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Poll: How much money do you have in your bank account?
- tzs 13y agoNo category for $100,000-$150,000?
- informatimago 13y agoThe minimum possible. If you recognize that banks are part of the problem, you don't want to finance them... Unfortunately, they've had laws passed to make having a bank account mandatory for some important operations, so you cannot avoid them entirely, but that's not a reason to give them all your money.
- antonius 13y ago..but that's not a reason to give them all your money. I'm curious as to how many people actually keep 90% or more of their total liquid short-term assets in a bank. It seems like a basic rule of diversification of never keeping all your eggs in one basket, including the the bank.
- marcomassaro 13y agoWhere should one keep their money besides a bank? Investment vehicles? Somewhere else?
- antonius 13y agoDepends on how you handle your finances and carry risk. If you keep 100% of your short-term assets in a bank and it goes under, under Canadian banking rules (where I'm from), only $100,000 is covered by the government. Same goes with investing all your money into a specific stock, if the stock performs poorly, your net worth takes a hit.
- marcomassaro 13y agoAgreed - so that begs the question: where does somebody who is making 500k or even a million per year keep their money to 1) have it easily accessible for purchasing things and 2) safe?
- sukuriant 13y agoDefine "easily accessible". Does a few days later count? If so, the stock market isn't a bad place for money
- mikeryan 13y agoFDIC insurance is generally on a per-bank basis. You could have multiple accounts across banks each up to $250k. Generally though there's things like Brokerage Accounts etc which offer higher levels of insurance (SIPC) and easy mechanisms to spread monies across several banks and account services (CDARS for CDs and MMAX for money market accounts). At that point hopefully you have someone managing your money wisely to help navigate these kinds of things.
- orik 13y agoAlways have some cash. You'll never know when you'll need it.
- big_maybe 13y agoLike for when you sever a finger in a kitchen accident and the surgeon won't agree to re-attach within the 6-hour window of feasibility unless you pay him up front in cash. (Really happened).
- orik 13y agoYou probably won't ever see this but I'd love to hear this story if you do see it!
- wonderyak 13y agoKeeping money in a bank is 'ok' until you hit the insured limit. 'Safe' stocks (utilities, etc), precious metals and real estate are all nominally safe investments as well.
- this_user 13y agoDepends on what your objectives are. If you would like to increase the interest received on your money, then holding a portfolio of value stocks or an index ETF will outperform your bank account by a large margin over time. This takes very little effort, but will suffer from the occasional (large) drawdown that you have to sit out or this strategy won't work. If your primary objective is capital conservation then buying high quality debt of countries would be a good idea. Singapore or Switzerland are good candidates if you consider it a real possibility that the US could default on its obligations. Otherwise you could hold Treasury bills and roll them over once they mature or you could use an ETF like SHY that holds short-term Treasury bonds. You could also buy precious metals if you are convinced that civilisation is going to end in the foreseeable future. Drawbacks are fluctuating prices and the complete lack of interest payments.
- sliverstorm 13y agoWeren't we talking about liquid assets? I don't count ETF's as liquid. Even if you can buy/sell them freely, have you ever actually tried to take money out of a brokerage? "Liquid" is the last word I would use.
- thedufer 13y agoThe usual eggs in a basket advice doesn't seem appropriate when you have an FDIC-insured basket.
- antonius 13y agoLiving in Canada and under CDIC rules, only $100,000 is covered. Thus, backing up my original post of not putting all your fiat eggs in your bank basket.
- thedufer 13y agoI suppose that's something to worry about, but only for the tiny portion of people for whom more than $100,000 is a reasonable amount of "liquid short-term assets". I don't expect to ever hold more than an emergency fund + float in cash, so that's not an amount I expect to ever exceed.
- mycroft-holmes 13y agoAn FDIC insured basket doesn't do much if a currency is hyperinflated though.
- _delirium 13y agoI would put that pretty low on my list of worries, if your money is in USD or a similarly stable currency, rather than a small one like Zimbabwean dollars or Icelandic Krona. Modest inflation, perhaps even in the low double digits, is a non-negligible risk, but Weimar-style hyperinflation in USD is a fairly negligible risk, much lower than a bunch of other risks I'm exposed to. The last time the annual inflation rate in USD surpassed 100% (which still isn't even hyperinflation territory) was during the Civil War, ~150 years ago.
