Why you shouldn’t just put your money in a savings account..
I’m stuck on I-95 currently, it’s Easter time, and I haven’t written an article yet for medium.com or LinkedIn today. So here it goes!
Today, my family went Easter egg hunting. Even though we are all practically adults now in the family we didn’t care. Game on.. So we scavenged as many eggs as we can. At the end of the battle, yours truly received 10 dollars(1 single in each of 10 eggs). Now if you’re a college student, you know how much of a difference 10 dollars can make. Here’s the thing though. It’s now sitting in my wallet, wondering what to do with it. Save it? Spend it? I knew that perhaps I might eat out this week but I already have a budget for that. So I knew if anything, I should be saving this money but not just let it sit in a savings account but for it to be invested.
For about 9 months I’ve been invested in stocks. And I find it very interesting how compound interest works. The major details of it can really bore me but the basic idea fascinates me. For all of you don’t know what compound interest is, it’s simply interest that keeps accumulating and accumulating. So 2 goes to 4 and then 4 goes to 8. It doesn’t double like that so easily, but the money adds up.
What I really don’t get is, how are people so stupid with their money? I see people always buying bling, materials, and possessions they simply don’t need. The only reason I truly accept an iPhone is because it unlocks so much that I can do when I don’t have my computer on me or if I’m on the go and want to listen to an audiobook I can. People make it to complicated when it comes to the materials they own. I don’t see the point of it.
With this said though, a ton of people who are “saving” are actually “losing” because after inflation and taxes, whatever money that sits in your bank account ends up being worth less than whatever it originally worth. So what should people do? I know a lot of people might not take my advice or thoughts credible being a 20 year old still in college but it’s also not that hard to read what has worked for other people along with other things I ended up trying and making money with.
What’s the answer? Wealthfront! Don’t know what I’m talking about? Wealthfront is a brokerage firm who is willing to manage your first $10,000.00-$15,000.00 dollars for free! How did they do it? Well it’s up to you. You can either go very conservative, or you can go full on risky. Wealthfront will then buy a mix of index funds, real estate, bonds, resourses, and a variety of assets that will end up compounding and compounding. $2,000.00 can end up being at the lowest $16,000.00. But imagine if you kept investing into these funds? Tell you one thing, it’s better than it going negative from letting it sit in a savings account. Don’t get me wrong, keep a rainy day fund just in case something happens, but consider investing that $500.00 bonus you earned into an index fund, instead of buying a really expensive dinner or going on a trip to the club and buying every attractive lady or man a drink. It’s not a complicated science, but it takes consistency and discipline. Don’t believe anything I said? Just know from letting $750.00 sit in one of these funds, I made an extra $50.00 by letting the market do its thing for 6 months. No the market won’t always be great but that doesn’t mean there isn’t a huge profit to be made.
For more intel, read books like “The Intelligent Investor” by Benjamin Graham and “Unshakable” by Anthony Robbins. These books alone will give you all the insight you need to know about how investing in stocks and bonds works. Thank you all for reading. Much love! — Duke E. Large(Founder of Moby Dook 🎥)