I remember back in the 80s when you could actually MAKE a decent interest rate on your savings account. Not that I had any money I could put into savings then. I was poorer than a church mouse at the time!
That said, it almost makes me miss the good old days.
Now that we are in a position to save some money, I’ve been pegging a savings account at $500 per month. And while I absolutely LOVE Commerce Bank, their interest rates are laughably low.
I figured “at least I’m saving money, even if it isn’t earning me any interest” until I saw THIS tip on Penny Hoarder today.
Try Nearly Quintupling Your Savings
I clicked on the link and read through the details. There are no balance minimums or monthly fees. You are limited to six withdrawals in a month (but if you are saving money, you aren’t withdrawing money, you are depositing it, and there is no limit to that.
An online Goldman Sachs savings account that pays you nearly five times the going rate? Yes, I’ll take it!
I decided I wanted to deposit $500 and then deposit $500 each month thereafter.
Here is what their online interest calculator showed me…
That’s a total “income” of more than a month worth of savings!
The Five-Year Plan
I really should have titled this Financial Tip #2 AND #3. But then again, this is just an idea that I haven’t acted on yet, so here is the second half of my idea.
At the end of five years, I will have nearly $31,000 saved. I’m considering buying one of those tiny houses (check out some of them here) for around $35k, installing it on my property, and then renting it out as an Air B’nB.
I hope that, in five years, I will have made significant progress in:
- Landscaping my yard into a blooming oasis
- Finished the renovations on The Cottage and have it available as an Air B’nB
- Have built my Air B’nB online reputation and ratings to earn a decent income
All of these will combine into a nice little landing pad for Air B’nB Number Two.
Say it takes an extra $5k in prep work, bringing it to a total of $40k. At a rate of $80 per night (and I think I could charge more), I would have my initial investment repaid within 500 nights of rental. Conservatively? Two, maybe 2 1/2 years. And if things rent out at a decent 50% occupancy rate, I would be looking at a monthly income of $1200 (possibly more).
But first, let’s get that $30k saved. Right?!
Update on 5/21
I’ve had a little difficulty opening the account. I think it will take a call to their customer service department on Monday BUT I also checked my various savings accounts at Commerce and found out that the savings accounts are only earning .02% interest…compared to 1.05% at Goldman Sachs. Holy cow, that is a HUGE difference!
You know I’ll be calling their customer service line first thing on Monday to get this all worked out and start earning some of that 1.05% interest rate!