"Hey, I know your granddad bought the family home with his job at the local grocer, and you need to saddle 100K in student debt just to have a shot of buying a home by the time you're 35, but don't be sad, SP500 is at an all-time high!"
There are obviously more nuanced things to understand such as “cash equivilent bonds/etfs” but that is what they should figure out.
It’s about undoing the stigmas not solving the housing crisis.
We keep people in the dark with this belief that financial strategies aren’t to be talked about publicly.
†https://www.cnbc.com/2024/01/24/how-much-money-americans-hav...
People with less than $500 can still start gaining that 5% yield, and it is better than the bank taking that 5% and eating it. If you don’t get that 5%, the bank will. Furthermore most people can easily calculate 5% and make the decision themselves if you don’t actively discourage them as your reply suggests.
From the article you linked:
> This leaves them vulnerable to unexpected expenses, underscoring the importance of having an emergency fund, if they’re able to build one.
The rest of the article goes on how to vet yourself to start building an emergency fund. A great emergency fund would be a very liquid, low tax, investment option. Like cash equivalent Bonds and ETFs.
If someone has a bank account with $1 it would still be better in a Fidelity Cash Management account gaining a yield than it would be in a bank not gaining at all.
2010s were a decade of paycheck to paycheck years for me+kids. We frequently ate plain white rice (only) because there wasn't enough money for a can of beans. Or 1 onion. Sometimes I couldn't swing a bag of rice. The kids had a couple of regular meals when school was in session.
I suggest your circumstances aren't as universal as they may seem to you.
That comment was directed at the previous poster’s remark than since 60% of Americans have $500 or less in their bank account that must mean all 60% have no money to save and that my advice was bad. That is the defeatist attitude. I’m definitely not insisting that some portion aren’t entirely living paycheck to paycheck.
The point of my comments is to acknowledge that people should seek out return for their money instead of keeping it in a bank. Not to squabble over who is worse off.
I had a bank account. Each month it eventually came to have the exact amount of the rent in it. Most months, anyway.
> Did you cash your paychecks at a check cashing service...
On a few occasions where utilities would be cut off in less than a day, I used a check cashing service. Specifically Ace as their fee was lowest.
> (giving them a cut?) and spend all the cash?
On those occasions I blew it on water or power.
> What were your expenses during that time that ate all your paycheck. Surely not just rice.
Not just rice, true. My expenses were rent, water, power, fuel and minimal auto insurance (until the van was stolen anyway). Water and power outweighed food because disconnected utilities were CPS threat vectors.
> The point of my comments is to acknowledge that people should seek out return for their money instead of keeping it in a bank.
For those that make more than 100% of their minimal bills sure. For the millions of us who had to live otherwise, keeping non-existent money in a bank seems unrealistic.
How am I raging? I’m passively telling people ways to better their lives. They can choose to use the info or not. You are the one raging against the idea of a better world with happier people. An extra $50 certainly does help people living paycheck to paycheck. The point of my commentary is that people should be optimizing their finances more and we should be discussing options publicly. Your insistence that it’s futile is mind bogglingly stupid.
Also, the current interest rate on a Fidelity cash management account appears to be around 2.2%, not 5%.
Even if you foolish choose the 2.2% option you would still yield more return on your money than a bank checking account which probably gives you less than 0.01% return.
You can optimize further by cutting Fidelity out of the equation and purchase Tbills on treasurydirect.gov straight from the government creating a high yield savings account with monthly yield.
Even better, Tbills are tax-free at the state and local level.
[0] https://www.fidelity.com/spend-save/fidelity-cash-management...