Friday, December 16, 2011

Importance of the Savings Account

Oh yeah that 3rd account of the portfolio that never gets attention. Well its time for it to step forward...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Today really highlights the importance of having a savings account funded and ready to go. Its easy to look at the yield of dividend investing or the gains from forex trading and think that is where the big returns and gains will come from. However the savings can have ninja profits.

What is a ninja profit? One that we never see and never know about. For example, today the tire cost me $125 and the tearing out of the lug nuts was $50 for $175 total. Lets say I didnt have insurance to cover the tow and didn't have savings money ready I might have had to have left my car by the street and try to raise the money by selling a position of stock. It can take 3 days before the money settles before it becomes live in our accounts that we can withdraw it. Oh and today was Friday so really we may not have had access to the money in cash form until potentially Wednesday. 6 days my car could have been on the side of the road. What are the odds that the police would have tagged my car and then towed it as abandoned?

I honestly have no idea how long it would take for that process to play out but I could see having to pay for that tow, and a second one to get the car out of the impounding lot. Plus whatever fees the police want to tack on. $175 total? I still need my tire fixed so the total bill is $350. By having savings money ready I potentially saved double the fees later, a 100% profit! That's not even counting if I had to use a credit card.

Now that was an extreme example I admit but I never want to be even close to that risk.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others.
I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. OMG man ... I've always had a secret dread that someday I'm going to lose that dang thing! Came close once. Mechanic was fixing a ball joint, and accidentally forgot to put the lug key back. Just about gave me a heart attack.

    Amen man. Cash = utility

  2. Experts reccommend starting a rainy day fund that has 3-4 months of your annual household income in it. This may seem like a lot but if you save bit by bit, you can do it!