Hey everybody welcome back to whiteboard Finance my name is Marco and I'm here to Help you Save money still be a loser to inflation But at least for making more money on The interest that's in these accounts That are going to be mentioned so Savers Are losers we all know this inflation Erodes your purchasing power if the Amount of money you're getting in your Savings account is not meeting or Exceeding the rate of inflation you are Losing money literally so what I decided To create this video was to show you About four or five places where you can Park your money right now where you'll Get essentially a risk-free almost Guaranteed rate of return uh with at Least four four and a half percent or so Going higher as we go along in the video So let's get right into it so the first Thing I wanted to start with is a Vanguard money market fund so I do a lot Of talking about Vanguard funds I have a Lot of money with Vanguard from Especially for my Roth IRA look at this Dude right here I gotta so when I went On the website this dude is jacked look At look at his vascularity right there Like look look how serious he is signing This contract yeah I think what uh what His what is manager or whoever this Model is I think they want him to Transition uh from Vanguard money market
Funds Uh to action movies Hey how'd you get how'd you start your Career bro oh dude I was in this Vanguard Federal money market fund Um but all joking aside uh if you Haven't heard of these things there's a Bunch of them so if you scroll down here Um you can see that a lot of these are Yielding basically anywhere from 2.74 Which is not good right now uh all the Way up to 4.55 okay 455 basis points so Some of you are probably getting you Know 3.3 3.4 percent in your money Market account or your high yield Savings accounts Um again this video will show you how to Squeeze out Um significantly more and I'll show you The calculations uh once we get further Into the video so the most popular one Or the one that I see people most uh Talking about is this vmfxx basically What this is it's an open-ended fixed Income mutual fund it basically invests In high quality short-term money market Instruments issued by the US government Um so you can see right here if I zoom In Uh you can see that the seven day SEC Yield basically what this thing is Averaged over the past seven days is 4.52 percent if you look at the expense Ratio it's 11 base points Point eleven
Percent uh and once you figure in taxes And things like that which we won't get Into because Um some of these things are treated Differently in this video we're going to Talk about like four different types of Assets but let's just say you're getting Around 4.4 on your money with this not Talking about taxes so basically what This does is it's pretty much an Open-ended mutual fund you have to Invest at least a minimum of three Thousand dollars Um people typically use this when they Have their money parked in their Brokerage account and they're not using It to invest like say they're not say They want a dollar cost average and not Do a lump sum for example Um this is when they'd have some money Sitting in this fund earning them Interest I mean you can put up to However much you want in here um but you Know it's not necessarily something that People seek out it's just a convenient Thing if you have Vanguard so this Basically benchmarks its performance off Of the Citigroup three-month U.S Treasury bill index and you can kind of See The Benchmark down here you can kind Of see since Inception of 1981 it's Average 3.88 percent when we're in Periods of super low federal funds rate Or interest rates you can see over the
Past 10 years it's only averaged about 0.75 percent okay and then if you look At like quarterly after tax returns you Can see it returns before investing on This first line you can see it returns After taxes and then you can see it Returns after taxes on distributions and The sale of the fund shares so this is Just an easy way to park your money if You're with Vanguard most brokerages Offer something like this okay I know Fidelity does I know Schwab does but Just be mindful of what that expense Ratio is okay now here's a little love From Cleveland Ohio okay so this is Third Federal they're a pretty big Branch of banks here in Cleveland Ohio Um they're they're National I think they Have locations in Florida all throughout Ohio that those areas but this is an Online bank I don't think you have to Live in the states that they have Branches physically in it's kind of like A Capital One 360 where you can live Wherever you know it's an online bank They give you a high interest rate so This is cool because I know that this is A legitimate Bank this isn't just some Random fly by night Um you know High promotion High apy you Don't even know if they're going to keep Their banking Charter in 10 years this Is a legitimate you know bank that you Know they have multiple multiple
