Get Paid To Save

Apologies for no email last week. Work was busy and memorial day weekend arrived quick. To the new readers, welcome! Hopefully you find the email both helpful and enjoyable…if not then we still have memes.

“The beginner chases the right answers. The master chases the right questions.” - James Clear

Saving is a great thing.

While you can’t do it wrong, thanks to high yield savings accounts, there is a “good” way to save and a “great” way.

Here is how to make sure you do the latter. 👇

The journey of most dollar bills that end up in savings is pretty boring. They get deposited in a checking or savings account and often aren’t touched for years.

They lay around collecting dust, as their counterparts get to live the dream of being invested and growing into a larger fund.

“I wish I was a cool kid.” - Probably a dollar bill in your traditional savings account.

Here is just how boring it is.

According to Market Watch the national average savings account interest rate was 0.46% for May 2024 (average checking yield was only 0.08%).

Depending on how much you have saved, that 0.46% would earn you this each year:

Let’s be honest. That’s pitiful, and borderline robbery by the banking system.

Here is why.

While they aren’t the coolest kids on the block like the invested ones, dollars that go into high yield savings still have it made. Why is that?

Because depending on the account they have the ability to guarantee a risk free return of over 4.5% right now.

Bad market news? Who cares. Economy scare? No worries. WWIII? Meh. Funds in a HYSA aren’t at risk of decreasing in value like their cousins invested in stocks, ETFs, bonds, etc.

So how are these accounts able to earn a yield 10x more than the lame dollars sitting in a normal savings account?

As you likely know interest rates are high at the moment. This means banks earn more interest on loaned money, and can therefore transfer more of it back to users of their platform. It sucks for some things (like getting a loan), but is an opportunity for cash sitting on the sidelines to earn a little for itself.

Here is what you would earn each year on cash sitting in a HYSA offering 4.5%.

Yes. It’s literally free money, but here is a few things to know. 👇

Rates are not locked in a will vary with interest rates. - The yield of HYSAs will vary depending on what the federal reserve does with interest rates. The FOMC meets eight times a year and announces any changes in the federal funds rate.

Most HYSAs are FDIC insured. - Check to make sure the HYSA you choose is FDIC insured. Most banks are, but it doesn’t hurt to double check.

Fees and Minimum Requirements. - Some HYSAs will charge a monthly fee or require you to opt in to certain features to earn the full yield. For example, setting up direct deposit. Just make sure you do a little bit of reading before signing up.

Physical Locations. - A lot of HYSA accounts are offered by online banks (can afford to pay higher yield due to lower operating costs). While your funds can always be transferred to a physical bank, I recommend keeping some money in a local bank or credit union for quick access if needed.

Ally Bank - Currently offering 4.2% annually. Ally is an online bank that has been around awhile. Their customer service is top notch, and while they aren’t the flashiest online banking company, they have a great track record (I’ve been a user for over three years). Unfortunately they do not have any referral deals to offer, yes I asked.

Public - Currently offering 5.1% annually in their high yield cash account. Public is a rising star and one I have recently started using. Their platform offers a number of other features like the ability to buy treasuries, trade options, or invest in the market. Use this link and we’ll both get $20 when you deposit $1,000 or more.

Betterment - This wasn’t planned, but the sponsor of this email Betterment also offers a HYSA. I am not an active user of Betterment, but after doing some quick research it looks like they are offering 5% on their HYSA. Check out the sponsored post above for more details on their HYSA account.

There is no reason to not be earning at least 4% annual yield on cash that is not invested.

My guess is most people reading this could give themselves a four figure raise in a matter of minutes by transferring a portion of their savings to a high yield savings account.

Get it done. We don’t like lame dollars around here. ~ Cade

How To Become A Millionaire By Subdividing Land: Being from a rural area I often see large plots of land being divided up into lots and sold individually. Here is a cool thread that gives an overview of this process and how people make a killing selling plots.

​How Does the Stock Market Perform in an Election Year?: Another solid post by Nick Magiulli on how U.S. stocks react to elections and what a Biden/Trump presidency means for your finances.

Jim Cramer memes are a classic. And here is an entire thread of them.

RIP to the NFTs that are gone forever.

Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.