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Personal Finance 101 Part 5: Checking vs Savings 467 Views
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Transcript
- 00:01
We speak student!
- 00:05
Personal Finance 101
- 00:08
Checking Account versus Savings Account
- 00:11
a la Shmoop
- 00:13
Let's bring it back to some practical advice for students.
Full Transcript
- 00:17
So is your advice to kind of totally bypass
- 00:20
the checking account and just invest it?
- 00:22
Well, it depends.
- 00:24
So you need a checking account.
- 00:27
You have to pay your bills somehow.
- 00:30
[ squawk ]
- 00:31
The question is how much you need to keep in a checking account.
- 00:35
And historically, keeping a lot of money in a checking account is really inefficient.
- 00:39
[ say what?! ]
- 00:41
And you just put it in the minimum that you need to pay off your bills.
- 00:45
And everything else, generally speaking, you probably want to invest.
- 00:49
And, yes, there's risk in the stock market,
- 00:51
[ manic giggle ]
- 00:52
but over the last 127 years,
- 00:56
the market's gone up on average ten percent a year.
- 01:00
So, yeah, it may go down
- 01:01
25 percent in a year,
- 01:03
but you're 16. Who cares?
- 01:07
It's gonna come back and you keep investing,
- 01:10
and if you're disciplined and you invest every month,
- 01:13
when the market's sold off
- 01:14
and you're still investing your hundred bucks a month,
- 01:16
you've bought a lot more shares for that hundred bucks
- 01:18
than you did when the market was expensive.
- 01:20
And then when it comes back, boy, you've made a killing.
- 01:23
[ woo-hoo! ]
- 01:26
[ whoop ]
- 01:27
Should I bypass a checking account and just invest my money?
- 01:33
[ manic giggle ]
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