Stock Market 101: Investment Advice for Beginners

For most that do not invest in stocks, the idea of the stock market seems very risky and scary. For them, the risk appears to outweigh any potential upside. However, this is not the case!

Investment in stocks can seem intimidating, but it doesn’t have to be. This investment advice will help you start improving your investing skills today.

Stock Market 101: Investment Advice for Beginners

You may be wondering if investing is a good idea for you. Of course, it is! Every person needs to invest in order to grow their financial accounts.

Having your money tied up in traditional savings accounts alone will not do it. Not only will it provide it a low rate of return, but it probably will not even keep up with inflation.

Investment Platforms

Before we talk about the stock market in more detail, let’s talk about how you can purchase them. There are three main outlets in managing stock investments- online brokers, investment advisors, and robo-advisors.

While they are all different, one will be perfect for your personal situation and needs.

Online Brokers 

It is no surprise that many people turn to online brokers when looking to invest in the stock market. The most significant upside to online brokers is that you can handle everything entirely online. Also, you can invest in a wide variety of items.

However, online brokers are not always beginner-friendly. While they offer some investment advice, most online brokers are geared towards those with more experience and comfortable in managing their own investment portfolios.

Investment Advisors

Investment advisors are dedicated professionals that can give you personalized investment advice. These advisors work with people one-on-one and can give you direct investment advice based on your goals, timeline, and how much risk you want to take.

After discussing this with a potential investor, the investment advisor will create a diverse portfolio that is appropriate for their needs and wants. The portfolio is filled with a wide range of products.

For most beginners, it can be challenging to find an investment advisor to work with. Many advisors only work with those with an extensive portfolio or significant amount of money (starting around $250,000) available to invest.

Robo-Advisors

Robo-advisors are recent additions to the scene but have quickly become a popular way to invest in the stock market. Offering similar services as investment advisors, they do not require a high investment, making them within reach for all investors.

Just like traditional investment advisors, robo-advisors will evaluate your goals, needs, and tolerance to risk. They will create a personalized portfolio that will be filled with lower-cost products. This helps you save money as the fees will not be as high as other avenues.

Robo-advisors are available to investors, both new and established. No matter your income available for investing, a robo-advisor can create a portfolio for you!

Stocks

Stocks are a popular product to use when investing in the stock market. Usually, stocks highly outperform other investments and outpace inflation.

Many investors make stocks the primary investment in their portfolio. While they tend to diversify for lower risk tolerance, investors keep coming back to stocks for their high return.

So, how much of your portfolio should be stocks? For a conservative portfolio, a common rule is that the percentage of a portfolio that should be stocks is 120 minus your age. For example, if you are 40, 80% of your portfolio should be stocks. Then, when you turn 50, that number lowers to 70%.

Stocks to Invest In 

So what stocks should you invest in? As a new investor, you should focus on categories, not individual stocks. We will go over some of the standard and best stock categories to invest in as a beginning investor.

Value Stocks 

Value stocks trade at lower prices. These are usually companies that are recovering from some difficulty or had faced some legal issues. Because of this, their prices are lower than other stocks.

However, the benefit can be yours once the company recovers. Your investment in value stocks will likely outperform the stock market in general over the long term.

High Dividend Stocks 

High dividend stocks are just what their name suggests, a stock that pays out a higher dividend than the average. Since around half of the return on stocks comes from dividends, it just makes sense to invest in high dividend stocks.

These are also a great way to give a bit of protection to your portfolio. Having high dividend stocks can provide some level of protection during a downturn in the stock market.

Growth Stocks

Growth stocks are from those businesses that are growing faster than their competitors and other companies that are listed on the general stock market. Even though they traditionally do not pay dividends, the return comes from the rising stock price when help on to long-term.

Just a piece of investment advice on growth stocks: these are considered high risk. While the potential is strong for growth, they may also take significant hits when there is a downturn in the market. Just remember that these are a long-term return stock, and you should be OK.

Start Investing in Stocks 

Now that you know a little more about stocks and investing, you may wonder if you should get started. There are some steps you should take beforehand to ensure that you are ready!

First, you need to get a solid financial base. Some basics to follow includes having sufficient and stable income, an emergency fund that covers three to six months of expenses, and a track record of saving. This will help set you up for a solid beginning to your investment portfolio.

