Where to save Your Money

[Samnite]

Never keep your money sitting in a checking account or your savings account.​

Keeping your money in a Checking account or Savings account is stupid because your money loses value due to inflation. In the U.S., inflation goes up about 2–3% a year.

Checking accounts do not grow your money over time.

Savings Accounts​

Keeping money in a Savings account is a slightly better option, but average savings accounts in the U.S. only have about 0.60–0.80% APY (Annual Percentage Yield).

This means your money grows by 0.60–0.80% per year.

This does NOT keep up with the 2–3% yearly inflation we have in the U.S.

High‑Yield Savings Accounts (HYSA)​

A much better option is to put your money into a HYSA (High Yield Savings Account).

HYSA’s grow your money a lot more than your average savings account. The average HYSA in the U.S. offers 1.50–2% APY, but it’s easy to find banks that offer 3–4% APY.

When your money sits in a HYSA, it will usually grow with the inflation rate at 2–3% yearly. But sometimes a year might have a higher inflation rate than your HYSA APY, so you could lose some money; but not nearly as much as if it were in a normal savings account.

The Stock Market (S&P 500)​

One of the best places to stash some of your money (but never all of it) is in the stock market, like the S&P 500.

The S&P 500 grows by about 7–10% per year. This means if you had $100 in the S&P 500, by next year it could be $107–$110.

With a 7–10% growth rate per year, the S&P 500 outruns the U.S. inflation rate of 2–3% by about 5–8%.

Example: If one year inflation is 3% and the S&P 500 grew by 9%, then you just made a 6% profit.

Diversifying Your Investments​

When putting your money in the stock market, split your money between hundreds of companies.

If all your money was in a single company and that company had a really bad year, you could lose lots of money.

Even if you split your money in the stock market, there are still risks. A market crash could occur; this means nearly all companies have a really bad year, losing profit.

Complete market crashes rarely ever happen, but it’s still something to remember when putting your money into stocks.

Final Note​

Anyways, I’m not a financial advisor, so if you lose all your money DO NOT BLAME ME.