Join Jane Barratt for an in-depth discussion in this video Cash and equivalents, part of Personal Investing Basics.
- You know that expression, "It's like money in the bank"?…It's an expression of surety, of guarantee,…a sure thing.…As a reference to safety, the expression works well.…Money in the bank is very safe.…Even if your bank gets robbed or goes bust,…in the U.S., the government will guarantee…your deposits up to 250,000 dollars.…That's a lot of safety.…But what about using bank accounts…as a way to invest?…I'll cut to the chase and tell you straight out…that money held in bank accounts…is a terrible investment idea.…Between fees and low interest rates,…keeping money in the bank is a great way…to not make money.…
Cash in the bank is great…because it's safe and easy to get out.…This easy to get out part is called liquidity.…You can access your money by ATM, check,…wire transfer, ACH, bank teller, PayPal,…Carrot Card, Venmo.…Your money easily flows everywhere.…It's called liquid.…But because banks pay such low interest rates right now,…you should keep only a minimum amount of money…in your bank account.…Try to keep two to three months of expenses in the bank.…
Jane is the founder of GoldBean, an online investing platform that helps first-time and experienced investors alike take their investments into their own hands. In this course, she shares her investment strategies with you. She breaks down the market into its five basic building blocks—cash and equivalents, stocks, bonds, funds, and insurance products—and the different vehicles where you can invest these building blocks. She also covers topics such as the importance of a balanced portfolio, understanding and managing your risk, identifying value in the market, and building your "money muscles" over time. Plus, learn how to calculate the rate of return of a portfolio vs. general market performance. Last, Jane outlines the options for DIY investing, when it makes sense to work with an advisor, and how to avoid costly investment fees.
- Why should you invest?
- Understanding compound interest
- Comparing stocks, bonds, and funds
- Managing risk
- Building a portfolio
- Finding where to invest money
- Working with a financial advisor