Business Innovators Radio - Episode #52 – High-Yield Savings – The 15 Minute Financial Feast Podcast-With Mark Triplett & Troy Westendorf

Episode Date: November 16, 2023

We believe that every dollar has a purpose and a timeline. When and how your retirement assets will be used should be understood before making important financial decisions.The Triplett-Westendorf Purpose and Timeline 5 Step Planning Process (PT5) begins with Discovery.Understanding where you are now, and then defining where you want to go (Your Purpose) and when you want to get there (Your Timeline), programs your financial GPS. Our Purpose and Timeline 5-step process (PT5) programs your financial GPS.Learn more: http://triplett-westendorf.com/ | https://mypt5.com/The 15 Minute Financial Feast Podcasthttps://businessinnovatorsradio.com/the-15-minute-financial-feast-podcast/Source: https://businessinnovatorsradio.com/episode-52-high-yield-savings-the-15-minute-financial-feast-podcast-with-mark-triplett-troy-westendorf

Welcome to the 15-minute financial feast podcast, bringing you 15-minute segments to help you retire with purpose on time. We're serving up food for thought and bread for the head. Are you hungry to learn? Here are your hosts, Mark Triplett and Troy Westendorf. Welcome to another episode of the 15-minute financial feast. Today, you are listening to the audio from a live television interview where one of our favorite local news station anchors asked us questions about a financial feast. topic on the minds of many hardworking folks in our community who are trying to make good decisions and get ahead. Money market accounts have been enticing savers with higher than normal

returns. Local financial professional Mark Triplett from Triplett Westendor Financial Group joins us now via Zoom. Always great to have you, Mark. Why are high-yield savings accounts performing so well right now? Well, the same impact that the fed's having by raising rates trying to slow the economy down and reduce inflation is actually benefiting those who have capital. on the hand who are then the lenders to the banks who are then lending that money out at higher interest rates. So banks are now paying a higher interest rate on those savings deposits if you know where to look. And then what are other savings vehicles, you know, can offer similar benefits? There's a lot of points to cover on this. You don't know what you don't know.

And sometimes we forget there's ways to make your money work for you. Yeah. Well, we've been, we've been experiencing super low interest rates for nearly two decades. I mean, if you were a saver over the last 15 years or so, you really didn't make a whole lot of interest on your passbook savings accounts, even money markets, or certificates of deposit, you just weren't getting anything. But today, there are online, high-yield savings accounts that are highly liquid. You link them to your brick-and-mortar bank account, and they're able to pay interest rates that are between 4% and 5%. Now, what I'm finding is a lot of folks we run into have money on hand, cash, their emergency accounts, sitting in Passbook Savings,

accounts that might be earning a quarter of a percent or less. They just don't know that they could be earning many, many times more than that if they just knew where to look. And that's unfortunate. So when we run into those folks, we like to remind them that, you know, a year ago, my own personal accounts, I was earning maybe 0.3% on these high yield savings accounts. And now I can earn up to, you know, 4.3%. That's a tremendous difference.

And it really makes a big difference over time when you take into account compounding interest. Yes. Okay. what will happen if the feds keep raising rates? Well, if they keep raising interest rates, these savings accounts might enjoy even higher yields in the future. But it's also important to understand that what goes up can also, and often does come down.

And that's one of the drawbacks to these online savings accounts. Their interest rates do fluctuate, and if we see interest rates fall in the future, we'll also see interest rates on those type of savings vehicles fall. We call that reinvestment risk. When you are looking at short, term positions and you're getting higher interest rates right now, but you're not tying your money up for any period of time. You're also subject to those reductions in interest rates as well.

So we actually encourage some of our clients to look at maybe locking in higher interest rates for a longer period of time right now. I'm going to date myself, but hey, when I was a kid growing up, I learned how to put away $25 a month into savings, you know, and that's a start just for financial literacy. And I remember making like two cents of interest off of my bank accounts. I'm like, this is a next level conversation. Many of us don't think about or, you know, you forget to utilize saving your money and earning more interest. It's really interesting. Do you find people that is it just having a constant, a consistent, like automatic payment into your savings is the way to go without even having to think about it?

We highly recommend that you automate your savings out of sight, out of mind. You know, If you are given the decision of spending that money versus saving it, oftentimes it'll slip through your fingers. So if you set up automatic savings, that money goes right into that savings account. You never have the chance to then be tempted to spend it. And I'll also throw this out that, you know, I too remember having my first passbook savings account. I'm a little bit older than you. I'm going to date myself here.

You could actually earn some interest on those accounts back then. And it's kind of exciting now to see some of our clients be able to earn some interest as savers rather than investors. Investors, you know, they put their money in the market, they buy shares of stock, and they hope those values go up. Savers, on the other hand, kind of hoard cash, and they've really been punished over the last nearly two decades, and it's nice to see savers be rewarded again.

Thank you so much for another insightful conversation. We really appreciate it. You've been listening to the 15-minute Financial Feast podcast. Remember, every dollar has a purpose, and every dollar has a timeline. If you have questions about today's topic, Schedule a call with a team member. Visit www.w.w.com.

Until next time, be sure you're taking steps to retire with purpose on time. Mark Triplett is an investment advisor representative of and advisory services offered through Royal Fund Management LLC, an SEC registered investment advisor. Nothing contained in this program should be considered an offer to buy or sell securities. Different investments have different risks associated with them, and not all investments are appropriate for all investors.