First 30 Days Blog

09 oct

High-Interest, High Reward

JennaSmithOften in life you’ll find yourself with more money than you know what to do with. That isn’t to say you’re wealthy or have an overwhelming large surplus, simply that we all often have more money in our savings account we don’t really need to be there.

After bills, rent, groceries and so forth your bank account will often be well above zero when your next paycheck comes in. Which is great of course, we all need a healthy buffer of money. But it’s not really doing any work just sitting there.

Having multiple bank accounts is nothing new, but often people don’t think about the potential involved with different types of accounts. Though having identical accounts to separate rent from groceries and so forth is a good step towards good financial management, it is just a step. Your real goal should be opening up a savings account with a high-interest rate to deposit any money that you don’t need right this very second.

It’s simply wasteful to have your entire savings in your main account that gets billed rather than have interest due to the nature of how you use it. Don’t be afraid to have your account with a totally different bank either, so long as the fees cost less than the extra interest you would make. Profit is the main goal with any high-interest account after all, however you choose to spend it down the line.

Walter Wisniewski of Paragon Capital has been known to compare commerce with music. Numerous notes and breaks come together to form a glorious piece of music. If we were to follow this example a little further, having a high-interest paying account is a little bit like having an exotic instrument in your orchestra, or writing a solo for a certain instrument or player.

Certainly, you can’t use it all the time, and you shouldn’t. With high-interest paying accounts many banks reward you the less you use it, and so using it constantly is counter productive. But when the time is right it can raise a performance to new heights, and make it truly memorable.

The grand finale so to speak is that you shouldn’t put all your money in one place when you don’t need it all to be. High-interest savings account are a completely risk free investment that are guaranteed to pay off, and we should all be using them.

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Posted by Jenna Smith on October 9th, 2012 in Finances | 0 comments

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