On Take It To The Bank,
00:00:01.36\00:00:02.73
you will find ways
to get out of debt,
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solve your credit card problems,
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how to make and
stick with a budget,
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simple ways to save,
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buying or selling a home
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and many more financial
matters on Take It To The Bank.
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Hi, my name is Cordell Thomas
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and welcome to
Take It To The Bank.
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Today, we are gonna
talk about something
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that's actually
quite exciting, banking.
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Take It To The Bank, of course
it ties right into the title.
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I think it's quite interesting
to look at a couple of issues
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that I was just made aware of.
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One is this,
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did you know that
there is a poverty industry?
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The term poverty industry
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refers to a wide range
of money making activities
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that attract a large portion
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of their business from the poor.
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Businesses in
the poverty industry
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include same day,
payday loan centers.
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Some individuals
who are in poverty
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are not trustful
of banks and at times
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they will take their paychecks
to a payday loan center
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and pay a fee
to get their money.
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Not understanding
that they are benefits
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to putting money in the bank
and making it work for them.
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In addition they
consider pawn shops, casinos,
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liquor stores, tobacco stores
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and other credit card companies
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as a part of that industry,
there are also illegal ventures
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including loan sharking
and other unhealthy activities
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that people do
get involved with.
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The poverty
industry makes guess what,
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roughly $33 billion
with a "B" dollars per year
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from that
market, those in poverty.
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Now, another
part of the industry
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includes a legal
side of this industry.
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What do I mean by that?
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Well, if you are in poverty
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they also need policing systems,
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they also need
social services systems,
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they need charities to help out
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and do certain
things in those communities
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to try to bring them up.
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But what is quoted,
there's a little doubt
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that many of these
organizations benefit
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from financially and create jobs
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based on this industry.
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But it's also stated
that such organizations
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spend more time giving handouts
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and defending the poor
rather than helping them
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move up in society.
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It's interesting to take a
look at how we see banking,
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banking through simple interest
or as well compound interest
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provides money,
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work on the money that
you have in the account
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and many of us tend to
look at banks in a different way
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when we don't
completely understand
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what banks actually provide.
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So what we're gonna do today
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is have a wonderful conversation
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about the bank, the bank.
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Now, I would like to bring
one of our area experts in,
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her name is Ms. Regina Manning
and ask her several questions
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about why it's--
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what is the most important
element of money management
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and we will start
up with that area.
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Regina, what do you think?
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What is the most important
element of money matters?
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Most important
element of financial training
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or management would
have to be tracking,
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that's where you are watching
where your money is going.
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You're making up a
check back in your--
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Then you are trimming,
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you are also then
controlling your expenses
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and while you are
doing that you are training
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that's another area
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where you are
actually learning to read.
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You are getting information
about how money works.
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And you can do
that by reading books,
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listen to CDs.
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One of the best
books I found so far
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was "Debt Free Prosperity"
and that covers those areas.
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But that's the
most important I think
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is actually being
able be debt free.
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Thank you, Regina.
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I have a second
question for you.
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Should our young people be
more engaged in money issues?
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What are your thoughts?
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Yes, I think we
teach our children
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how to read regular books.
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We show them how
to ride the bicycle
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but unfortunately we haven't
thought about making sure
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that our reading for
them as that they will learn
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how to be better
handlers of money,
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And one of the books I
think is the best is called
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"The Richest Man in Babylon."
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That one actually takes,
it was very easy to read.
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It's in the story
front so it makes it easier.
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What's the, one of the
others like I stated before
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was the Four Laws
of Prosperity Debt Free
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and then there is also
the "Rich Dad Poor Dad"
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that one by Robert Kiyosaki.
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He has one
specifically for kids.
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We start getting our kids
into that, in reading that
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and then following
up with little things
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by having them save their money.
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They get allowance so
then you tell them now,
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you can use
part, you can save part
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and then you can spend part.
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In that way the
children have an idea
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that the money is not
of their pocket to spend.
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Or we do things
like for Christmas,
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you want to go ahead
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and this is an item you
want to get for yourself
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then what you want to do is,
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what you're gonna
do to save to get it?
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How are you gonna work?
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They have to know that
they have to work for the money
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that it's not just
gonna fall on their lap.
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Thank you, Regina.
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It's interesting the
information she provides
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and a lot of it is
married with a lot of resources
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that are out there.
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If you as a parent or
interested in educating
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your young person
about how this system works
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and beginning to introduce
them to the banking industry
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and what it actually means
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is there is a lot of information
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and resources that you can use.
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And as we talk
about banking today,
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I think you are gonna see
some wonderful information
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about how you can use your money
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and make your money
work better on your behalf.
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There are lots of things
out there, the money guide,
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introduction to
money management for kids
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at age's eight to twelve.