Second, you should further educate yourself about the different types of investments and products available in the stock market. Just remember to never invest in something you don’t understand. When purchasing a stock, you are actually investing in a specific business.

When investing in a business, you should educate yourself on that business and its industry as must as you possibly can.

Investment Advice

While all of this may seem overwhelming, there are many advisors and sites ready to help you with any investment advice that you need. Don’t let the fear of the stock market stop you from realizing your financial goals.

Check out our blog for more information on how to guide your investment and enhance your ROI.

Reed Smith appoints former Deutsche Bank Managing Director in London

LONDON, 7 January UK – Reed Smith today announced that Joe Kohler has joined the firm’s Financial Industry Group, marking another significant addition to its banking advisory and derivatives practice.  Kohler joins Reed Smith from Deutsche Bank, where he served as Managing Director, Legal, Corporate & Investment Banking.  In that role, he co-led the bank’s sales and trading legal function globally, with deep transactional experience across the entirety of the fixed income, currencies and commodities businesses.

Reed Smith appoints former Deutsche Bank Managing Director in London

Over the course of his 18-year career at Deutsche Bank, Kohler led the legal work on many of the largest and most important transactions the bank conducted. He managed Deutsche Bank’s legal department’s response to counterparty defaults, downgrades and worked on enforcement and asset recovery efforts during the credit crisis of 2008. He also worked on the building of the first OTC derivative clearing offerings, on the development of the related market infrastructure and contributed to trade association efforts to standardise the related documents. He then helped shape the bank’s response to new regulatory developments such as EMIR, MiFID II, the collateralisation of uncleared derivatives, Brexit and IBOR reform.  Furthermore, he also has extensive experience of merger and acquisition activity in the financial sector, having led on the acquisition and disposal of many businesses and portfolios.

Kohler has led large teams on strategically critical projects within Deutsche Bank and brings to Reed Smith a deep understanding of the inner workings of the legal department within a global investment bank.  Given his sophisticated knowledge of structured finance and products, expertise across industry asset classes, and litigation and regulatory enforcement experience, and in-house familiarity, Kohler is well placed to add to Reed Smith’s bench strength providing strategic advice to banking clients on these transactions.

“Joe’s arrival adds to the bench strength of the firm’s highly regarded banking advisory and derivatives practice,” said Ed Estrada, global chair of Reed Smith’s Financial Industry Group.  “Joe is immensely respected and regarded within Deutsche Bank and throughout the investment bank community, and his reputation for providing steady and sound leadership on complex transaction and litigation matters as in-house counsel is an invaluable asset that our clients will certainly benefit from.  We are excited to have him join our team.” 

Kohler said, “As an in-house counsel, I wanted the law firms my team instructed to add something to secure a better solution than we could deliver on our own – perhaps insight, experience or capability. I was always reassured when we selected Reed Smith, because they always delivered what we had been looking for, and did so efficiently and with a profound understanding of the commercial context.  I am really excited to be joining Reed Smith’s highly impressive team.”

About Reed Smith

Reed Smith is a dynamic international law firm dedicated to helping clients move their businesses forward. Our belief is that by delivering smarter and more creative legal services, we will not only enrich our clients’ experiences with us, but also support them in achieving their business goals.

Our long-standing relationships, international outlook, and collaborative structure make us the go-to partner for the speedy resolution of complex disputes, transactions, and regulatory matters.

For further information, please visit reedsmith.com.

More Than One Basket. Why Every Person Needs Multiple Bank Accounts

Despite growing mistrust in the banking industry since the 2008 financial crash, we remain steadfastly loyal to our personal banks. So loyal that the Competition and Markets Authority (CMA) found that, in 2016, only 3% of UK residents switched banks. While that doesn’t reveal how many people have multiple bank accounts, it may well suggest that we’re not looking at our banking activities strategically. Having a single bank account makes things simple on the face of it. But is it sensible?

With the financial crash, which included the failure of Northern Rock, and the increase in cybercrime, we know that putting all our eggs in one basket is a bad idea. But there are a variety of reasons why it’s sensible to have multiple bank accounts. 

In the UK and across Europe, many bank accounts are free, making opening a new one easy. No matter where you’re located though, having over one bank account could have huge benefits for your finances. 

Want to know why? Keep reading and we’ll break it down. 

