The Apple Savings Account

exciting, interesting news about the new Apple savings account. That’s right, if you’re not familiar, the phone company, computer company, device company, earphone company, the wonderful company that is Apple, they introduced Apple pay a little while back, and now they have rolled out a savings account. That is sort of a second financial services offering from the company. And I think it’s nothing but a really, really positive thing. Like there’s a lot to a lot of important things to think about and unpacked as as with all things. But all in all, I think it’s nothing but a really positive thing. And to think that it makes sense. And it’s always true, or it’s always important to recognize that two things can be true at the same time. In fact, many things can be true at the same time. So that Apple about a technology company, as introduced a savings account. That’s neither good thing nor a bad thing on its face, it just kind of is. But why wouldn’t they? Why wouldn’t Apple introduce a savings account? And if you were to think about it from a trust perspective, here in the United States, and all over the world, is Apple more trusted than our biggest banks. But do you think Apple more trustworthy than Wells Fargo? I think I think they certainly are. So I don’t think from from a perspective of is our banks, the only place that I want to have my money. I just don’t think that that’s true anymore. And obviously, we’re writing this crypto wave where we are looking at different kinds of technologies. And when you look at the way that how we interact with money has changed over time, it’s changed dramatically and substantially. And it’s going to continue to do that. I certainly remember a time I’m 44 years old, I remember really just having cash and a checking account and a savings account and writing checks. And if I were to, during my younger years, if I had been inclined to to check a balance, I would balance checkbook. But I didn’t do that. I wasn’t into that when I was when I was a little bit younger. But now obviously, we have millions of different ways to interact with money, we can buy things with our phones, we have apps, we have digital currency, we have online banking. So the way that we interact has changed a lot. And you know, something’s for the better, something’s for the worse, but it just is what it is. So I think that this is a very, very natural progression down that line. Another thing that is 100% true, is that you spend more money when you use a card or a digital device than when you actually pay cash. So this would be an argument against using the Apple savings account. It’s a written in a Wall Street Journal article, sort of laying out everything with the new savings account, and they had people talking about how they were just spending so much more money using Apple Pay. And so they stopped doing it. The reality is that studies and research have been done. And it’s been found that we people pay more around 12 to 18% more when we pay with a technology other than just using cash. So be mindful about that. That’s that’s actual real money for sure. Over the course of a day, not so much. But a week, year, a couple of years. 12 to 18% is a massive, massive number. And I know that so many of us, certainly myself included, I’m interested in having 12 to 18% more money than not having it. And so if you’re looking for ways to cut expenses or cost, well bring cash with just go the old fashioned way, use the envelope budgeting method that Uncle Dave, Dave Ramsey is made famous, and it absolutely works. So it takes discipline to do that. But that’s what we’re looking for when we’re trying to get better money is how do we increase our discipline? So couple things can be true at the same time. I think that Apple is a really, really trustworthy company. So that makes a lot of sense. One of the drawbacks is you’re going to pay a little bit more when you use Apple Pay and does it make sense to have your your Apple Pay or the you’re purchasing and buying things directly next to how you ought to be saving your money. Well, that’s something that you’re going to need to figure out on your own. So, like I was talking about, technology’s always changing. So we need to figure out how to kind of keep up with it, when it’s also a very human thing to want to only drill down into the thing that we’re thinking about or talking about, and just look at the individual parts versus looking at your money from a total standpoint. So looking at as a whole, I think that that is a really, it’s an important thing that we all do is to look at our financial world in total versus just the parts. So having a savings account with Apple, versus having another savings account, or your emergency fund, or your brokerage account, or your other money in different places. These are just decisions that we have to make the huge news about this, it’s not just that Apple has a savings account, big deal. It is kind of a big deal. But it’s not that really a big deal is that they’re offering 4% I think it’s 4.1% that you will get for your money. That’s a big number. And that is a really, really important thing, which is what makes this newsworthy. Now, the only place that well, a couple of places. But from a traditional stock market investing standpoint, you have equities, which are stocks, and then you have fixed income to things like bonds. So stocks are traditionally more growth vehicles, considered more aggressive, fixed income, more conservative, more, more, more fixed, more, more guaranteed, if, if you will, and over the past 20, some years, the only option from a traditional investing standpoint has been the stock market. Because interest rates had been so low for so long, then it was kind of a bummer for conservative investors who would think that 4% is a really great thing, it was not easy to get that. So now you can get that in a savings account from Apple. Well, that’s a super powerful thing. And if you don’t think the 4% is compelling, well, let me break it down for you. So and before I do that, one thing I’ve always been telling people is, it’s important to have an emergency fund. And I advocate that your emergency fund be six months worth of expenses. And I don’t just casually say that, go, you know, just save up six months, I know that that’s a lot of money. And I know that it’s really, really hard to do. And I also know how incredibly impactful and important getting to that number is, once you get six months worth of expenses saved up, get yourself out of credit card debt, that’s financial peace of mind, you can let the weight stress come off your shoulders, take a breath, like wow, I’ve got a little bit of breathing room, I actually, I actually feel good, I’ve got financial peace of mind. So not easy to do that, but worth doing. So however long it takes you to get to six months, put a plan together and start executing on that plan. This is where those little small bits, small bites small margin of 12 18%. If you paid cash, instead of using a card or some kind of a technology to buy things. That’s that’s how you get to that number. So anyway, assuming the median household income in the United States this year, or last year was around $70,000. Okay, so $70,000

