Foundations of Finance

Despite the failure of banks on occasion, there are many reasons that putting your money into a bank is a good idea. Here are a few of the reasons that putting your money into a bank is a good idea:

1. It’s safer: Your money will not be subject to theft and fires. In addition, the government will give your money back even if the bank fails.
2. It’s convenient: Instead of using cash all of the time, you can use checks or cards to pay for the things that you need. If you need cash, ATMs are often close by and convenient.
3. It’s easy to save: You can get a higher interest rate by putting money into a savings account. This will help you gain money over time.
4. It’s cheaper: Many services are free while fees may come with non-banking institutions
5. It can help you build credit: Credit is important for buying a house or a car.

Years ago in a business and marketing class, we were strongly encouraged to map out our future as we considered establishing a lifelong investment plan with a professional advisor who would see us through the mass of economic information and ultimately guide us to financial success.  He explained that by simply adding 20 dollars a month from age 16 until our senior years, we could easily possess a portfolio worth up to 6 figures.  I have pondered the idea of a mutual fund since then and looking back I can only regret not taking him up on his advice and opening a mutual fund. 

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So you have probably heard the bank stress tests are over.  Do the results put you at ease, or are you still stressed out?

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