- poopsintub 13y agoMr. Canada, you can put $100k in one bank then move on to the next. The same basket...with different hens?
- mikeryan 13y agoIt seems like a basic rule of diversification of never keeping all your eggs in one basket, including the the bank. I'm unclear if you're asking how many people keep 90% or more of their total liquid short-term assets in a bank or not. I'd expect most people keep most their short-term liquid assets in a bank since this is usually just their cash on hand. But this is not "all their eggs" considering their long-term non-liquid assets are probably tied up in some sort of retirement vehicles (which are hopefully diversified), and their homes.
- grecy 13y agoIn many countries bank accounts are insured by the government anyway. Usually it's up to a certain max limit like $100k or $250k.
- jrs235 13y agoEver thought about using a credit union?
- iandanforth 13y agoI agree with you philosophically but wonder about the practical side of things. Having nearly all my money available through my Visa debit card means that I can make purchases widely and easily. If I didn't keep the money there then I'd have to make transfers/deposits before making purchases. I won't use PayPal as they are also in my "evil" category. So how do you negotiate day to day purchases without hassle?
- sliverstorm 13y agoYou can always use a credit card as a buffer, and transfer/deposit every 30 days. Or even skip the bank entirely and pay the credit card bill directly through the mail like the ol' days.
- korzun 13y agoI'll take FDIC insurance over stupid paranoia any day of the week. Have fun retiring without 401K/IRA.
- reqres 13y agoSurely there are better ways to fix the problem by means other than boycotting financial services. Also, if your sentiments were generalised across the population it wouldn't just be the banks suffering. We'd have a massive credit crunch. Regular, honest people wouldn't be unable to get mortgages or business loans.
- noobermin 13y agoI have to pay self employment tax since I'm a graduate fellow, so I have a larger amount in my bank account than I own. My vote reflects the money I own.
- cryptoz 13y ago$17. My company bank account has more than that, which is what matters. I used to have ~$20k but...boostrapping.
- ryan-c 13y agoWhat is the intended meaning of "bank account" here? Checking account? Checking+savings account? Should investment accounts be included?
- Drexl 13y agoYea it's rather ambiguous. I responded based on checking.
- deleted 13y ago[deleted]
- chrisBob 13y agoI would like to see the same poll in terms of monthly income (or expenses) and not just total amount. I would post it myself, but I need 81 upvotes to this post to get me there.
- TY 13y agoHow about adding the same numbers but with a negative sign? :-)
- lolwutf 13y agoTo all those with $150k+.. what are you thinking?? Having that much liquid seems foolish!
- sukuriant 13y agoThey might be including their money in the stock market / mutual bonds / etc?
- foldor 13y agoMine is liquid at the moment because I will be buying a house this year. I'd rather not lock it in to anything that makes it difficult to retrieve. This includes an RRSP mind you. That's liquid for house buying in Canada.
- stephencanon 13y agoWhen we were renovating our house, we kept about an order of magnitude more liquid than usual. Writing checks for $O(15k) on a weekly basis will cause you to do that.
- ChuckMcM 13y agoWell one of the interesting things could be house buying. A number of people during the dot com meltdown were buying houses and waiting to exercise their options at the last minute because they wanted the price to be as high as possible. Except that when it came time to buy their stock value had plummeted. Forcing them to either sell more than they intended, or abandon the house purchase, or restructure the purchase. People with that experience might sell their assets, hold the money in their account until everything has settled, and then move forward. Also folks who sell stock options often have big tax bills to pay. But rather than slosh that money into and out of something that pays .5% interest they are just leaving it in their account until sending it to the IRS on 4/15. The bottom line is it is that the answers look different from two sides of the bank balance :-) I don't think I have ever left that much money in my account for any length of time, but I do recall the CEO of a company I helped get started put the $1.5M series A check into their account while waiting to transfer it over to the newly established corporate accounts. He joked the bank staff treated him very well after that :-).
- mrtriangle 13y agoIf by bank account you mean front-pocket, I'd guesstimate like $22 and a button.
