So to be brief, I know the typical advice is short term savings for use within the next 5 years should be put into high yield savings or a CD ladder. However, does anyone view it differently for a HCOL area and a high income as well?
For reference, I'm in the Bay Area, CA. So far between my savings and taxable brokerage account (100% in stock index fund earmarked for downpayment) is about 100k, and it's split about 50/50. I only this year moved a lot from my checking into savings - about 50k (the savings account is new).
I understand we're in a bull market so that may color my thoughts on this, but if I'm able to save 50-70k per year, does it make sense to put it all into savings vs splitting it between savings and a brokerage account? In the bay area, I don't think I'll be able to afford a house on just my income alone so I wouldn't even think of buying until I'm married and hopefully have two good incomes to support the crazy mortgages here. If the market crashes, I figure housing prices would slump here as well so saving a portion of my down payment in a brokerage account doesn't actually seem unreasonable - granted, the stock market and housing prices may not fall by the same percentage but correlation generally goes toward one in a crash anyway.
I almost feel sitting on the sidelines that saving in a vehicle that doesn't generate much return year to year makes it hard to keep pace with escalating housing prices
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