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We are using some
of that information
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for my own son about, you know,
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letting him know
what an allowance is about
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and how he can use an allowance
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and why
allowances are good things.
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But you don't just get allowance
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because you exist,
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you have to work
for an allowance.
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And the things you have to do,
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one of the big things
is going on in my household
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is my little
daughter who is four-years-old
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she thinks that it's
cool to get an allowance, yes.
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But what she thinks is
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if I'm good to my
brother, can I get an allowance
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or can I get a star on
my good behavior chart?
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No, it doesn't
necessarily work that way.
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You got to work for it.
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So you got to make your bed
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and you got to do certain things
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so that they can understand
that money has to be worked for
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and has to be earned.
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And then you can
turn around and understand
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how you can pay tithe,
how you can put savings away
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and then you can figure out
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what it is you want
to buy with the money
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and plan for in reference
to their short term goals
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and understand
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that the first
thing you have to do
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is pay Christ and pay yourself
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and then take off the other
things that happen in life.
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So we're gonna continue
this conversation with Regina
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with a third question.
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Regina,
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why the lack of emphasis
placed on financial literacy
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in our schools?
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Schools actually
what they do is--
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we're in the process
or schools are in market
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or the business of
educating our students
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and so they
don't have the mindset
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of a business person.
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So they are
considered to be as we heard
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in certain
realms are called 95ers.
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It's basically go to school,
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get an
education, get a good job.
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The 40/40 plan that used to
be and then you will be fine.
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Business people
are the five percenters
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and they are the ones that
understand how money works.
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So they are the
ones that are making sure
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that their children understand
how money is actually used,
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how it's gained.
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So we need to
work a little bit more
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in the process of
teaching them in the schools
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from the mindset
of a five percenter.
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Understanding that
just like going to college,
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not everyone is
going to good college
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we need to
understand not everyone
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is going to be an entrepreneur.
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So we still need to have them
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but they still need to
know how to handle their money.
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Interesting
information. Thank you, Regina.
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As we move forward
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I think the context of
what we're talking about now
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is if we are able to
teach our young people
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about these specific
issues and understand
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that if we are able to
teach you how to budget
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which we need to
talk all the time about is
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"Do you have
your budget in place?
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Do you know what
your budget is about?"
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And guess what?
Your young people,
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your kids are going to
learn from your behavior
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that's the key in
reference to transitioning
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this whole mindset of money,
00:08:47.29\00:08:49.29
understanding financial literacy
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to our young people.
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It starts with you as a parent,
as a leader of your family
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to tell the kids
that it's appropriate
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to pay card first.
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To put money into savings.
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To understand that in
reference to gaining wealth
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and making Christ's gift
the Holy Spirit gifts to you
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in reference to wealth
work, work in the right way
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and we don't
have to get caught up
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in this issue
called consumerism.
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There are two people in life,
00:09:17.15\00:09:18.75
there are consumers
and there are producers.
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Many of us get
caught up in the ideal
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of I want the next tennis shoe,
I want the next pair of jeans,
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I want that next
iPhone, I want that next,
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I want that next.
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Do we really need
it? Do we really want it?
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Is it something that
will enhance our life?
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Will it enhance our well being?
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Will it enhance
the kingdom of God?
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And those are the kind of things
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we got to really get
across to our young people
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that it's important to
use our talents and our skills
00:09:43.98\00:09:48.32
and those things that
the Holy Spirit provides us
00:09:48.35\00:09:51.05
in the benefit
of Christ's kingdom.
00:09:51.09\00:09:54.09
Very important information.
I have another question.
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I'm gonna ask
Regina to come back
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and that question is,
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"What do you
consider the parent's role?"
00:09:59.63\00:10:02.23
Can you answer that for us?
00:10:02.26\00:10:04.57
Start teaching your child today
00:10:04.60\00:10:06.87
and start
teaching yourself today.
00:10:06.90\00:10:08.90
Prepare yourself
to teach your child.
00:10:08.94\00:10:11.04
You wait till
they are in high school
00:10:11.07\00:10:13.58
as far as are close to
high school for driving.
00:10:13.61\00:10:16.41
You teach them everything.
00:10:16.44\00:10:17.78
From the minute your
child receives a penny
00:10:17.81\00:10:19.85
is the beginning of
when you start showing them
00:10:19.88\00:10:22.42
what money is and
that the value of it
00:10:22.45\00:10:25.45
but it's not
everything in the world.
00:10:25.49\00:10:27.09
So start today,
educating yourself
00:10:27.12\00:10:29.09
and your children.
00:10:29.12\00:10:30.86
Thank you, Regina.
00:10:30.89\00:10:32.23
Interesting
information, educate.
00:10:32.26\00:10:34.10
It's a part of who we
are and it starts with you.
00:10:34.13\00:10:37.57
Budgeting is key.
