Putting money in Index Fund or keep in savings account

[Tate Meyhoff]

My wife and I are really excited to get going on our REI journey, with one problem. We currently have enough liquid cash to purchase and rehab one investment property using conventional financing. We would like to scale relatively quickly. I am tired of having our chunk of money sitting in a savings account that earns hardly any interest. Do any of you folks park your cash in Index Funds to try an maximize any gains? I know there are risks involved with the stock market, but traditionally S&P index funds are a very safe investment. I also know that any gains will have tax implications, which I am ok with knowing my money is actually growing. Anyways, just looking for any advice or first hand knowledge of any of you out there using this strategy over they typical savings accounts.

Thanks,

Tate

[Melissa S Vrobel]

@Tate Meyhoff.. I had the exact same thought myself! I am not afraid of risk, so I went with an account at IBKR. I picked that brokerage because of their low interest rates on margin loans. I know that margin loans also have risk, but I never borrow more than 25% of my account balance and I pay less than 2% while my index funds are never cashed out and continue to go up in value. To balance a "what if the stock market crashes below 50%" scenario, I also have an open HELOC that I don't use just in case. I like all of my money working so this is the strategy that I am comfortable with, but you should always talk to a professional before making a decision.