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- I always dreamed of visiting Italy and after years of saving I finally had enough.
- But when the pandemic hit, I postponed my trip and my travel funds were kept in a high-yield savings account.
- I thought I could earn more by investing in the market because interest rates are low.
For most of my life I have dreamed of going to Italy. When I was a kid, my dad showed me a slideshow (kind of like an old carousel) of his two years of church ministry and business trips there. I was fascinated by the sculptures, frescoes and breathtaking architecture. I read Anguish and Ecstasy and studied the Renaissance of European history in my sophomore year of high school. I was totally hooked. Italy was at the top of my bucket list.
I was 35 when I actually started saving for travel. At the time, my family was in great financial straits, but one day I looked around and realized I had to start saving money for this long-standing goal. , I would die dreaming of Italy one day, but never went. So I found an old coffee tin, put some change in it and labeled it “Italian Foundation”.
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Soon after, I moved to Texas and got a new, more stable job. Things started to pick up financially, and a few years after the first coin was in the coffee can, I had about $1,200 and nearly enough airline and hotel deals to get my husband and I to Italy. I was able to get my points.
By this time, my Italian funds had moved from coffee cans to online high-yield savings accounts. It was earning the highest interest rate I could find for a savings account at the time – a whopping 1.05%.
An itinerary was planned, dates were selected, and childcare arranged. Then came the pandemic.
Wanting to earn more, I transferred my travel money to the stock market.
When news broke that Italy had very low COVID-19 cases, my husband and I offered to travel in hopes of making it in 2021. Before getting used to traveling abroad.
While I continued to sit in my tired wanderlust, I watched the stock market soar to unprecedented levels. My IRA grew exponentially, but my Italian funds were sadly unused in my savings account.
Then came the financial FOMO. That way, once the pandemic calms down, I’ll have a lot more money to spend on gelato. It made perfect sense at the time, but I soon came to realize how short-sighted that decision was.
I transferred the contents of my high-yield savings account to a brokerage account and bought some stocks and ETFs that had surged during the pandemic. Tesla, Pinterest and his ARK fund focused on technology. (I’m sick as I write this.)
I lost my money when the stock market started to crash
As COVID-19 restrictions began to ease, I started researching flights and hotels to plan my trip again. But when I checked my brokerage account, I now had less than half the money I started with. Tech stocks crashed after the pandemic. I put most of my savings there. Between February 2021 and October 2022, I lost $665. Plenty of gelato.
Jennifer Sisson
I made the rookie mistake of investing short-term savings in long-term savings vehicles. I was raised by options trading parents and a personal finance writer by day job, so there is no excuse for this. I knew better than to invest vacation money, money I knew I would spend in the next 2-3 years at most, in growth stocks designed to last at least 5 years. I made hasty decisions based on two emotions that should never be listened to when investing: greed and fear.
I am now either selling my securities (which I really believe will do well in the next few years) to cut my losses or the Italian funds will decline as the stock market retreats further in the face of the looming recession We are faced with the unpleasant choice of seeing the.
Despite rising interest rates, so-called high yield savings accounts look only marginally more attractive than they did two years ago. The same online bank I was using now offers him a 2.7% interest rate on savings, but with the 8% inflation we’ve seen so far this year, some of these gains are small. It is
But a high-yield savings account has one important advantage. In other words, you won’t lose any money. You may not get a double-digit return, but you can’t lose either. And not losing is far more important than winning for short-term savings.
Despite the modest return, I will definitely use a high-yield savings account for all future Italian savings.
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