<prompt> Human: Hello everyone,So I am a 25 year old working full time as an engineer. Ive been working for a little over a year, since I was in school getting my masters. My gross income is approximately 58k and I am expected to gain about a 3 increase in salary each year. I currently live at home and I plan to for at least 3 more years. Im in no rush to leave. I recently paid off all my student loans about 15k and I have no credit card debt. The only debt I have is 5k for my car.My plan is to be able to hopefully retire early but I also want to save enough for a house in 3-5 years time. Ive seen that its ideal to save 20 of the houses cost as a down payment, even though this is difficult to achieve. Here is my current financial situation:Roth IRA - 6,000 I plan to max this out each yearCheckings Account - 2,000Savings Account - 3,000401k through work no match: 600 a month and 1700 already investedCurrent expenses - approx. 500 a monthMiscellaneous- approx. 300 a monthI am roughly putting away 25 of my salary towards retirement. I also have no idea on what the best way to save for a house is, in terms of savings accounts, investments, etc. Any help is greatly appreciated! Thanks in advance!  <response>: To recap cashflow:Income is 58kyear or 4,800month.Expenses are: 800monthSavings are 600month 401k 458.33month for Roth IRA.Generously presuming taxes of 8,000year or roughly 15 we still have 2,275month to save towards the house, meaning that in 3 years youll have 81,900 if you stuff it under your mattress. If your aim is to pay 20 you can afford a 409,500 house at age 28.Perhaps Ive missed something? I didnt understand the 25 of your salary towards retirement statement. Are these savings going somewhere else besides the 401k?As far as investing for a 3-year goal, the investments need to be extremely conservative. Not only because we find ourselves in a historically long bull market and were more statistically likely to experience a decline, but also because the stock market is erratic and you need at least an 8-10 year time horizon if youre going to be doing anything that volatile.Unfortunately that means youre going to be stuck with low yielding bonds in a rising interest rate environment. Expect to get maybe 3-4 average annual return over 3 years, so add another 3-4k in interest for the next 3 years. Anything else is too volatile.The key word here is saving for a house, not investing for a house. The house is the investment.Consider establishing a brokerage account at one of the major investment firms, and select a a broadly diversified mixture of bonds no, dont completely avoid Long-term bonds just because the fed is raising rates. If you dont like the volatility of bond funds, money markets are the most stable asset class and are yielding a little over 2 already. When the Fed raises rates, thatll likely go a bit higher. If youre content with 2.5 over the 3 years instead of 3-4, not a huge difference, then just park it in a money market fund and be done with it. 