Here’s a story that has stuck with me for over 30 years. When I was still in college, my best friend, who was majoring in Finance, once asked me what Annual Percentage Yield (APY) I was getting on my savings account with the local bank. “About four percent,” I confidently told him. There was just one problem. I had absolutely no idea what APY I was earning. At some point, someone had told me it was around 4%, and I assumed it stayed there forever. Because that's how banks wor

Keeping your money in the bank is safe. The bank won’t lose your money, so it will always be there! While the bank technically won't lose your money, the old wisdom is dead wrong. Let me explain why a standard savings account loses money to inflation every single year. In my previous post, I talked about how inflation drains your financial bucket roughly 3% per year. That number may seem trivial until you actually see how it affects your finances. If you haven’t done so alrea