Protect Your Money

Spreading the risk is one of the most sensible things you can do with investing and the same goes for storing your hard-earned money. If you have just one bank account, you leave yourself open to serious problems. 

If your financial institution fails, you may lose access to the money you’ve stored with them. While it seems unlikely, the banking industry is changing at a rapid rate and instability can happen, even as stricter regulations are in the works. 

Bank Failure

In the UK, the Financial Services Compensation Scheme (FSCS) protects your money if a British bank fails. However, they will only protect your finances up to £85,000 in each financial institution. 

A financial institution is an entire corporation rather than individual banks. For example, if you have £100,000 in Natwest and the Royal Bank of Scotland (RBS) fails, you’ll only be protected for £85,000 as Natwest is owned by RBS. 

If you have split your £100,000 between two accounts, one with Natwest and one with RBS, you will still only get protection on £85,000. This is one reason you do not only need more than one bank account, but you should spread accounts across different parent financial institutions. 

Cybercrime

Cybercrime is becoming more prevalent around the world, putting banks and your money at risk. In 2017, a major cyber-attack caused havoc with multiple banking systems across the UK. There’s a continued risk of this happening again which means you’re at risk of not being able to access your money when you need it. 

If a cyber-attack affects the operating of your bank, when you have a second account with a separate bank, you’ll still have access to some of your money. 

Going Abroad

Have you ever had your card blocked by your bank when you’re away? Fraud teams prefer to be safe than sorry and you may well find yourself without access to your account at some point. 

By having more than one bank account, you can use your second account if your first is blocked by a fraud team. 

Manage a Budget

The average household debt in the UK is over £15,000 and the figures are worse in the US, where the average individual’s debt is $38,000 (£29,000). One thing is clear, we need to be budgeting more effectively. 

With one bank account, all of your income and outgoings are lumped in together. This makes it difficult to manage money for different outgoings and to save proactively. 

When you have multiple bank accounts, you can use one for day-to-day spending and others for separate purposes. This includes savings, mortgage or rent payments, self-employed tax, and whichever purposes suit your life. 

It’s easy to move money from one bank to another, allowing you to move money into savings the moment you get paid. 

Savings Accounts and ISAs

Savings accounts and ISAs often have far better interest rates than current accounts, allowing you to make money and benefit from tax-free interest. It’s wise to have designated savings accounts that you move money into and don’t use as day-to-day spending money. 

Even saving small amounts has a compound effect as you’ll earn interest on the full balance, including previous interest payments. Keeping this savings money separate from your usual current accounts stops you from seeing it easily and being tempted to spend it. 

Multiple Currencies

It’s increasingly easier to open bank accounts in other currencies. Having a Euro bank account, for instance, means you avoid foreign transaction fees and variable exchange rates. 

It also means you can withdraw money easily in Euro countries from ATMs without facing charges. 

Separating Personal and Business Accounts

If you run a business, even as a sole proprietor, keeping your personal and business finances separate will make your life easier. You’ll get a better picture of how well your business is doing and can keep track of payments and outgoings more easily. 

Some business accounts also come with added benefits such as free business advice or discounted business products. 

Joint Accounts

If you share outgoings with a partner, having a joint account can help you manage your shared responsibilities. If you jointly pay a mortgage or rent, utilities, and subscriptions, you can store this money each month in your joint account and create direct debits to pay out. 

This is a useful way of separating joint expenditure from your personal finances. This can also offer a small amount of financial protection in the event of the death of an unmarried partner. On the death of one joint account holder, the account will automatically belong to the surviving account holder regardless of marital status. 

Stay Safe with Multiple Bank Accounts

There are many benefits of having multiple bank accounts and having only one puts your money at risk. Having more than one account helps protect your money from bank instability and cyber attacks, enabling you to access part of your wealth. 

It’s also helpful for travelling abroad and saving for your future. You can take advantage of better interest rates, separate savings from everyday spending, and see business finances clearly. 

To learn more about the global financial world and keep on top of news, check out our Editor’s Picks

UnionBank’s ‘Tech Up, Pilipinas’ drive resonates at Singapore Fintech Festival

Only Phl banking exhibitor since 2018 draws VIPs

Visitors are drawn to the two-story UnionBank booth that highlighted revolutionary and socially relevant digital innovations.
Visitors are drawn to the two-story UnionBank booth that highlighted revolutionary and socially relevant digital innovations.

