There’s a difference between saving and investing. Most people don’t know the difference. Saving and investing are both important and each play a different role.
Saving money usually means putting cash into a checking or saving account secured by the FDIC. This allows your money to be in a safe place and it allows your money to be liquid. On the other hand, investing money is the process of using your money to buy an asset that you think has a good probability of generating an acceptable rate of return.
Having liquid cash is important. However, I think most financial advisors would tell you that keeping your money in a savings account is not a form of investing. There was a time when saving rates were in the double digits -- ah, the good ol' days. However, it's not uncommon for banks to offer less than .05%.
But what about FinTech "banks"? Well, you better do your due diligence. Some of these "banks" are not really banks and some of them are not FDIC insured. Some of these online banks offer rates over 2%. Sure, that's more than .05%, but at 2%, you're still losing to inflation.
Oahu's housing market is in a correction period. I've been showing properties non-stop to many first time homebuyers. I've noticed that prices are cooling off, listings are staying on the market, and sellers are price reducing.
In 2018, mortgage rates spiked to 5%. At the time, the slight increase in mortgage rates reduced a buyer's purchase power. Currently, rates dropped back into the 4% range. Did you know you can get a rate of 4.250% at .500 point?
If you're sitting on a lot of liquid cash and if you're looking for an investment, buying real estate on Oahu could be a wise decision. If you use Warren Buffett's buy and hold strategy, owning real estate on Oahu has had great long term gains.