- kewlchat 13y agobetter then me bro lol
- badmadrad 13y agoFor everyone that voted over $150,000, please invite me over to your house so I can stomp on your couch with my muddy boots. You can always buy another one you rich motherfucker.
- anonygoofy 13y agomaybe they haven't house, so they hold money.
- noobermin 13y agoI tend to be more liberal in my politics, but I don't think people making "too much money" are a problem. That sounds like envy, to be honest. The problem in America represented by this poll aren't the ~40 people who upvoted >$150k but that the sheer majority have <$3000, like me. That is the problem, that sheer majority[1] of us have to live paycheck-to-paycheck and should a catastrophe happen, we'd be bankrupt. [1] http://money.cnn.com/2013/06/24/pf/emergency-savings/index.html?iid=s_mpm http://money.cnn.com/2013/06/24/pf/emergency-savings/index.h...
- pigmonger 13y agoThat's a reference to an episode of Chappelle's Show. Probably more of a joke than ency.
- morgante 13y agoIs this really meant for just bank accounts (ie. checking+savings)? If so, I don't understand how anyone is answering more than $10,000. Nearly all your assets should be invested, with just enough cash to handle immediate expenses.
- _dark_matter_ 13y agoWell that's a recipe for disaster. Emergency funds should be able to hand 3-6 months of expenses, sometimes more.
- josephmc5 13y agoCompletely agree. This is one of those "it isn't important until you need it" things.
- 16bytes 13y agoYour emergency funds don't need to be cash in low interest savings/checking. For example, home-equity line of credit is great for just sitting there most of the time unless you really need it. That frees up capital that you'd otherwise tie up in liquid cash that doesn't do anything.
- morgante 13y agoSure. But there's absolutely no reason your entire emergency fund has to be in cash. Sure, keep the first month or two in cash but anything beyond that could easily be kept in an investment and liquidated when necessary.
- cryptoz 13y agoThere are many immediate expenses that significantly exceed $10k if you're wealthy. Also, "should" is a personal preference / strategy and certainly does not apply to everyone.
- wcchandler 13y agoAgreed. I wonder if percentages would be more appropriate.
- jack-r-abbit 13y agoObviously it various depending on our paycheck cycles and when the larger monthly bills get paid. But I have to keep a little bit extra in reserve because the mortgage on my rental house is due before I get that month's rent from the tenant.
- deleted 13y ago[deleted]
- quitthebiz 13y agoYou missed the follow-up, fun question: What's your Robot Porn Name (SS# plus ATM PIN)?
- personlurking 13y agoUnder $1,000 ('pulling my hair out' frequently)
- noobermin 13y agoCurious, if you don't mind. Are you under $1000 because you have money elsewhere, or is it for more upsetting reasons?
- personlurking 13y agoI'll have to go with B) upsetting reasons I usually just say that I'm frugal, but one has to be when all that comes in, goes out.
- bherms 13y agoChecking? Savings? Today vs. Tomorrow? Today: Checking: ~$2400 Savings: ~$250 (I'm just getting started and paying off major student loans ~$120,000 to go...) Tomorrow: Checking: $5200 Savings: $325
- gmays 13y agoI assume by 'in your bank account' you mean liquid? It really doesn't make sense to have more than the money you use between deposit periods (plus a reasonable cushion) in a checking account. I keep $1,000 in my savings so it's not empty, but I never use the account. I keep 200% of my average spend between deposit periods in checking and move the rest to a 'holding' account that's a money market account (higher interest). If I need to contribute to my IRA, pay real estate taxes, make a large purchase, etc. I pull from here. I'll also use this money to make some investments that I consider liquid (i.e. have Apple now, just sold Tesla). There's more to it, but this system works well for me. I had an issue when I first got married because my wife is a bit more of a...liberal spender than I am. I have it set to always payoff my credit card statement balance every month and was surprised a couple of times how somebody could reasonably spend that much in a short period of time. But then again, this is coming from a guy that drives a Honda Civic, spends a few hundred a month in food, exclusively wears ~$17 jeans, and loves $3.77 Costco lunches that include a slice of pizza, hot dog and a drink (awesome, right?).