Still the lone Philippine banking institution participating at the annual Singapore Fintech Festival (SFF) held at the Singapore Expo last week, Union Bank of the Philippines (UnionBank) again established a powerful presence on the world stage worthy of the visit of well-known dignitaries, the prime minister of Singapore included.   

Replicating its success on its global debut at the SFF last year, UnionBank – thrice honored by Asiamoney as the Philippines’ Best Digital Bank since 2017 – bannered its suite of emerging technologies, along with those of its fintech and thrift subsidiaries UBX and CitySavings, consistent with its relentless drive to extend more affordable and accessible financial services to all Filipinos here and abroad.

Singapore Prime Minister Lee Hsien Loong chats with UnionBank chairman Justo Ortiz as he made a stop at the UnionBank exhibition – the first booth he visited at the SFF. With them are UnionBank president and CEO Edwin Bautista, UBX president and CEO John Januszczak, Platform Development head Ramon Duarte, Human Resource head Michelle Rubio, Transaction Banking head John Cary Ong and Fintech Business Group head Arvie de Vera.
Singapore Prime Minister Lee Hsien Loong chats with UnionBank chairman Justo Ortiz as he made a stop at the UnionBank exhibition – the first booth he visited at the SFF. With them are UnionBank president and CEO Edwin Bautista, UBX president and CEO John Januszczak, Platform Development head Ramon Duarte, Human Resource head Michelle Rubio, Transaction Banking head John Cary Ong and Fintech Business Group head Arvie de Vera.

No less than the Prime Minister of Singapore, Lee Hsien Loong, together with Monetary Authority of Singapore (MAS) managing director Ravi Menon, graced the booth frequented by curious visitors intently asking about the bank’s cutting-edge digital products and platforms and how it benefits the common man. UnionBank has partnerships with OCBC Bank Singapore to pioneer remittance services from the city-state to the Philippines through blockchain-based platforms, and with the MAS for its SME marketplace Business Sans Borders (BSB) that is seen to empower local SMEs to explore and expand internationally.

UnionBank president and CEO Edwin Bautista and chairman Justo Ortiz explained how, through the bank’s comprehensive strategy called “Tech Up, Pilipinas,” it is utilizing technology to promote financial inclusion for sustainable prosperity, particularly of the unbanked and the underserved, who compose around half of the Philippines’ 108 million population. Financial inclusion is a vital component for the realization of the Philippines’ vision to become a G20 country by 2050.

Other dignitaries who visited the UnionBank booth were Philippine Ambassador to Singapore Joseph Del Mar Yap and Bangko Sentral ng Pilipinas (BSP) Govenor Benjamin Diokno, who looked visibly proud of the Filipino ingenuity as he was toured inside the booth by Bautista. The central bank chief thanked UnionBank for raising the Philippine flag at what is dubbed as the biggest fintech summit gathering global innovation and business leaders. Bautista, in turn, said UnionBank’s remarkable showing at the SFF is a testament to its commitment to remain agile and a frontrunner in this digital revolution.

Don’t Gamble With Your Future: Why Everyone Needs a Financial Advisor

50% of Americans don’t have anything saved for their retirement. Another 34% have nothing in their savings account at all. Part of this problem is the inability to understand personal finance and planning. A financial advisor is trained and experienced in the art of how to save and use your money.

Personal financial planners help everyone from recent graduates to those trying to save for their retirement. While they aren’t free, the money they can potentially save you, in the long run, is worth their advice.

Keep reading to learn more about planning your future and why you need a financial advisor.

Ignoring Your Finances Will Not Make Them Better

Besides the obvious fact that ignoring your finances will not make them better, it will also negatively affect your well-being. One study found that how you perceive items like your current financial situation as well as how well you’ve planned for the future, affects your well-being. These perceptions about your financial state impact everything from your job satisfaction to your physical health.

Needless to say, then, if your finances aren’t in order, the idea of going through them is probably scary. And that’s especially true if you know you’re in a lot of debt, but you’re not sure how much (or how to get out of it). 

The solution to that problem is not to ignore the issue but to tackle it before things get even worse. If you don’t know where to start, that’s where a financial advisor comes in.