00:10:37.60\00:10:39.00
If a child sees and
you can answer them,
00:10:39.03\00:10:41.50
you know, I mean,
whenever my child ask me,
00:10:41.54\00:10:43.71
"Can we get this, Dad?
00:10:43.74\00:10:45.07
Can we get this?
00:10:45.11\00:10:46.44
And we've budgeted
our grocery account
00:10:46.47\00:10:48.88
and we have
budgeted this type of thing."
00:10:48.91\00:10:50.25
We can actually
come back and say,
00:10:50.28\00:10:51.61
listen, son, I would
love to get it for you
00:10:51.65\00:10:52.98
but it's not a part
of our budget right now.
00:10:53.01\00:10:54.35
We can't really afford to get it
00:10:54.38\00:10:55.72
at this point in time.
00:10:55.75\00:10:57.09
It's not a part of
something we planned for.
00:10:57.12\00:10:58.45
If in fact, that is key
00:10:58.49\00:11:01.69
he is more willing
to sit back and say,
00:11:01.72\00:11:03.06
"Wow, okay, cool.
00:11:03.09\00:11:04.43
We have budgeted for it
00:11:04.46\00:11:05.99
it's something that
I don't expect to get
00:11:06.03\00:11:08.86
but I have at least ask for it."
00:11:08.90\00:11:11.23
The media is teaching our
kids to be very persistent.
00:11:11.27\00:11:13.40
They are gonna ask
again and again and again
00:11:13.44\00:11:15.80
and again and again.
00:11:15.84\00:11:17.17
Sometimes having these
type of things in place,
00:11:17.21\00:11:20.94
these resources
in place helps people
00:11:20.98\00:11:23.95
or helps our children to
understand in a better way
00:11:23.98\00:11:26.61
that these are things
that we haven't accounted for,
00:11:26.65\00:11:30.15
we haven't saved for
00:11:30.19\00:11:31.52
and it's not just something
we can get spontaneously.
00:11:31.55\00:11:34.66
We have to plan for it
00:11:34.69\00:11:36.02
and we have to move
forward from that perspective.
00:11:36.06\00:11:37.43
But we're here to
talk about banking
00:11:37.46\00:11:39.89
and it's an interesting
part of finance literacy.
00:11:39.93\00:11:43.06
When you take a
look at the banking issue
00:11:43.10\00:11:44.43
Their prerequisite
is to understanding
00:11:44.47\00:11:46.37
what banking is all about
and the benefits of banking
00:11:46.40\00:11:48.80
depending of what
type of bank you choose.
00:11:48.84\00:11:51.67
As we go through this whole--
00:11:51.71\00:11:53.04
the remaining
portions of this program
00:11:53.07\00:11:55.28
is going to deal with banking,
specifically online banking,
00:11:55.31\00:11:59.08
specifically the
benefits of banking
00:11:59.11\00:12:00.88
and then towards
the end of the program
00:12:00.92\00:12:02.95
we are going to talk
about our top ten list
00:12:02.98\00:12:06.45
in banking,
things you need to know
00:12:06.49\00:12:09.06
about banking that will help you
00:12:09.09\00:12:10.96
in your decision making process.
00:12:10.99\00:12:13.40
Now, prerequisites.
00:12:13.43\00:12:14.76
First of all, budgeting is key,
00:12:14.80\00:12:18.53
understanding the
context of online banking
00:12:18.57\00:12:20.24
is also a concern
00:12:20.27\00:12:22.27
and then how your
checking and savings accounts
00:12:22.30\00:12:25.54
apply to your bank account
00:12:25.57\00:12:28.14
and what it does for you
in reference to your money?
00:12:28.18\00:12:31.91
Are banks a safe place?
00:12:31.95\00:12:33.31
There's nothing
that's 100 percent secure.
00:12:33.35\00:12:36.85
In fact, that's why
they ensure your money
00:12:36.89\00:12:39.19
from the FDIC
00:12:39.22\00:12:41.02
and ensure that
up to about $250,000
00:12:41.06\00:12:44.39
which basically means
00:12:44.43\00:12:45.76
if your bank
goes out of business
00:12:45.79\00:12:48.13
and you have up to
$250,000 in that bank
00:12:48.16\00:12:51.83
the federal department
00:12:51.87\00:12:54.30
and insurance commission
will actually give you
00:12:54.34\00:12:57.67
or compensate you that
money up to that amount
00:12:57.71\00:13:00.01
that you had in the account.
00:13:00.04\00:13:02.14
It's guaranteed to $250,000
up through the year 2014.
00:13:02.18\00:13:08.38
They did it back in
2008 to sure up trust
00:13:08.42\00:13:11.39
in the banking industry.
00:13:11.42\00:13:12.75
After 2014, it will
revert back to what it was
00:13:12.79\00:13:16.06
at about $100,000
insurance, insured amounts.
