Trim’s Two-Minute Guide to Handling Your Money

We at Trim think that your money is important, but that that you probably don’t want to worry about it all the time. Do the things below, and you’ll be on a relatively headache-less path to wealth.

  1. Open a Checking Account

Your checking account is your wallet, not your piggy bank. It exists to receive your paycheck and pay off your bills. We recommend Ally Financial Checking. It’s got a great website and a relatively high interest rate.

  1. Open a Savings Account

Your savings account is your short term piggy bank. It should have enough money for you to live off of for six months in case you lose your job. Again, Ally Financial is the way to go. Easy to use, and with a 1% APY, which is pretty good given how low interest rates are right now.

  1. Passively Invest

Forget beating the market. People on Wall Street try to do it, and generally they’re not very good at it. The Wall Street Journal reports that over the last ten years, between 71% and 93% of actively managed mutual funds have performed worse than the indices they compare their performance against.

Instead, make monthly contributions to the Vanguard Total Market Fund, the largest passively managed mutual fund in the world. It tracks the U.S. stock market, and has looked like this over the last ten years.

 

Screen Shot 2016-10-24 at 2.42.28 PM

And that’s mostly it. Of course, managing your money is more complicating that these three points, but if have a checking account, six months of money in your savings account, and regularly contribute to the Vanguard Total Market Fund, you’ll be in better shape than most Americans. Stay tuned for more details on passive investing and saving for retirement.

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