Today I opened 3 different bank accounts. The first was with Apple because they came out with a savings account that pays over 4% interest. It was all over my news feed, so I felt pressured. Then, because I’d started looking and was going down the rabbit hole, I found another account through SoFi bank that also paid over 4% interest and gave you a $250 bonus for signing up. But after I signed up, I started to see things saying that the bonus is only for people who also use direct deposit for their paychecks, which takes a bunch of work to set up, plus your paychecks had to be pretty big to get the full $250, whereas my paychecks would only get me a $50 bonus. So then I was pissed that I got tricked and I signed up for another account that pays over 4.5% interest. That’s $450 per year if you keep $10,000 in the bank. In my case that’s like $45 per year. I think there is a good chance that later this week I will close all those accounts without depositing any money in them.
I guess I did this because it felt like a little money carrot and I wanted a nibble. It’s Monday, the workweek looks long and arduous with little hope for anything but a continuation of the same work week the next week, ad infinitum, and desperation to “do something” sets in. And while I should have known the free $250 was too good to be true, the high-interest accounts make sense; the idea of money making money is pretty appealing. That’s how rich people stay rich and get richer without doing much.
In the 4.5% scenario, if you had $1 million in the bank, you’d be making $45,000 per year, which is basically like having a decent paying job. So, if you had that money while you were working an actual job, it would be like having a bonus job, but one where you don’t have to do any work at all. This is basically how people who inherited tons of money live. And of course there are ways to earn more than 4.5% if you don’t need access to your money for a time.
I see stories sometimes that talk about how much you need to save for retirement. It’s mostly clickbait stuff: Are you saving enough for retirement? Then the scenario is something like “I’m 51, I have $900,000 in my 401k, a six-figure income, my house is paid off and I have no debt. Will I be able to retire by 65?” Or it’s “My husband and I make more than $350,000 per year combined, we have $1.8 million saved, but we’re worried about outliving our money if we retire too early. We are 38.”
Today I went on a walk, my usual route past City Hall and up to Crystal Lake. Near City Hall is a stormwater control rain garden thing, which slows water from storms down in order to filter out pollution. It’s about 4 feet deep with a drain at the top, so when the water rises to about 3 feet, it begins to drain into the sewer system. And while I wasn’t really all that depressed, as I passed by I thought to myself, “I could just lay down in there and not get up again.”
That’s how those kinds of financial stories make me feel. I don’t know why I click them, because they inevitably make me want to fill my pockets with rocks a la Virginia Woolf and walk out into the sea and disappear. Part of it is probably jealousy at not having a six-figure income and $900,000 in the bank, but another part is that in America we are out of control if we think we need that much money to retire. The answer to when you can retire if you have $900,000 in the bank, and your house is paid off, is now—you can retire now. And if you can’t retire now, but want to, then you need to reevaluate the choices that have led you to be the focus of this financial column on Yahoo that is making everyone angry.
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