00:13:16.09\00:13:21.00
These are things to keep in mind
00:13:21.03\00:13:22.36
as you look at a bank and
there are many other things
00:13:22.40\00:13:24.23
because there are many
different attributes to a bank,
00:13:24.27\00:13:26.94
different things
you can select in a bank
00:13:26.97\00:13:28.60
that fit your needs.
00:13:28.64\00:13:31.11
Now, where does your money
go? What happens to your money?
00:13:31.14\00:13:35.08
How do you spend money?
00:13:35.11\00:13:37.15
Do you use a
check? Do you use cash?
00:13:37.18\00:13:38.85
Do you use an ATM machine?
Do you use your debit card?
00:13:38.88\00:13:41.35
All of these type
of things are tracked
00:13:41.38\00:13:43.69
by your banking account.
00:13:43.72\00:13:45.05
If you in fact,
have an online account
00:13:45.09\00:13:46.86
or if you have a physical bank,
00:13:46.89\00:13:48.89
your checking
account is the hub,
00:13:48.92\00:13:51.99
your ATM drags from
your checking account.
00:13:52.03\00:13:55.73
The bank checks that you write
00:13:55.76\00:13:58.30
pull from your checking account.
00:13:58.33\00:14:00.74
Your debit card
00:14:00.77\00:14:02.10
will pull from
your checking account.
00:14:02.14\00:14:04.41
So your checking
account is the hub
00:14:04.44\00:14:08.14
that can get simple interest.
00:14:08.18\00:14:10.38
Simple interest is basically
interest on your principal
00:14:10.41\00:14:14.65
or in some cases you can
open money market account or CDs
00:14:14.68\00:14:19.59
that can provide
compound interest
00:14:19.62\00:14:21.59
which basically
means the principal
00:14:21.62\00:14:23.89
and the interest
accumulates interest.
00:14:23.93\00:14:27.83
What we want to talk
about today is making sure
00:14:27.86\00:14:29.80
that you have
established a budget,
00:14:29.83\00:14:32.33
have you looked at
living within your means
00:14:32.37\00:14:35.57
and
understanding the consequences
00:14:35.60\00:14:37.24
of not knowing
where the money is going.
00:14:37.27\00:14:39.54
There're consequences associated
00:14:39.57\00:14:40.94
with not having a budget
00:14:40.98\00:14:42.54
that include overspending,
not adhering to the budget,
00:14:42.58\00:14:47.62
not knowing where the
money goes when it's spent,
00:14:47.65\00:14:51.49
but these things are alleviated
if you are able to open up
00:14:51.52\00:14:56.02
a checking account
and or a bank account.
00:14:56.06\00:14:57.69
And in this case we
are gonna talk about
00:14:57.73\00:14:59.29
an online bank account.
00:14:59.33\00:15:00.70
Did you know those things exist?
00:15:00.73\00:15:03.50
You don't have to
have a physical bank
00:15:03.53\00:15:05.43
to have a bank account.
00:15:05.47\00:15:09.10
There are banks
that you can open
00:15:09.14\00:15:11.31
that are completely online.
00:15:11.34\00:15:12.67
There are no tellers, you don't
go into a physical location
00:15:12.71\00:15:15.71
but you can open an
account with the bank online.
00:15:15.74\00:15:19.31
What are the benefits of that?
00:15:19.35\00:15:20.68
Well, it's convenient, one,
because it's accessible 24/7.
00:15:20.72\00:15:24.72
As long as you have a computer,
00:15:24.75\00:15:26.32
as long as you
have internet access,
00:15:26.35\00:15:28.29
you can access your bank account
00:15:28.32\00:15:30.26
and track what's going
on on a real time basis.
00:15:30.29\00:15:32.99
It's easy to use.
00:15:33.03\00:15:34.83
Your accounts can be set up
00:15:34.86\00:15:36.70
so they can transfer
balances, transfer money,
00:15:36.73\00:15:39.10
you can pay bills automatically
from any computer at any time.
00:15:39.13\00:15:43.04
So there's 24/7
access. How do you start?
00:15:43.07\00:15:47.64
Well, it's a
matter of researching
00:15:47.68\00:15:49.84
what your needs are.
00:15:49.88\00:15:51.58
Do you need someone
physically to talk to?
00:15:51.61\00:15:54.15
Are you independent
and all you need is to know
00:15:54.18\00:15:57.39
if they give discount
rates for certain things?
00:15:57.42\00:15:59.82
If they give free checking?
00:15:59.85\00:16:01.49
If they can link your
accounts to student loans
00:16:01.52\00:16:04.79
so you can pay them off
and those type of things?
00:16:04.83\00:16:07.30
Once you
understand that capacity
00:16:07.33\00:16:09.30
and what you are
looking for in a bank account,
00:16:09.33\00:16:12.63
you can proceed and
then look at other things.
