Is your portfolio balanced across the three worlds of money? On today’s episode of the podcast, we discuss all three worlds of money: banking, insurance, and Wall Street. All are places people save and invest their money in, but what are the pros and cons of each one?
The banking world is something we’re all introduced to, often at a young age, like when you first open a checking and savings account or build credit. This is considered safe money. When is the right time and the wrong time to use a bank? If you put too much money in this asset class, you won’t be able to keep up with inflation. A lot of times banks are charging fees just to keep your money there. Are you keeping too much money in the bank?
Insurance has become more prevalent in financial plans in the past 20 years or so. The insurance world gives people the opportunity to both protect their money and find growth. What you lose out on is liquidity. The right fit depends on the person, especially when it comes to annuities. It’s important to work with a financial advisor who understands your needs and what would best fit your situation.
We’re all looking for growth, which comes from Wall Street. You have to be ready for inflation and therefore growing your assets as much as you can while also as safely as you can. That said, you lose out on safety, so make sure you don’t put everything in the stock market. Since 2008, the market has done great overall, which has caused some people to become overly confident. It’s important to strike the right balance between all three worlds.
Listen to the entire episode or click on the timestamps below to skip ahead to hear more about a particular world of money.
1:01 – What are the three worlds of money?
1:40 – What should you know about the world of banking?
5:29 – What ways can a person misuse the bank?
10:34 – How does the insurance world fit?
12:01 – How can the insurance world be misused?
16:29 – What does Wall Street give us?
18:51 – How do you find a balance?