Where should you park money that you’ll need in three years? It’s a question that forces you to balance safety with returns, and resist the temptation to gamble on the stock market just because it’s been going up for 17 years.
In this Q&A episode, Joe and I answer three listener questions. Olivia is saving for a year-long sabbatical in 2029 and wants to know if a money market fund is right for a three-year goal.
Robert is 53, planning to retire in 3-4 years with 58% in Roth accounts, should he prioritize taxable accounts or keep maxing Roth?
And Anonymous (Julie) has 30 years in social work and wants to open an adult day center for people with disabilities in her rural area, but has no idea where to start.
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Listener Questions in This Episode
Olivia asks: My husband and I are saving for me to take a year off work in three years when he goes on an international assignment. I’ve been putting it in a Vanguard Federal Money Market Fund. Is this okay for a three-year goal?
Robert asks: I’m 53 and retiring in 3-4 years. I have 58% in Roth accounts and I’m doing 72(t) distributions from pre-tax accounts. Should I prioritize building taxable accounts or continue adding to Roth?
Anonymous “Julie” asks: I have 30 years in social work and am a parent to an adult with special needs. I live in a rural area with almost zero resources for disabled adults. My dream is to open an adult day center but I have no business experience. Should I structure it as an LLC or nonprofit? Where do I even start?
Key Takeaways
For three-year goals, money market funds, high-yield savings accounts, and T-Bill and Chill are all solid choices—there’s no wrong answer among these options because they all prioritize capital preservation over returns, which is exactly what you need for short-term goals.
If you choose T-Bill and Chill, buy individual T-bills through Treasury Direct, not a T-bill fund or ETF—funds buy treasuries on the open market where prices fluctuate, meaning you could see losses, while individual T-bills held to maturity guarantee your principal.
After 17 years of bull markets, it’s easy to mentally treat the stock market like a high-yield savings account—but for three-year goals, any exposure to volatility crosses the line from investing into gambling because you have no time to recover from a downturn.
When you’re 3-4 years from retirement with 58% in Roth and already managing pre-tax accounts with 72(t) distributions, prioritize building taxable accounts for early retirement spending—Roth is for later in retirement, taxable gives you penalty-free access before 59.5, and you’ve already front-loaded enough tax-free growth.
Starting a nonprofit focused on serving people with disabilities requires choosing between nonprofit status (grants, donations, tax-exempt) versus for-profit LLC (more flexibility, easier to start)—the key is understanding that nonprofits serve a mission first while for-profits serve profit first, and your funding model will largely determine which structure makes sense.
Resources
Grind – a book by Michael J McFall
affordanything.com/newsletter
Chapters
Note: Timestamps are approximate and may vary across listening platforms due to dynamically inserted ads.
(0:00) Introduction
(1:20) Olivia’s Question: Where to save money for a 3-year timeline?
(4:10) Why the “don’t invest what you need in 5 years” rule exists
(11:35) High-yield savings vs. CD ladders vs. Treasury bonds
(17:15) Robert’s Question: How to manage a $300k windfall while working abroad?
(21:05) The “Tax-Drag” problem with taxable brokerage accounts
(30:40) Strategies for geographical flexibility and long-term wealth
(37:40) Anonymous’s Question: Should I pay off my 3% mortgage or invest the difference?
(48:22) The psychological vs. mathematical debate of debt payoff
(56:30) Opportunity cost and the power of liquidity
(1:00:08) Closing: Join the Afford Anything community
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