00:16:12.67\00:16:16.00
And what I love
about online banking is
00:16:16.04\00:16:19.01
I remember the time
00:16:19.04\00:16:20.68
when we didn't
have online banking.
00:16:20.71\00:16:23.11
I don't want to date myself
00:16:23.14\00:16:24.78
but I really got irritated
at the end of the month
00:16:24.81\00:16:27.15
when I had to write the bills
and put them in the envelops
00:16:27.18\00:16:30.49
and lick the
envelops and like the stamps.
00:16:30.52\00:16:33.46
I had a raw time.
00:16:33.49\00:16:34.86
It wasn't the most
exciting time of my life
00:16:34.89\00:16:36.66
and I avoided it like the plague
00:16:36.69\00:16:38.16
until I had to do it.
00:16:38.19\00:16:40.46
Now, I can go online,
I can click what I need,
00:16:40.50\00:16:44.10
I can make sure that
those accounts are paid.
00:16:44.13\00:16:46.57
I can automate the
payment of specific accounts
00:16:46.60\00:16:49.30
if I don't want to
deal with those issues
00:16:49.34\00:16:51.54
so they are paid automatically.
00:16:51.57\00:16:53.48
I don't do it that way.
00:16:53.51\00:16:54.84
I like to know
00:16:54.88\00:16:56.21
that I have paid this
account at this point in time
00:16:56.24\00:16:59.41
and I'm the one that,
that started the process
00:16:59.45\00:17:03.35
and it's not something
that the bank automatically does
00:17:03.39\00:17:05.92
on my behalf.
00:17:05.95\00:17:07.29
It gives me a better
methodology of tracking
00:17:07.32\00:17:09.69
the expenses that go out.
00:17:09.72\00:17:11.83
There are other
things that are beneficial
00:17:11.86\00:17:15.40
in reference to funds transfer.
00:17:15.43\00:17:17.47
If you're student you can link
it to your parents' account,
00:17:17.50\00:17:19.97
if things aren't
being managed as correctly
00:17:20.00\00:17:22.30
and it's also a
very good teaching system
00:17:22.34\00:17:25.21
that parents can use
00:17:25.24\00:17:26.57
to keep in touch with their kids
00:17:26.61\00:17:29.11
and understand the context
of their management of funds.
00:17:29.14\00:17:31.41
But it starts early in life.
Statements are sent to you.
00:17:31.45\00:17:35.78
Online banking
provide the statements
00:17:35.82\00:17:37.45
on a monthly or
even bimonthly basis.
00:17:37.49\00:17:39.45
They should be
accurate but they can't--
00:17:39.49\00:17:41.89
you can't have confidence that
the bank is right all the time.
00:17:41.92\00:17:45.73
Don't trust that they
are gonna be accurate.
00:17:45.76\00:17:48.20
They could be off
by five or six cents,
00:17:48.23\00:17:50.70
they could be off by $50 or $60.
00:17:50.73\00:17:53.37
It takes you being
committed to managing the funds
00:17:53.40\00:17:59.37
that you are given to manage
00:17:59.41\00:18:01.84
in the most
appropriate and accurate way.
00:18:01.88\00:18:05.08
So every time your statement
comes in, look it over.
00:18:05.11\00:18:08.65
Understand that
it's important to know
00:18:08.68\00:18:11.29
that yes, I wrote these checks
or what if one of your checks
00:18:11.32\00:18:16.99
or couple of your
checks or checkbook was stolen
00:18:17.03\00:18:19.66
you would never know
or you would find that out
00:18:19.69\00:18:23.13
if you saw some checks
coming through your account
00:18:23.16\00:18:25.00
that you weren't aware of.
00:18:25.03\00:18:28.24
The hub of
course is a checking--
00:18:28.27\00:18:32.04
provides additionally good
record keeping information.
00:18:32.07\00:18:35.94
You can reconcile your
bank accounts sometime online.
00:18:35.98\00:18:39.98
The online statement
gives a check register,
00:18:40.02\00:18:42.95
it provides you
several different elements
00:18:42.98\00:18:45.25
that can provide
you peace of mind
00:18:45.29\00:18:47.99
anytime you need it.
00:18:48.02\00:18:49.76
It's interesting
00:18:49.79\00:18:51.13
how technology has changed
the way we've done things.
00:18:51.16\00:18:53.33
I remember the time
when, okay, the bank shut down,
00:18:53.36\00:18:55.70
it's closed you are done.
00:18:55.73\00:18:57.47
You can't do anything,
00:18:57.50\00:18:58.83
You can't get
access to your money,
00:18:58.87\00:19:00.20
you can't go and
talk to anybody about it
00:19:00.24\00:19:03.10
and before being online
00:19:03.14\00:19:04.67
of course you
couldn't figure out
00:19:04.71\00:19:06.04
what was going on
with your bank account.
