Can You Max Out Your Checking Account?
Last week, I discussed how we tend to "See money, Spend money".
The more cash we have in our checking account, the more likely we are to spend it.
But a question arose: What else could that extra money be doing for us?
In the short-term? Not much.
In the long-term? A lot.
The opportunity cost of excess money just ~vibing~ in your checking account can be tens of thousands of dollars long-term.
How? Let's say you consistently kept an extra $10,000 in your checking account (Note: this is excluding any sort of emergency fund).
Over 10 years, assuming 7% annual growth in an index fund, that could turn into $20,000.
After 20 years? That $10k could be nearly $40,000! That's real, inflation-adjusted USD-Babyyy.
Keeping excess cash for emergencies is wise and encouraged.
Anything on top of that and you might have tens of thousands of missed dollars over the next 20 years.
Nobody wants that, so what can you do about it this week?
First, see if you have excess cash in your checking account. If you do, reach out to Fidelity, Schwab, Vanguard, or another licensed brokerage firm and ask them what you could be doing with that cash. Make sure the fees on what they recommend are tiny tiny (0.2% or less).
Then, Move! That! Money!
In 20 years, you'll be glad you did.
So, can you max out a checking account? Okay, technically no.
But, can you miss out by keeping too much cash in one? Yes.
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