Why do people keep mentioning such small %s like .1% or .03%? We have a CapitalOne Savings at 0.75% and a CD at 1.5%. I think if you open a savings there now it's 0.60% APY.
As for gamblin... err investing, I am not so good at it so I'd rather not risk it. My mom (accountant) handles my 401k and that's it. Got over 10% ROI this past year but year before at 2% makes that less impressive. Like I said... gambling. Yes, I know... it's better for long term.
I see people talking about rental properties as passive income a lot, so maybe in the distant future...
You have the right idea and the right goals. But your priorities are not quite ideal.
It is so easy to fall into the trap of spending so much time and effort on the pennies and just not putting that similar effort into the dollars (penny wise and pound foolish). We could shop around for a better savings rate, but really, it isn't worth the time or effort. The median savings account balance is ~$5000. So at your 0.75%, that works out to $37.50 (taxed). At the mentioned 0.1% that is $5 (taxed). Is it really worth the time, paperwork, and hassle to get $32.50 more (after tax, that is maybe $20 more)?
Then you left one of most important financial details of all to someone else.
The median 401k balance is about $20,000 (although the average is over $100k). If someone just carelessly invests in a high fee fund vs an identical low fee fund, that is $200 in fees a year for the median 401k ($1000 for the average 401k).
What I'm trying to say is the effort being put into finding a 0.75% savings account to get a whopping $20 after tax should be put into the 401k to get $200 instead. Luckily for you, your mom got about the same return as a typical S&P500 fund, so she is doing you a decent service.
Also, if you do an average job gambling, the house cleans up. If you do an average job in stocks, you clean up. Not quite the same. Stocks can be gambling. But just buying an S&P500 fund and holding it for many years is just about the safest bet there is.
Rental properties as passive income is great (mostly because of fantastic tax breaks in real estate). But it often isn't worth the headache or effort until you get four properties. Start with a 4-plex apartment or something similar. If you can't afford that, then I wouldn't recommend rental properties.