00:19:06.07\00:19:07.61
Now you have apps
on your smartphones
00:19:07.64\00:19:10.91
where you can access
your account that way.
00:19:10.95\00:19:12.45
You can access account online
00:19:12.48\00:19:14.45
and you can know what's
going on on a 24/7 basis
00:19:14.48\00:19:17.99
if that actually
works for yourself.
00:19:18.02\00:19:20.66
Now, strategies also
come up with savings account.
00:19:20.69\00:19:24.19
You can get savings accounts
00:19:24.23\00:19:25.79
along with your
checking account.
00:19:25.83\00:19:27.23
There's many
different things you can do.
00:19:27.26\00:19:29.66
One, is understanding
why it's important to save.
00:19:29.70\00:19:33.67
We've talked--
00:19:33.70\00:19:35.24
we are in the process of
talking of our budgeting,
00:19:35.27\00:19:38.61
we've talked about the
importance of budgeting.
00:19:38.64\00:19:41.34
And if you
understand what your income is
00:19:41.38\00:19:44.88
and your expenses are,
00:19:44.91\00:19:46.25
you know what amount
you could potentially save
00:19:46.28\00:19:48.85
on a monthly basis.
00:19:48.88\00:19:51.45
Make sure you consider the fact
that you pay yourself first,
00:19:51.49\00:19:54.56
you tithe first,
00:19:54.59\00:19:55.92
you understand that Christ
has given you this opportunity
00:19:55.96\00:19:58.69
to manage His funds
00:19:58.73\00:20:00.06
and it's important
to give back to Him.
00:20:00.10\00:20:02.53
From each paycheck
save first, spend second.
00:20:02.56\00:20:07.00
And even spending second
think about what you spend
00:20:07.04\00:20:09.34
and if you think about
it for two or three days,
00:20:09.37\00:20:12.07
you may not really
need it and it's a want
00:20:12.11\00:20:14.78
and not necessarily a need.
00:20:14.81\00:20:17.71
Saving your change.
00:20:17.75\00:20:19.75
At the end of each
day I empty my pockets
00:20:19.78\00:20:21.45
and put in a little bowl.
00:20:21.48\00:20:23.18
The dollars as well as the coins
00:20:23.22\00:20:25.29
and over certain amount
of times, I take that money
00:20:25.32\00:20:28.52
and I take it into the bank.
00:20:28.56\00:20:29.89
So the change that you
actually have in your pockets
00:20:29.92\00:20:32.59
put that also into savings
00:20:32.63\00:20:34.26
because it can
accumulate relatively quickly.
00:20:34.30\00:20:37.60
There are different things that
you can consider from savings
00:20:37.63\00:20:40.50
and I'm gonna
talk about a couple.
00:20:40.54\00:20:42.74
Did you know
there is a Rule of 72
00:20:42.77\00:20:45.41
it's this issue
on compound interest.
00:20:45.44\00:20:48.18
And if you
understand the interest rate,
00:20:48.21\00:20:50.45
you can pretty much understand
00:20:50.48\00:20:52.01
how quickly your
money can double.
00:20:52.05\00:20:54.02
So if your money is
in a banking interest,
00:20:54.05\00:20:56.15
that one percent
interest compound interest
00:20:56.18\00:20:58.05
your money will
double how quickly?
00:20:58.09\00:21:01.69
About 72 years if
the Rule of 72 is true
00:21:01.72\00:21:04.43
that I have a $1,000
in a checking account
00:21:04.46\00:21:06.83
and I get one percent
interest 1 X 72 is 72 years
00:21:06.86\00:21:10.30
so that money will
double in about 72 years.
00:21:10.33\00:21:12.83
If I'm actually
getting interest rate
00:21:12.87\00:21:14.97
of six percent
versus one percent
00:21:15.00\00:21:17.84
how quickly
will my money double?
00:21:17.87\00:21:19.67
The Rule of 72 tells you
00:21:19.71\00:21:21.04
that six percent
interest into 72 is 12.
00:21:21.08\00:21:24.25
Am I correct?
Yes, 12 times 6 is 72.
00:21:24.28\00:21:26.95
And so your money, now
that $1,000 will actually double
00:21:26.98\00:21:30.89
every 12 years as opposed
to once in that 72 years.
00:21:30.92\00:21:34.86
So that six percent interest
00:21:34.89\00:21:36.26
versus that one percent interest
00:21:36.29\00:21:38.36
can provide you
accumulated money
00:21:38.39\00:21:43.10
and based on
compound interest $64,000
00:21:43.13\00:21:46.43
can be accumulated in
just compound interest
00:21:46.47\00:21:48.44
on that $1,000 over
the 72 year period of time.
00:21:48.47\00:21:53.58
So take a look
00:21:53.61\00:21:54.94
at what savings
accounts are available
00:21:54.98\00:21:58.38
and how you put your
money into, into savings
00:21:58.41\00:22:01.78
and how you account for it.
