Educate Me III - United Bimmer Community

**doughboyea** · 05-20-2006, 10:34 PM

So inspired by another thread about interest I've come to make another "Educate Me" thread.

While in HS, I never really thought about how to save money. It was a check I would get from work that was cashed and there, in my hands, resided the power of purchase. Banks, who needs them, right? Well, as I got into college and realize how much money I could've saved that was spent away on stupid shit over the years, saving money became an important issue.

So for this Educate Me read, it should be focused more towards those who are still in HS and don't think ahead.... and maybe some of us who spend wildly.

Here is how I'm trying to save money:
I opened a Wachovia checking account last summer (I have other accounts for security purposes... but they're not for saving). After it was all setup, I went online to www.INGDirect.com and seeing thier rates, proceeded to open a savings account with them and linked it to my checking at Wachovia. At the time, it had an APY of 3.00% (I think)... now it is at 4.15%, and it's been growing ever since I got it, gaining a quarter percent every other month or so.

So, Dough, wtf does that mean, APY... well, APY is the annual percentage yeild from the bank. It takes the amount in the account and gives you the fee that they are willing to pay you for having ur money in thier bank. So, if for one year I stick my money, say $100, in this account at 4% (to keep it simple), after 12 months of interest, I would have $104. Big whoop Dough, so what...

OK, say I had $1,000,000 Well, in one year's time, if left untouched, at 4%APY, you would get $40,000. That's just for having your money in a savings account.

Now banks will do a compounding interest, meaning, the interest isn't taken just once a year and that's it. If left untouched, that $100 gained $4 in one year's time. But the interest is taken (at a reduced rate that when added up over a year will total the APY) and deposited once a month. So if in that month, you continually stick in more money, your account will grow much more faster.

So, after that big intro for some, let me ask you, how are some of you saving money? Online accounts like INGdirect and Emigrantdirect, as well as HSBC are just a few that have high interest bearing savings account. So what else is out there? Stocks are risky, money market accouns are shit unless you have LOTS of money in the account all time.

Note: Money Market accounts from a physical bank will yield "better" interest than a normal savings account where (at the time of this post) the savings account APY at NJ Bank of America were:

Savings...................0.50%
Money Market:
<$2,500...................0.60%
$2,500-$9,999.............0.60%
$10,000-$24,999...........1.85%
$25,000-$49,999...........2.45%
$50,000-$99,999...........2.60%
$100,000-$499,999.........3.51%
$500,000-$2,499,999.......4.00%
$2,500,000-$9,999,999.....4.25%

(and for no minimum amount)
INGDirect.................4.15%
EmigrantDirect............4.50%
HSBCDirect................4.65%

So now educate me (and others) on alternatives or opinions/experiences of saving..... aside from sticking it in ur mattress. Are there other banks like ING Direct that offer even higher rates than HSBC?

Dough

witeshark · 05-20-2006, 10:40 PM

Great idea Dough!

**94bmw325i** · 05-20-2006, 11:26 PM

I am using ING, it has been awesome so far, constantly rising, I just wish that I had more money to put in there. I have had it for around 9 months I believe.

**Ralphie 22575** · 05-20-2006, 11:53 PM

I still keep it in my mattress..............lol

**Chris** · 05-22-2006, 01:46 AM

great info, but let me point out to everyone that at the end where he asked what else was out there and what not, you're in great shape if your APY is higher than the current interest rate, but the second the interest rate goes above your APY after adjustment, you're actually losing money.

just thought i'd throw that in there so y'all keep it in mind.

**exjarhead328** · 05-22-2006, 08:01 AM

401k 403b savings account interest bearing checking coins-in-a-jar wife on the corner(Hey, I let her keep half)

Most of the people here are young enough to invest, probably quite aggressively, in the stock market. Over the long term stocks will most likely have the best return. How many times have you heard anyone say "I made a killing on my savings account"? Sure there's risk, but that's what the whole risk-reward deal is about.

**jybute** · 05-22-2006, 09:36 AM

^^^ yeah, wasnt it one of your guys great leaders that said "those who are afraid to fail, fail to achieve"

also, if you are going to invest in the stock market, try and invest in something you understand, if you know nothing about biochemistry (like me) dont invest. I have done a little investing on my own, (without my wife) and have tried to stick to things I can underatand. But for the most part, she is the wise one.

drz · 05-22-2006, 11:10 AM

Quote:

Originally Posted by jybute

^^^ yeah, wasnt it one of your guys great leaders that said "those who are afraid to fail, fail to achieve"

also, if you are going to invest in the stock market, try and invest in something you understand, if you know nothing about biochemistry (like me) dont invest. I have done a little investing on my own, (without my wife) and have tried to stick to things I can underatand. But for the most part, she is the wise one.

Exactly. Don't dump money on thigns just because your buddy says it would be good, or because you read it somewhere. Stick to industries you know. Study them, their history, their executives, etc. You need to be able to forsee things while investing in the stock market in order to actually achieve significant gains. Good luck to all.

**Chris** · 05-22-2006, 01:52 PM

hehe, i'm in great shape as far as the stock market is concerned. for my 18th birthday i got 20 shares of google stock free and clear

google is at 368.46 as of the time i posted this.

just take that investing cmmercial to heart where the guy verpays on a painting and then wants to immediately sell it again....