Branches all throughout Ohio and all Throughout the country so I got an email From them I want to say 15 days ago or So just a little over two weeks ago and They're promoting their 4.3 online Savings Plus account I'm not affiliated With them in any way Um I do have a HELOC with them that I've Never used but Um again they're a bank that I like know And trust so if you're looking at stuff Like this you may want to look at like a Bankrate.com so Bankrate will tell you Like hey you can sort by interest rates You can sort by you know whatever you're Looking for this happens to be one of The highest ones that isn't a you know Very Um exclusive like Credit Union or you Know club or something like that this is Accessible to pretty much anyone the Nice thing is is there's no monthly fees There's no limit on your monthly Transactions it is FDIC insured uh the Only two caveats is that it's going to Be open and managed online which is fine To me that's actually a benefit and then You have to have a minimum of five Thousand dollars to open and earn Interest so I just put in like 10 grand In here I want to say about a week ago I'm still in the process of getting that Account created otherwise I'd log in and Show it to you the nice thing about this
Is that you're not locking your money up This is just a savings account but if we Are talking about locking money up let's Talk about the next thing on our list Which is a five percent annual Percentage yield with an 11 month uh Capital One CD okay so to get this rate You have to deposit these funds Um I believe by March 14th which you can See right here so if you go down to the CD a lot of people when they think of CDs this is CD just stands for Certificate of deposit you think of like Your grandparents right you know it's Like oh I'm locking up some money in a Two-year CD you know it's just like okay To me the opportunity cost is not worth It but when you have something that's a Guaranteed rate of return essentially Risk free Um you know five percent is pretty Significant it's actually more than that It's actually show you why it's more Than that so if we want to calculate the Savings at maturity uh this is an 11 Month CD remember it's not Um a 12 month so if we type in let's Just say we're investing ten thousand Dollars And it's promising us five percent Interest over 11 months this is actually Coming out to be if you can see this 5.116 so if we were to invest 10 grand Into this Capital One CD
Um the yield that maturity would Actually make 468 or 42.55 uh per month Uh this is actually compounded monthly Which is pretty cool so uh it'll Actually show you the calculation right Here as well I just wanted to do it on This because it breaks it down a little Bit nicer but let's just say an example Of hey you know let's just say you are Older and you have you know six figures Sitting around not doing anything with It well guess what uh at maturity it's Going to make you almost five thousand Dollars you know 425 dollars a month That's nice it could take care of you Know a lot of expenses at that age let's Say you're sitting on cash on the Sidelines or you cashed out your Brokerage account and you have half a Million dollars and you want to lock This money up for 11 months well at this Point you're still losing money to Inflation would we know this but you Know with half a half a million dollars You'd be making right around twenty one Hundred dollars a month for a lot of People this could take care of a Mortgage you know couple car payments You know all their expenses and bills And things like that and you'd basically End up with Um twenty three thousand four hundred Dollars more makes sense so before we Get into our next asset class which is
Actually yielding more than this CD for A shorter duration which is always good Uh here's a word from today's sponsor MooMoo today's video is sponsored by MooMoo which is a commission free mobile Trading app available for us Singapore And Australian users it is backed by Futu a NASDAQ listed fintech that has Been in the finance industry for over a Decade MooMoo offers impressive trading Tools for both beginner and advanced Investors some of the features include Advanced charting pre and post-market Trading international trading research And Analysis tools and most popular of All free level 2 US market data I like Mumu because it is a platform that you Can start using as a beginner and grow Into over the years as you become more And more experienced as an investor we Can play Simple buy and sell orders but Also start using more and more of Moomoo's advanced research and trading Features down the road since we're right Around the corner from earnings season I Wanted to highlight one of the many Features that MooMoo offers which is Their earnings calendar this is an Insightful clear and customizable Earnings calendar right within the MooMoo app that easily displays the Release dates of earnings reports for a Specific date all you have to do is open Up the MooMoo app tap markets tap
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Gonna say something stupid was gonna Offend a lot of people Here's my money go do your thing Overseas setting up military bases Everywhere Oh look at protect your freedom all Right stop I just lost half my Subscriber base uh basically this is a Risk-free it's I mean it's considered to Be risk-free you are loaning the Government money for a set period of Time uh they give it to you at a certain Rate and you are returned this amount of Money at that set time the common Question that I get is hey you know your Math is wrong you're only getting a Fraction of what this return is how come You know if you put in a hundred Thousand dollars why aren't you getting You know 5151 at the end of 12 months or whatever That number is Um the reason for that is because this Is only these numbers are an annual Percentage yields this to make Everything in Apples to Apples Comparison but you're only getting it For a fraction of that time remember We're not holding this for a year this Is annual percentage yield annual means 12 months we're only holding this for Six makes sense okay so if that math Doesn't make sense I'll show you a real Life example so this is my Twitter