00:22:01.82\00:22:04.35
Now as we talk about that
00:22:04.39\00:22:05.72
there's different
savings methodologies.
00:22:05.75\00:22:08.09
You got your
basic savings account
00:22:08.12\00:22:10.83
but then you can
also take your money
00:22:10.86\00:22:12.79
and put them into
00:22:12.83\00:22:14.20
what they consider a
money market account.
00:22:14.23\00:22:15.76
And money market
account is basically saying,
00:22:15.80\00:22:17.63
"Okay, Mr.
Banker, I'm putting my--
00:22:17.67\00:22:20.20
opening up a
money market account
00:22:20.24\00:22:22.00
and I'm giving you the
right to take that money
00:22:22.04\00:22:24.94
and invest in corporate
and government securities.
00:22:24.97\00:22:28.38
And based on the performance
of those government securities,
00:22:28.41\00:22:31.01
you are going to give
me some of that profit back
00:22:31.05\00:22:33.75
and help my account
grow that much more quicker."
00:22:33.78\00:22:37.05
The nice thing about
a money market account
00:22:37.09\00:22:38.92
is the fact that you're
limited to approximately
00:22:38.95\00:22:42.39
six withdrawals
on a monthly basis.
00:22:42.42\00:22:44.19
You are limited.
00:22:44.23\00:22:45.56
Now if it's a savings
account why would you want to be
00:22:45.59\00:22:47.50
constantly
drawing from that account?
00:22:47.53\00:22:50.40
The context of what we
are talking about is this.
00:22:50.43\00:22:54.94
There are different
features that you could,
00:22:54.97\00:22:59.17
you can research in reference
to how you save your money
00:22:59.21\00:23:02.78
and how you use
the savings account
00:23:02.81\00:23:05.75
that's appropriate to you.
00:23:05.78\00:23:07.12
There is a CD which is
pretty much a promissory note
00:23:07.15\00:23:09.12
from the bank saying,
00:23:09.15\00:23:10.49
"We are going to
invest your money
00:23:10.52\00:23:13.36
at this interest rate
00:23:13.39\00:23:15.22
over the next three
months or five years."
00:23:15.26\00:23:17.39
It's limited and
it says maturity date
00:23:17.43\00:23:19.83
there is a end date to this
00:23:19.86\00:23:21.20
and it's typically between
three months and five years.
00:23:21.23\00:23:23.93
A promissory note is
just a promise from the bank
00:23:23.97\00:23:26.67
that they will
give you this amount
00:23:26.70\00:23:28.17
over the course of
this time until it matures.
00:23:28.20\00:23:30.84
Now if the interest
rate Rises, you lose
00:23:30.87\00:23:34.04
because you're
fixed at that amount
00:23:34.08\00:23:35.41
for certain amount of time.
00:23:35.44\00:23:36.85
If it goes down, the bank loses
00:23:36.88\00:23:38.95
because you are continuing
to get that fixed amount
00:23:38.98\00:23:42.08
the bank doesn't
have that opportunity.
00:23:42.12\00:23:44.42
So there's lots
of different things
00:23:44.45\00:23:45.85
you can use to maximize.
00:23:45.89\00:23:47.82
I ask you to take a
look at your bank statement,
00:23:47.86\00:23:49.92
reconcile your bank
statement in ongoing basis.
00:23:49.96\00:23:52.89
Now, what I'd like do is
we're coming down to a close
00:23:52.93\00:23:55.53
let's take a look
at the top ten reasons
00:23:55.56\00:23:59.50
that banks are good
00:23:59.53\00:24:03.64
and that on
banking the top ten things
00:24:03.67\00:24:06.11
that you should
know about banks.
00:24:06.14\00:24:07.94
I'm going to
start with number ten.
00:24:07.98\00:24:10.15
Number ten, basically
is we talked about it.
00:24:10.18\00:24:13.62
You don't need a
physical bank to bank.
00:24:13.65\00:24:18.35
In fact, there are
financial institutions
00:24:18.39\00:24:20.06
that offer
services that resemble banks
00:24:20.09\00:24:22.76
such as credit
unions, mutual fund companies.
00:24:22.79\00:24:28.16
And of course we have
online banking capacity
00:24:28.20\00:24:31.03
so you don't even need the
physical location to go into.
00:24:31.07\00:24:34.34
Number nine,
00:24:34.37\00:24:36.44
the bill paying advantage
of online banking is fantastic.
00:24:36.47\00:24:40.11
It offers the opportunity
for you to pay your bills
00:24:40.14\00:24:43.45
through an
automated system and control
00:24:43.48\00:24:46.38
how you send those
checks in without having to pay
00:24:46.41\00:24:49.68
for the physical checks.
00:24:49.72\00:24:52.05
Number eight, I'm
gonna run through this.