that is essentially one month is $5,800. So six months worth of expenses of income is $35,000. It’s a lot of money to be saved up. But that is that’s that’s that’s the number if you wanted to have a fully funded emergency fund. Al, you were able to put that into your apple savings account and get a 4% rate of return, you would get $1,400 a year. So is that compelling to you? Versus essentially zero, that for the average, the average rate on savings accounts outside of this Apple account is around point 4%. So, obviously extremely, extremely substantial number $1,400. But what if you’re 30 years old, 30 years old, you’ve got your financial act together. You’ve got your fully funded emergency fund of $35,000. And you did that for the next 35 years intend to retire at 65 4% $1,400 a year contributions that equates to over $110,000 So now that’s absolutely real money. So, versus just your traditional, very, very, very low interest rate, you would have whatever money that you actually put into the account. So massive swing. And I think that that’s really, really compelling. So I wanted to close the closed loop one a thought that I was rambling on about that, I always encourage people to resist the impulse to invest their emergency fund, I’ve got 35 grand, there’s an opportunity cost, I need to have this invested. That’s very, very, that makes sense. But the last thing that I want is for you to have this money invested in the stock market, to have an emergency to go get the money that you need to pay for set emergency only to have the stock market gone down by 20 3040 50%, then you’re in big trouble, you did the right thing by saving your emergency fund that you hadn’t invested. So you don’t want market conditions to have an influence over your emergency fund. A savings account, it’s giving you 4%. Well, that’s a whole nother a whole nother animal, and way too good to pass up in my estimation. So safe way to get that money. Again, 4% on 35 grand, which is the average American household income median, rather, well, of course, 35 years comes out to over $110,000. So step number one, get your emergency fund set up, put a plan together for doing that. Step number two, look at everything in total, look at all your finances, figure out what makes sense for you what accounts make sense. And if he could do with an extra 4% on your money, this could be a really, really great option. And step number three, just realize that things are gonna constantly be changing. And the way that we interact with money is going to constantly be changing. But these principles are 100% always going to be true. So we need to save less than we earn, need to be disciplined, we need to make good decisions and just fundamentally save money. The whole Millionaire Next Door thing, it’s a book from many years ago, and one of the key takeaways was what’s the real big driver of somebody who is who didn’t inherit money. They’re first generation millionaire, it’s that they saved around 15% Of all the money that they earned. So anyway, to get to a million bucks by the time you’re 65. You know, you’re 30 years old, and you take advantage of this. You’re our 1/10 of the way there essentially. So Alright, check it out. I will link to the article in the notes. And, as always, do your part by doing your best

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