5 Places to Keep Your Money Other Than the Bank, According to Humphrey Yang

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It seems counterintuitive, but it’s possible to have too much cash in the bank. Read on for one finance guru’s advice on where else to put your cash. 

A good savings account is arguably the absolute best place to keep cash you need quick access to, such as your emergency fund. But after you’ve reached a reasonable emergency fund, it’s probably a good idea to start looking at better places to put your extra cash.

“Having too much cash in your bank account can actually erode your own wealth due to the fact of the inflation that we’re experiencing,” explains YouTube personal finance guru Humphrey Yang. He made a recent video on better places to keep your cash than leaving it in the bank.

According to Yang, these five alternatives should generally maintain their value, with most doing especially well in the long term. Let’s take a deeper look.

1. Real estate

Investing in real estate is pretty much a standard recommendation of any how-to-get-rich influencer — and for good reason. Historically, real estate has proven to be a good long-term investment. After all, land is finite, and we all need somewhere to live.

This doesn’t mean that investing in real estate is without its risks, however. Housing markets are notoriously fickle, and while property values may go up in the long term, short-term values can plummet with little warning. That risk holds true for residential property — think 2008 bubble burst — as well as commercial real estate (look at all the folks pushing people back to the office for the sake of commercial real estate values).

And don’t forget about interest rates. High rates overall mean higher mortgage rates, which could impact the profitability of your investment.

2. Commodities

There are a lot of things that fall under the “commodities” umbrella, from gold to livestock to energy, and you can invest in any or all of them. According to Yang, those investments are particularly worthwhile during times of inflation.

In support, he paraphrases a paper from 2021, saying, “All commodities, such as gold, silver, even livestock, have positive returns during inflationary periods, and also benefit from rising inflation.”

Having said that, Yang is quick to put a caveat on the commodities, pointing out that what’s good for riding out inflation may not be great in the longer term.

“Gold and silver might be good to own during a tough economic time, especially because they can outperform cash in that short period of time,” he says. “However, the longer you look out, the more that stocks and real estate look a lot more appealing, because they’re just going to perform a lot better in the long run.”

3. Stocks

There’s two main ways you can invest in stocks. You can pick your own stocks and try to beat the market. This is very difficult to do and requires a ton of time and research. (There’s a reason it can be a full-time job.)

Or, you can do what Yang recommends, and simply invest in an ETF or index fund. These allow you to invest a little bit into a lot of companies, offering built-in diversification. For example, Yang specifically mentions investing in an S&P 500 index fund, which would mean you’re buying a small percentage of all of the top 500 companies in the U.S.

Index funds can be a good long-term investment strategy, but I agree with Yang’s warnings about short-term risk. In times of recession, for instance, your portfolio can have a significant drop if the S&P isn’t doing well. He emphasizes that investing in stocks has the most potential for appreciation if you have a time horizon of 20 years or more.

4. Collectibles

Next on Yang’s list is, I think, a somewhat controversial suggestion: collectibles. Some of the collectibles he mentions include:

CoinsStampsRare magazinesSports memorabiliaPokemon cards

As with a few other things on this list, Yang’s argument for collectibles is that anything truly finite, such as one-of-a-kind collectibles, tends to maintain its value.

While I can sort of agree with this idea — with caveats — I’m glad he goes on to clarify that the appreciation of collectibles relies on a ton of variables and is no way guaranteed. He’s also careful to add that collectibles are highly illiquid.

5. Businesses

Perhaps the most interesting asset Yang lists is owning a business, or a piece of a business.

According to Yang, “Businesses are great uses of cash since they produce revenue and cash flow, allowing you to take some money off the table from time to time, as well as the asset itself actually grows some value over time as well.”

In my opinion, investing in businesses is a lot like investing in collectibles; how profitable the investment is depends on too many variables to predict. The industry, the specific business, the location, the economy — all of these things, and more, will impact how much appreciation and profit you see from investing in a business.

But, you know, banks are cool, too

After spending the video talking about the many ways you can avoid keeping your money in a bank, Yang brings it back around to, well, banks.

“If you don’t feel comfortable investing in any of the five assets I listed today,” he says, “if you do have a bunch of cash sitting around, make sure you’re getting at least 4% APY — or even 4.2% — APY by putting it in a high-yield savings account.”

Not only is this closing advice a nice way for him to work in an affiliate bank mention — no shade from us on that one! — but it also happens to be true. You can find savings accounts and CDs with remarkable rates that are quickly becoming a competitive place to put your money.

And this is especially true when you consider the much higher risk of most types of investment. (Yes, despite the bank troubles early this year, banks are perfectly safe for most savings so long as they are covered by the FDIC.)

So, long video short: If you want to put your money somewhere that isn’t the bank, you can invest in a variety of popular assets — but don’t discount the bank entirely, because rates are pretty good right now.

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