Saving $1 million opens numerous financial opportunities, particularly through high-yield savings accounts offering yields as high as 4%. This can translate into significant additional income, especially for millennials who could potentially earn $40,000 per year from such accounts. However, there is an opportunity cost to consider, as investing in stocks and crypto could provide higher returns during market upswings. Tax implications and yield comparisons with bonds also play critical roles in deciding where to invest one's money for optimal growth.
It's a big achievement to save up $1 million, providing financial options and allowing for growth through high-yield savings accounts with potential yields of up to 4%.
Although high-yield savings accounts offer a risk-free second income, investing in stocks or crypto could yield greater returns in bull markets, despite possible tax implications.
High-yield savings accounts and bonds have ordinary income treatment; however, investing in higher-rated bonds or corporate bonds may provide better yields than traditional savings.
The example demonstrates how different APYs affect the growth of $1 million over time, showing potential earnings ranging from $1.02 million to over $1.21 million in five years.
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