Episode 3 of 6
The $45k Cash Problem
Dan and Dana's $45k savings account earns $180/year at 0.4%. They model three deployment options: high-yield savings at 4.8%, a taxable brokerage with a 70/30 allocation, or paying down their $480k mortgage at 5.9%.
Key Insight
Moving $45k from 0.4% to 4.8% HYS earns an extra $1,980/year risk-free. Investing in a taxable brokerage at an expected 8% yields $3,420/year but with volatility. Paying down the 5.9% mortgage is a guaranteed $2,655/year return. The mortgage payoff wins on a risk-adjusted basis for money they may need within 5 years.
Model This Scenario