DMD 002: Todd's Simple Guide to Choosing Where You Need to Bank
Where You Bank Matters Big Time! Here's Why:
Hey there,
Welcome back to Do Money Differently!
In my “unscientific” market research of engaging with thousands of young people aged 18-34 over the years a huge percentage of them have no real reason why they bank where they bank. There’s no real affiliation or tangible value they can pinpoint as to why they are with said bank.
Maybe this is you too.
But where you bank is actually a major deal if you want to start getting in a real groove with managing your money differently and reduce money stress.
I’ll explain below and tell you what to do so you can experience a new level of financial confidence and not follow the herd when it comes to money.
My advice?
Go with a Credit Union or an Online Bank.
First, I am not anti-bank. Yet, here are some facts to know about most big regional or national banks:
Some of the larger traditional banks like JP Morgan Chase, Bank of America and Citigroup make a large portion of their income from investment banking and trading profits.
To participate in these profits as a customer you need to own their stock.
To have more than one named savings account at many of these banks, most require you to pay a monthly fee if you don’t maintain a minimum balance of $300 - $500.
This last bullet point is totally bogus - you should never pay a fee for having multiple savings accounts.
BENEFITS OF A CREDIT UNION YOU LIKELY NEVER KNEW
The profit a credit union makes goes back to members (yes, you are a member/owner) in the form of lower interest rates on loans (ie…car loans, mortgages, personal loans) and higher interest rates on savings and/or checking accounts.
Most, if not all, credit unions have a $0 - $5 minimum balance requirement to provide you with multiple named savings accounts. This is huge, as you don’t need to worry about getting dinged with a monthly fee when you use the money from your named savings accounts.
Nearly all credit unions are part of a shared branch cooperative. Meaning, you can travel to Florida from Ohio, or from Utah to Texas and take cash out from nearly any credit union ATM in another city without a fee, and perform other banking services. Technically, this means that credit unions have more ATMs than any bank in the country.
Young Money University has partnered and continues to partner with many credit unions of all sizes and it’s been nothing short of a great experience! Shout out to Mountain America, Kemba and Alabama Credit Union for the great work you do to help your members do money differently in the communities you serve.
You can view my TikTok vid of less than a minute on this same topic.
SET UP YOUR NAMED SAVINGS ACCOUNTS AND AUTOMATE YOUR MONEY
With credit unions and some online banks like Capital One 360 or Ally Bank you can now create your named savings accounts that line up with what you value and what you need for the next 5 years or less. And then move money automatically each month, from your checking account to these new named accounts. Here’s a few examples to start with:
Clothes/shoes savings account
Car repair or new car savings account
Travel savings account
Business/side hustle start up savings account
Home down payment savings account
When you begin to name your cash and spend your money intentionally, you will feel a sense of control over your money that you have always wanted. And this feels great.
MARKET WATCH
Stocks: Continued their upward trend the day after Trump took office for his second presidential term in Washington. Netflix stock soared as they reported wow numbers on earnings and subscriber growth while consumer products giant, Procter and Gamble, also reported strong sales/earnings.
The S&P 500 (index that tracks the performance of the 500 largest companies listed on stock exchanges in the U.S.) was up 1.7% for the week and 3.5% for the year.
Some pundits think the market is a bit overvalued (as do I) but the key to creating wealth at a young age is to keep automatically investing weekly or monthly into stocks regardless of what the short term narratives may look like.
Speaking of easy recurring investing. Young Money University and Acorns have an exciting partnership that gives anyone a $40 bonus just for opening up their first Acorns investment account as long as you set up at least a $5 weekly or monthly recurring investment (which is a foundation to what I teach). I have an Acorns account and I’m a big fan.
Here’s the link to get started - $40 Acorns Bonus
Crypto: Bitcoin sits around $101,000 and Trump’s administration says they will build out a crypto advisory council that will begin to create some regulation around crypto - which is a good thing. Some expect Bitcoin to move higher in the coming months due to a crypto friendly administration.
I remain positive about Bitcoin for the long haul, and feel everyone should own a little bit as part of their overall investment portfolio. You can do so through a variety of ETF’s like IBIT from Blackrock if you don’t want to hold Bitcoin directly on exchanges like Coinbase, Kraken or Crypto.com.
With crypto, the safest option is always a physical hardware wallet in cold storage, which you completely control (by safeguarding your own private keys).
Many think there may be a Solana and XRP ETF approval in 2025. If this happens, it will add further credibility to blockchain technology and some of the underlying crypto projects that bring real value to the marketplace.
