by Charles Hebert
Many of us are aware that an emergency cash reserve is a necessary component to the implementation of a successful financial success system. This cash reserve is to be used for rare emergencies, such as a sudden job loss, a broken washing machine, or serious car accident. But what if I told you that you could transform this cash reserve into a gold mine that could greatly enhance your nest egg at retirement. Would you believe me? Well, it's true! Just follow the simple steps outlined below:
1. Open Savings Account Online - The first step is to open a high interest savings account online. You can currently improve your interest rate from the local bank's rate of around 0.5% to 5.25% by using online banks such as WT Direct. To learn more about these high yield online savings accounts, visit our website, Smart Money Advocate, from the link at the end of this article. If you hold an emergency cash reserve of $10,000, you would earn an extra $475 annually. This makes for a nice sum to begin an investment program for the future.
2. Open Low Cost Brokerage Account - The next step is to open a low cost brokerage account to invest your newfound money. One terrific option is to open an account at Zecco, which stands for zero commission costs. Basically, Zecco allows you to purchase stocks for free, with zero account maintenance fees and no account minimums to get started. A truly fantastic solution! To learn more about Zecco, visit our website, Smart Money Advocate, from the link at the end of this article.
3. Invest Interest From Savings in the Stock Market - Now that our accounts are set up, we will begin a process of transferring the interest we earn on our emergency cash once a year to our low cost brokerage account, where we will purchase shares in the total stock market ETF, symbol VTI. Over the long term, VTI should return around 10% annually. This process should be repeated until you reach retirement at 65 years old.
4. Allow the Money to Compound - Now that we have our investment program started, all we need to do is watch the money grow. Not literally, and certainly not every day or every week. We just need to keep an eye on our system and continue to invest our savings in the stock market annually. To give you an idea of the potential this program offers, look over the following example. If we start this program right out of college at 22 years old and continue the program until we retire at 65, our annual $475 investment in VTI shares should grow to over $281,000! The best part is that this program does not require you to save any extra money or change your spending habits whatsoever. It only requires you to invest the superior returns you are now receiving from your emergency cash reserve in the stock market. A pretty simple process, don't you think?
In summary, your emergency cash reserve can be converted into a true gold mine by following four simple steps:
(1) open savings account online with high yield,
(2) open low cost brokerage account that allows purchase of stocks and ETF's,
(3) invest the earned interest from your savings account in the stock market, and
(4) allow compound interest to work for you.
Over the course of your working years, this invested money will accumulate into a substantial sum. So start the process of securing your financial future today, and allow compound interest to begin working for you.
About the Author
Charles Hebert shares his views on personal finances from his website, Smart Money Advocate, which advocates simple strategies for achieving financial success.
source:www.goarticles.com/
2007/08/27
Open Savings Account Online and Transform Emergency Cash Into a Gold Mine
2007/08/03
Switching From One Account to Yet Another
ajeetkhurana
The services rendered by the banks have made our lives much easier. We can save our money there. We can deposit our valuables with our most trusted banks. We can start our businesses with loans from banks. We are mostly loyal to the banks that have been serving us without adding to our worries. Nowadays we are all being able to witness the immense expansion in the banking services. Every single day sees the growth of yet another great offer for people who avail of banking services. Are you looking at banks to service your personal needs or are you interested in their business services?
If you are merely looking for a good and safe way to store your income, a savings account should be ideal for you. When I was six years old, I was given a savings account in a bank that was close to my house. I felt rather influential as I ran over to the bank to deposit and withdraw money. Of course, all that was much before the introduction of ATMs. Even today, I prefer to have a savings account for my personal needs. However, when it comes to the needs of my business, I don't want to treat my revenue like my savings.
If you are looking for a good bank account for your business, a good current account would be fine for you. Do remember that savings accounts are very different from current accounts. A current account allows greater flexibility as far as using your money is concerned. One of the reasons for this is that current accounts involve much greater money amounts. Every bank and financial institution tries to secure the loyalty of businessmen who are doing well. In order to do that, they attempt to develop all sorts of deals for business accounts. Thus, they tempt businessmen to shift from their current bank accounts to newer ones. How do you think they do that? Well, they might offer you the assistance of financial experts. They may come up with incentives for bigger and smaller businesses.
Why should you shift from one current account to another? It is the same reason as why you should trade in your old no-frills savings account for a newer one which offers you better savings facilities and a higher rate of interest. Higher rates of interest are one of the most popular reasons for making that shift from one current account to another. Most financial institutions understand the organization's need to withdraw large amounts of money. So, these institutions provide easier withdrawal procedures. And this keeps the business people more than happy.
Get the best saving accounts and business bank accounts. And switch current accounts.
Source: http://www.articlealley.com