Account if you don't follow for me it's A whiteboard fin fin I bought 150 000 Worth of T bills on February 14th on top Of the 50 Grand that I bought about a Month ago these are both going to mature On March 21st so if this math doesn't Make sense here's a real life example so Uh you have the par amount this is Basically the amount that you are quote Unquote buying and then you have the Price per hundred dollars which you can See right here and that gives you your Investment slash interest rate again This is an annual basis so if you Remember that par amount the par amount For the 50 uh for the 50 000 purchase Was fifty thousand dollars however the Amount that's being taken out of your Account is forty nine thousand six Hundred forty eight and forty four cents Okay because what's happening is you're Getting this fifty thousand dollars at This discount right here and this was Only for like I think a two month T bill Um so what happens is whatever your Source of funding is this number's 10 Taken out and then when that uh maturity Happens which should be March 21st in This case I'm then deposited this amount The par amount fifty thousand dollars uh For a total of 351.56 now keep in mind This is only for two months it's an Eight week T bill which you can see
Right here Um it's not a 12 month T bill this Number would be much greater uh and then This 0.9929 would be a smaller number Giving me a smaller deduction and then This would be the higher number and then Which makes this a higher number I hope That makes sense so uh finally the one Thing I wanted to talk about was this Save better website so this is basically A website that kind of curates a lot of Different uh local banks Regional banks Credit unions this is why I talked about Third Federal first because Third Federal is an online bank I'm pretty Sure you can sign up from pretty much Wherever as long as you're a US citizen With these Banks there's going to be a Little bit more stipulation so it may Not apply to everyone that's why that's Why I saved it for last but the cool Thing is is you have three tabs here you Have savings you have high yield CDs and Then you have no penalty CDs if we're Just looking at savings accounts this at A bank at a bank and then Western Alliance and then great lakes in the Atlantic and then the state exchange These all beat the 4.3 percent from uh Third Federal I just don't know what uh Stipulations you need to become a member Of these credit unions or these Banks Now if you look at their high yield CDs This is the highest one that I've seen
However Um actually sorry it's the same as the Um Capital One 360 at five percent but Look at the maturity it's 17 months You're basically locking up your money For 17 months which in my opinion is way Too long especially if we go through Price corrections I like to keep a war Chest of liquid money Um so to me that this CD right here the Capital One is a much better deal Because you're locking it up for 11 Months as opposed to 17. however if you Look at this you can get Uh 5.1 uh sorry 5.151 for six months so it's a smaller Duration it's backed by the government Uh federally tax-free you don't have to Pay taxes on the gains federally you Have to do it locally though on the State level and it's 5.15 percent So I hope this video helped you I know This stuff's kind of dry but if you're Sitting on a bunch of money and you're Scared to invest and you have tens of Thousands of dollars or hundreds of Thousands of dollars or if you're saving For a home for example instead of Putting it in the market you can always Put in something like this where there's Much less risk involved that's why the Interest rates are lower Um obviously you have to realize this as As investors we are compensated for the
Amount of risk we take on so if Something isn't risky at all you can't Be expected to be compensated a lot for It if something super risky like a Startup or venture capital or a private Equity for example then you're being Compensated more because there's a Higher level of risk so I hope this Makes sense I've been grinding the Reason I didn't post for two weeks is Because I interviewed four professors For whiteboard Finance University so Right now we have a real estate Professor on board we have a stocks Professor on board an ETFs Professor on Board and a personal finance uh Slash Budgeting Professor on board and if you Don't know what it's going to be it's Basically just going to be a school Think of it like a gym membership you Pay a monthly fee you get access to Everything you get access to me once a Week on a private live stream and then Also those four professors teaching you Things every single week it's going to Be awesome so I've been grinding that's Why I didn't post the last two weeks That should be live within the next Month or so but we are trying to build Out content ahead of time so sign up for The waiting list down below and then Also thank you for MooMoo for sponsoring This video have a prosperous Day
Hey Grandma Yeah I just uh just bought some tea Bills Oh you know the song we play We Buy T-bills okay hold on let me let me put It on for you
