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Ways to Let Savings and Wealth Grow

Ways to Let Savings & Wealth Grow as a horse groom

This is the second post from our new series The HorseGrooms’ Guide to Finance with Emmy Sobieski, CFA. Saving for retirement or unexpected expenses is possible as a horse groom.

1. Understand savings = income – expenses – debt.  

If you paid off ALL your debt, including credit cards, mortgages, car loans, and other loans, that would be your actual savings. But for our purposes, consider savings if you paid off all your credit cards.

Read other articles in this series on budgeting to maximize your savings.

2. Read financial news

Let me tell you a secret. In all my years on Wall Street, I never read the Wall Street Journal. Ever. I find it hard to read and time-consuming. Yet I ran the #1 fund in the world.  


  • If you don’t like a certain style of writing, don’t let it stop you from learning!  
  • Sites I like include Investopedia, Seeking Alpha and Yahoo Finance. You can also learn a lot on the investing sections of Quora and Reddit.  
  • Make sure you are learning and adding to your knowledge… Don’t keep scrolling endlessly or wasting time.  And don’t believe all you read. It’s mostly opinion.
  • Subscribe to free newsletters. Start with Jesse Felder and John Hussman (skim his at first, as they can be dense), and you can subscribe to or follow my Twitter List of Investing Experts here. I write a free newsletter too, called $100M Careers.

3. CDs – one savings path

CDs are called certificate of deposit and you can get these at a local bank. Most of the time, they pay you higher interest rates than straight savings accounts.  

NORMALLY, the longer banks lock up your money, the more they pay you. Recently, regional banks have been losing deposits, so they need deposits. So they have been paying MORE for lower time periods like 3 months. This is partly because they are desperate to attract deposits now, and partly because they are betting that things will settle down and they don’t want to be locked into paying you high interest rates for 3 years. Pay attention to financial news so you can take advantage of these moments where you can get high interest for locking your money up for 3 months.

CDs at banks are FDIC insured up to $250K, so you should be safe, but do your own research and be sure it is an FDIC insured bank and not an online “Fintech” or shadow bank.  Look for FDIC insured on the website and also check on FDIC’s website.  

Figure out what your flexibility is worth because the penalties for early withdrawal will likely eat up all your additional earnings and then some!

4. Money Market Funds – another savings path

When Silicon Valley Bank collapsed, followed by several other large bank failures, depositors (people and companies with money deposited in the banks) moved their money to the large banks (JP Morgan, BofA, Wells Fargo, etc) and into Money Market Funds at brokerage accounts.

This trend didn’t start with the bank collapse, but the collapse accelerated it.

Whenever I think about putting money in a CD or savings, I compare the rates with money market funds. I wasn’t the only one! At 1% for a money market vs 0.5% for a bank, it’s not worth the trouble of moving the money. So banks got lazy (and greedy). At 5% for a money market fund vs 1% for a bank, now that’s real money, and people and companies started moving money out of banks and into money market funds.

What is a money market fund?

The same way an ETF (Exchange Traded Fund) or Mutual Fund invests in stocks and bonds, money market funds should invest in assets that are easily exchanged into cash (thus money market vs stock market vs bond market). Money market funds are so close to cash with a small return, that when they go “bad” it is called “breaking the buck” because they should trade at $1, like cash, and give you some interest payments for your investment.


After years of low interest rates, money market funds which historically invested in short term government bonds (called T-bills or treasury bills) at near zero rates, weren’t attracting investors with these low rates. So these funds started investing in commercial paper (loans to businesses which are less likely to pay back than the government), and when markets get nervous about the economy, these money market funds would “break the buck”… all of a sudden, they are not good savings vehicles.

What to check?

Make sure the money market fund you invest in only holds GOVERNMENT short term paper, ie T-Bills. Not T-Notes (medium term), or T-Bonds (long term – 20-30 years) both of which can go down when interest rates or market nerves (risk) rises.

5. ETFs > Mutual Funds (tax efficiency)

Let’s say you have 3 months of savings in CDs or Money market funds, then what?

First, HUGE congrats on being financially sound!

Depending on your age and risk tolerance (which are related, but also other factors like personality fit in here too), you may want some money in the stock market. I do recommend learning about investing in individual stocks, but with less than 20% of what you invest in the market.

Get the majority of your stock market exposure through ETFs. A solid one is the S&P 500 ETF, which are offered by Vanguard and Fidelity. That is the largest 500 public companies in the US market. Larger companies are less likely to go bankrupt than smaller ones, so it is a nice steady way to participate in the stock market.  

But some years the S&P goes down by 20% or more, so only put money in that you plan to keep in for years.  Determine (Hussman is good on this) where markets are headed and if it is a good time to invest (this is called paying attention to the Macro).

Mutual Funds vs ETFs – A question of tax efficiency

Early in my life, I watched people move away from friends for better taxes and swore not to live my life based on taxes. But if there is no difference, why give extra money to the government? This is the situation with an S&P mutual fund vs ETF.  

ETFs are more tax efficient because ETFs tend to distribute only what they must, i.e. dividends and interest, whereas Mutual Funds generate capital gains by selling shares of one stock to get into another.  

Then you have to pay taxes on capital gains even before you personally sold the mutual fund.  Investopedia explains the tax differences between holding mutual funds vs ETFs here in more detail.  Suffice it to say, ETFs are the most tax efficient way to own the stock market.  Then check the “load” or fees, and go for one with the lowest fees.  Usually that will be Fidelity, Vanguard or Schwab.

The other great feature of ETFs is they have very low investment minimums that will work for grooms to invest a little at a time.

This is NOT a financial, legal, tax, or investment advice.

It is not advice. Why isn’t it advice? First, I don’t have the licenses necessary to advise you. Second, I don’t know your specific situation, which I would need to know in order to advise you (if I had the licenses, which I do not).  

Whenever someone gives you advice, ask yourself these two questions above: do they have the credentials, and do they know your specifics? If either answer is no, treat their advice like a starting point of learning, and not as advice.

Let these blogs serve as a starting point in your education, not an end answer. Only you can find your answers to your specific situation.

June 27, 2023

Emmy Sobieski 🇺🇸

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