Building a Savings and Investing Web (S.I.W.)

So you have a full-time job and/or a business and are starting to make some money.  You see your balance on the plus side in your checking account and you are accumulating more and more each time you check your funds availability.  Though you are thrilled, you are now in a conundrum. You need to figure out what to do with the extra cash: sure, you can spend it on the latest and greatest gadget out there…  Tempting. OR you can build a savings and investing web and begin to put those excess funds to work for you.  Read on my friends.

What do I mean by a Savings and Investing web?

Simply put, a Savings and Investing Web (S.I.W.) is a collection of accounts that allows you to seamlessly transfer money from one source to another.

The typical setup of a S.I.W. is made up of these core accounts:

Checking Account

This is your main account where you will want to deposit your money.  The main reason for this is that checking accounts do not have withdrawal limits whereas some (i.e. most) MMAs/Saving accounts limit how many times you can make a withdrawal over a certain time period.

This checking account will serve to be the account from which you funnel all your hard-earned cash to where it needs to go; ideally, you want to put all your extra cash to work making money for you.

The goal for this checking account is to have enough money available to cover day-to-day expenses for a certain time period, ideally 15 days.  Then the excess cash gets moved to other accounts where it goes to work for you.

A few things to look for when opening up this account:

• Online Bill Pay is a must.  Any bank worth their salt will offer this service complementary to its customers.
• Fee-Free.  With the advent of the internet, you can find checking accounts online that are fee-free no matter what balance you maintain in the account.  I personally am using bricks and mortar US Bank that charges me monthly but then reverses that fee, so essentially I’m paying $0 (so long as I’m on direct deposit).  If they ever start charging, it is time for me to change.
• Interest?  This is a tricky one.  What I have found is that most bricks and mortar banks will not have any interest being paid on the checking account balance.  I did, however, find that my current online bank provider does pay .20% interest at the moment. Giddy up.

Be sure to check out: Do checks expire?

Savings/Money Market Account (M.M.A.)

This is the account where you put all the excess cash that you are not yet ready to deploy into other investment vehicles.  This can also double as your emergency savings account as well. Ideally, this account pays you a good amount of interest when compared to the national average and is FDIC insured.  I have personally used CapitalOne360 (formerly ING) for the past 10 years and have been very impressed with their services. If you want to open up a savings account, please use my affiliate link here.

A few things to look for when opening a Savings/MMA account:

• FDIC insured.
• Top interest rate.  A quick Google search will show you the top paying interest rates.  Compare how your interest rate stacks up against competitors. If your current interest rate is not competitive, it is time to seriously consider switching.
• No Fees.  Especially with this type of account where withdrawals are limited, you are essentially lending money to the bank to hold and invest on their behalf.  You should not have to pay for this privilege.

Brokerage Account

This is the account where you buy your stocks, mutual funds, etc.  This is where your acumen as an investor will really pay off. If you can pick your own stocks, you have life made in the shade.  The key is to view stocks as not some magical number, but ownership shares in a company. Begin to think this way and your whole investing outlook will change for the better.

A few things to look for when selecting a brokerage account:

• Ease of transfer of funds.  Simply put, the firm should make it relatively easy to access your money.  Sure, they’ll make you jump through some hoops for security reasons, but overall the company should be very easy to work with.
• Ease of dealing with the firm.
• Lower cost of buying shares.
• FDIC Insured.  Remember, this doesn’t protect your investments from market losses but rather from a defunct brokerage firm.  This is a very good thing considering

In addition, you might tie in the following accounts as well:

• Cryptocurrency Investment Account
• Credit Card Accounts
• Mortgage Account
• Lending Club Account

The idea of the S.I.W. is for you to be able to send money quickly and easily across any of your accounts in only a matter of a day or two.  The Financial Freedom seeker is always on the lookout for a deal and being able to move money easily from one account to another is a must!

One last caveat; the S.I.W. won’t work unless you are routinely budgeting and have a budget day already set up to figure out the transferring of funds back and forth.

Good luck and Happy Hunting!  As always, email me with any questions or post them on the comments section below.

Upwards and Onwards towards Financial Freedom!

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Disclaimer: (1) All the information above is not a recommendation for or against any investment vehicle or money management strategy.  It should not be construed as advice and each individual that invests needs to take up any decision with the utmost care and diligence.  Please seek the advice of a competent business professional before making any financial decision.

(2) This website may contain affiliate links.  My goal is to continue to provide you free content and to do so, I may market affiliates from time-to-time.  I would appreciate you supporting the sponsors of MoneyByRamey.com as they keep me in business!