF share is temporarily under construction.
  7. Get startled by the yellow warning box. What did I do wrong? Realize that it's just Schwab telling you that the order may be executable. Well duh, I'm here to buy something not lay traps.
  8. Place the order and refresh a couple of times to see it executed. Notice that the price has inexplicably crawled up to right under your limit price; a clever little robot probably got you. Secretly hope that the robot's master discovers a hitherto unknown seafood allergy at the dinner you just paid for. Immediately feel a little guilty; seafood allergies are no fun.
  9. Realize that the clever little robot exposed a little mistake in your calculation: you rounded the limit price up. Again. Can never get those right. So now you owe Schwab a couple of bucks on your no-margin account. Set up a transfer and hope it makes it in time. 9.5, optional) Giggle as you recall asif408's apt description of the alternative, "cash turds leftover". Ain't that right.
  10. Log out, with that vague feeling of negotiation skill inadequacy that you always get after interacting with your car dealership. For the rest of the day, casually check your portfolio app to see how auspicious your choice of trading break time was.

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