00:24:52.09\00:24:55.26
Do an online search
00:24:55.29\00:24:57.89
for the best
banking options for you.
00:24:57.93\00:25:00.93
What is it that provides
you specific satisfaction?
00:25:00.96\00:25:06.43
Maybe it's free
checking as opposed to
00:25:06.47\00:25:08.84
having a minimum
balance in your account.
00:25:08.87\00:25:12.47
Okay, so search
for those features.
00:25:12.51\00:25:15.01
Number seven, nothing is easy
but take the time to figure out
00:25:15.04\00:25:19.15
what was best--
what is best for you.
00:25:19.18\00:25:22.42
It goes back to
searching and figuring out
00:25:22.45\00:25:25.25
and you wouldn't just
go into a car dealership
00:25:25.29\00:25:28.16
and plunk down money
and say give me any car.
00:25:28.19\00:25:30.63
You would research
the type of car you want,
00:25:30.66\00:25:32.96
the color you want,
the accessories you want
00:25:32.99\00:25:35.36
and then you would
discuss the best type of price
00:25:35.40\00:25:37.63
that you can get for that car.
00:25:37.67\00:25:39.23
You do the research and
then you would go and make the,
00:25:39.27\00:25:43.34
make the transaction.
00:25:43.37\00:25:44.71
Number six, ATM fees can
take a bite out of your budget.
00:25:44.74\00:25:50.95
ATMs, if you research a bank
00:25:50.98\00:25:53.72
and you find that the bank only
is regional and not national,
00:25:53.75\00:25:57.15
if you travel you
might have to pay a ATM fee
00:25:57.19\00:26:00.29
because you are
not going to that bank
00:26:00.32\00:26:02.39
that you are have
your checking account with.
00:26:02.42\00:26:05.16
So take a look of that as one
of the attributes of the bank
00:26:05.19\00:26:08.43
that you use.
00:26:08.46\00:26:09.80
Number five, shop
for the better rates.
00:26:09.83\00:26:12.53
We talked about
money market accounts,
00:26:12.57\00:26:14.87
we talked about
CDs, there are benefits
00:26:14.90\00:26:17.07
of making your money
work in a better way for you
00:26:17.11\00:26:19.94
and it's a matter of
discussing with the banker
00:26:19.97\00:26:21.64
what's in the
best benefit for you.
00:26:21.68\00:26:25.31
All right, where
are we now? Number four.
00:26:25.35\00:26:27.72
We are down to the last four,
00:26:27.75\00:26:29.08
I don't know how
much time we have left
00:26:29.12\00:26:30.45
but I'll talk a
little bit about it.
00:26:30.49\00:26:33.29
Number four is,
00:26:33.32\00:26:34.66
not all rate
calculations are equal.
00:26:34.69\00:26:36.62
Banks figure out interest
rates in different ways.
00:26:36.66\00:26:40.00
If you want a consistent
way of figuring it out
00:26:40.03\00:26:42.26
think about asking your banker
00:26:42.30\00:26:43.63
about what's considered
annual percentage yield, APY.
00:26:43.67\00:26:47.20
Say that three times.
00:26:47.24\00:26:48.57
Number three,
inflation, a brief word.
00:26:48.60\00:26:52.21
Even at low rate of
inflation the annual creep
00:26:52.24\00:26:55.34
in the cost of
goods and services
00:26:55.38\00:26:57.11
can outpace what a bank pays
in interest bearing accounts.
00:26:57.15\00:27:02.12
Think about that.
00:27:02.15\00:27:03.49
Number two,
00:27:03.52\00:27:04.85
there is a
minimum balance dilemma.
00:27:04.89\00:27:06.89
Discuss it with your banker.
00:27:06.92\00:27:08.32
Figure out the
best option for you.
00:27:08.36\00:27:10.26
Certain accounts may
require a minimum balance
00:27:10.29\00:27:12.76
others may not.
00:27:12.79\00:27:14.13
Make sure you
research before you sign.
00:27:14.16\00:27:16.43
And number one, nothing is safe
00:27:16.46\00:27:20.74
but money in the bank is better.
00:27:20.77\00:27:23.27
Money is better in a bank.
00:27:23.30\00:27:25.24
We've talked
about how it's insured.
00:27:25.27\00:27:27.21
We've talked about those
things but I would recommend
00:27:27.24\00:27:30.15
that if you want to use
the money in the best way
00:27:30.18\00:27:34.05
put it in a bank.
00:27:34.08\00:27:36.08
Remember the
story of the talents.
00:27:36.12\00:27:38.22
The Parable of
the Talents is key.
00:27:38.25\00:27:42.22
We all have an obligation.
00:27:42.26\00:27:45.26
So I'll see you later,
take it to the bank and save.
00:27:45.29\00:27:50.20
God bless.
00:27:50.23\00:27:51.57