The Three Worlds of Money

Today’s Prep:

Do you know the three worlds of money? Where does the bulk of your money live? Is your money appropriately balanced across all three worlds? We’ll break it all down on this episode.

(Click the featured times below to jump forward in the episode)

Equipping Points:

When it comes down to it, there are three worlds you can put your money in. We’ll be going over all three: the world of banking, the world of insurance, and the world of Wall Street. Which one is better? Why are they all important?

Early on, when you have your first job, you typically open a bank account and save part of your paycheck there. Banking is good for liquidity. The problem is, the bank doesn’t have to pay you anything. People keep a lot of money in the bank because it’s liquid and therefore feels safe. But what other accounts can be considered liquid? Should you keep your money in a place where you can get a better return?

Outside of car insurance and health insurance, the insurance world brings life insurance and annuities. What opportunities can these products provide? If you’re over 50, you especially need to look into how you can put money into this world. Finding the way it fits into your plan will give you some growth plus protection.

Investments, like stocks, bonds, and mutual funds, live in the Wall Street world. The values will change every day, and you will always pay a fee. Some fees will be disclosed and some undisclosed. You have growth potential and liquidity, but you don’t have safety in this world.

You need liquidity, growth, and safety throughout your financial plan, which is why you need your money in all three worlds. Does your plan span the worlds of banking, insurance, and Wall Street?

Listen to the entire episode or click on the timestamps below to skip ahead to a particular money world.

[1:05] – What are the three worlds of money?

[2:14] – The banking world offers liquidity.

[5:03] – The insurance world offers life insurance and annuities.

[8:40] – The Wall Street world holds investments.

 

Today’s Takeaway:

Liquidity, growth, and safety–you can only get two of those three, no matter which world you’re in. You need all three, which is why you need products in all three of the worlds.

-Eric Peterson

Related Resources:

What Is Your Retirement Mindset?

Is This Retirement Fact or Fiction?

Heard It Through The Grapevine?

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

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