The key to Millennial wealth is learning from successful people. That’s why Philip Michael sits down every week to answer your questions. You slid into the DMs and asked about high yield savings accounts, credit cards and the best stocks to buy right now. For the full responses, check out the video.
Q. Do you have any recommendations for high yield savings accounts?
A. Interest rates are at a historic low or close to a historic low. But who knows if that’s really the case. Over in Europe, there are negative interest rates, which means if you have your money in the bank over there, you have to pay to store it there. So, bank savings accounts are not the best place to store your money if you’re hoping to get a return on it.
One of the ways my uncle made his money is he went from Denmark to Turkey when they were paying really high interest rates. He ended up doing many developments that took off, and he leveraged that into the real estate development game. With savings accounts, you can’t do that anymore. However, you can get something similar by putting your money into the stock market.
Q. Do I really need to get a credit card?
A. I never really was a fan of credit cards. But you do need one to build a history of credit. This helps you graduate into owning property. They want to see that you know how to manage money, and you don’t go overboard. But it’s very tricky because they try to throw all sorts of credit cards to entice you to spend because the interest rates are so high. Their whole business model is predicated on profiting off of people who aren’t savvy with money. So yes, you should get a credit card to establish your credit history. Make sure you put things in your favor: Set up automatic payments and make sure you don’t go too far into your limits.
Q. What stocks do you think are a buy right now?
A. I’m not going to tell you which stocks to buy … Over the past 40 years, the stock market has compound about 9-10%, every single year on average. Before you know it, it compounds to something crazy called compound interest … Stick to the basics; basic index funds will perform day in and day out. I typically say outside of index funds, invest in companies that you know. What do you use for information? Google. What do you use to watch content? Netflix. They call them the FAANG stocks: Facebook, Amazon, Apple, Netflix and Google.
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