The total market cap of crypto is $3.6 trillion as of this newsletter date. For reference, the total market cap of crypto in January of 2020 was around $200 billion.
What’s synonymous with crypto? Volatility. Expect it.
MY PERSONAL INVESTMENT PORTFOLIO (Stocks & Crypto)
Below, I share my personal investment accounts of stocks and crypto. I’m sharing any sales or buys I make each month with you, and my reasons for those decisions. As I teach all of you, I too automatically invest weekly or monthly into my Roth IRA and SEP-IRA and one of my personal investment accounts.
ROTH IRA (held with T. Rowe Price)
Science & Technology mutual fund (PRSCX)
Growth Stock ETF (TGRW)
Alibaba stock (BABA)
Money Market (cash)
SEP-IRA (held with the Acorns saving and investing app) - this my “401(k)” because I’m self-employed
Vanguard S&P 500 ETF (VOO)
iShares Core S&P Mid-Cap ETF (IJH)
iShares Core S&P Small-Cap ETF (IJR)
iShares Core Total International Stock ETF (IXUS)
iShares Core U.S. Aggregate Bond ETF (AGG)
Personal Investment Account (Acorns, Robinhood & E*Trade)
Moderately aggressive portfolio (mix of stock and bond ETFs)
Individual stocks include: Tesla, Nvidia, Stryker, Adobe, Visa, MARA Holdings, VXX and Money Market (cash)
I sold my IONQ stock. I bought this quantum computing stock at $11.50 per share in November of 2022 and sold the stock for $38.50 per share right before the New Year.
I bought more NVDA stock on 1/27/25 after its stock fell 18% after reports of China AI rival DeepSeek sets to challenge ChatGPT. Feels like a stock on sale to me.
Crypto - Digital Assets (largest to smallest holdings
No new buys or sells this week.
Bitcoin (BTC)
Chainlink (LINK)
Ripple (XRP)
Internet Computer Protocol (ICP)
Immutable (IMX)
The Graph (GRT)
Render (RNDR)
Parsiq (PRQ)
Ondo Finance (ONDO)
Uniswap (UNI)
POPULAR Q&A
Question 1: “Hey Todd, have you made any money mistakes when you were younger?
Answer: Absolutely. If I listed them all this newsletter would go on for days. LOL! One of my earliest money mistakes was when I was a sales rep right out of college making about 30 cold calls a day for a company called Allnet Communications. I sold long distance (yes, back in 1991 it cost money to make a long distance phone call) to small businesses. One business I called on said they were issuing stock in their new sorbents company to the private market and they had an investor presentation that evening.
They invited me to come to the presentation and I did and I wrote a check that night for $1,500 in hopes this company would grow and be listed on the stock exchange. They never did make it. It was similar to buying a lottery ticket, and in hindsight, it was a dumb decision.
Question 2: “I just got a promotion and now making an extra $500/month. What should I do with this money?”
Answer: First, everyone has their own personal situation. If you have any consumer debt, pay that down. If you don’t have any debt, perhaps add more to your weekly or monthly investments so you can max out your annual Roth IRA (which has a maximum annual contribution of $7,000). Or perhaps, add more $ to your named savings account called “New Car” or “House Down Payment” each month if you know you need a car or have your eyes on home ownership.
Over time, you will see that Young Money University and Do Money Differently is all about getting you to change your financial behavior through financial automation, changing your mindset and providing you and thousands of others to embrace a unique approach to investing that aligns with your short, medium and long term goals.
KEY LESSON and ACTION STEP(S)
Assess your current banking relationship
If you have no real reason to stay with your current bank, take a look at a credit union near you. You can open your new checking and named savings accounts and become a member of a credit online in just minutes without going into a branch. Or check out Capital One 360 or Ally Bank as an option to hold your named savings accounts.
Begin to create a few named savings accounts to generate a feeling of control over your money based on what you need and value over the next five years.
Automate $ each month into these new named savings accounts. Start small as you can always increase your auto transfer in seconds in your banking mobile app.
Open an Acorns investment account and get a $40 bonus
I have a personal Acorns account and a SEP-IRA account with Acorns.
I have automatically invested weekly into both accounts for a few years now.
Love their app and overall simple platform plus you can make big $ every week just from referrals.
Over 10 million users who have invested over $15 billion with them and growing. I know some of their exec team and all are super good peeps.
Tell us what you’d like me to cover more on in the DMD newsletter
We will continue to cover much on investing and have podcast style video interviews coming soon on money hacks, entrepreneurship, crypto and much more but would love to hear from you what you’d like to learn more about.
Remember, you have what it takes to do money differently and live a life that you desire!
Let’s Go!
Todd