More Money

Tackling your money problems with a financial advisor leads us to the next reason you should consult a financial advisor. That is, a financial adviser might actually be able to put more money in your pocket.

Financial advisors help you accomplish this in three ways:

  • They help you manage your income more effectively. 
  • They help increase your cash flow through tax planning, expenditure monitoring, and careful budgeting.
  • They increase your capital by increasing cash flow for potential investments

Overcoming Personal Biases

The benefit of managing your own money is how much you save. But the main disadvantage of having sole insight into your finances is that you have personal biases that are difficult to overcome.

Your biases impact your decisions, and that includes important financial ones. For example, people who lost money in the tech bubble in 2000 might be reluctant to reinvest in this sector, even if the potential for return is great. A financial planner can help you overcome those personal barriers.

At the same time, a financial advisor can help guide you through difficult financial situations wherein your emotions can get the best of you. If you’ve invested in the stock market, for example, a steep decline in the market may lead you to panic where a financial planner knows when to stay calm. With their experience, you can make logical and reasonable decisions with your money even throughout tough financial times. 

A Trustworthy Relationship

You can – and should – trust your financial advisor. These are professionals who have taken a fiduciary oath. That is, they are legally bound to putting your needs before their own.

Some financial advisors are also C.F.P. board certified. This certification indicates that your financial advisor follows a certain level of competency standards set by the Certified Financial Planner Board.

A Financial Planner Can Help You Achieve Long Term and Short Term Goals

Financial planners do exactly what their name indicates: they help you plan your finances for both the long and short term. If you, like most people, struggle to set, prioritize and reach your financial goals, a financial planner will show you how to reach your long and short term goals.

In the long term, a financial advisor can assist with paying off student loans, maximizing your 401k, or becoming consumer debt-free. In the short term, a financial planner helps with building emergency funds, paying for a wedding, or buying your first property.  

Plus, you’ll learn from your financial advisor and the plan they help you build. When you help create a financial plan, you follow it closely, and you reap the results, you’re perspective on controlling your finances is likely to change.

Professional Advice and Knowledge

Let’s be honest, you might know how to set up your online bank, you might even have tried your hand at playing the stock market, but you’re not an educated, certified, or experienced financial professional. A financial advisor has the credentials to handle all of the nuances of your finances and to find things that you’re likely to overlook.

A financial advisor will take an unbiased and holistic look at your finances and offer advice on where you can improve your savings and cash flow. But they can also help you with more complicated financial items like taxation, estate planning, and how to handle your debt.

Keep in mind, too, those finances are dynamic. They’re impacted by volatile markets and economic cotexts that grow and change. Your financial advisor helps you plan for those transitions and changes – and for the ones in your own life (i.e. retirement, career changes, etc.).

More Advice Than a Financial Advisor

Visiting a financial advisor is a good idea at all stages of life, regardless of your financial situation. Whether you’re ready to start saving for retirement, you’ve just graduated from college, or you’re preparing to buy your first property, a financial advisor can help you achieve those goals. 

While the cost of a financial advisor is a hindrance for some people, a financial advisor can actually help put more money in your pocket. They can show you how to better use your income, ultimately increasing your cash flow and your capital. 

But for even more advice than a financial advisor can give you, check out our financial advice blog. It’s full of all the financial information one could need.

NDB Board of Directors meets in Shanghai, approves three projects with loans aggregating to USD 937 million

On December 2, 2019, the 22nd Meeting of the Board of Directors of the New Development Bank (NDB) was held in Shanghai, China.

The Board approved three projects with loans aggregating to approximately USD 937 million, bringing the NDB’s portfolio to 49 projects with loans aggregating to USD 13.7 billion.

Hubei Huangshi Modern Tram Project

The NDB will provide a loan of RMB 2.76 billion (approx. USD 400 million) to the People’s Republic of China for Huangshi Modern Tram Project. It will address urban transport connectivity problems in Huangshi, a municipality in the southeastern part of Hubei Province, through the construction of a modern tram network with a total length of 27.33 km. The components of the Project include: i) laying of tracks, construction of stations and installation of associated facilities for the tram network; ii) procurement of rolling stock; and (iii) consultancy support for commissioning, preparation of operations and maintenance plan, capacity building and project management.

Manipur Water Supply Project

The NDB will provide a loan of USD 312 million to the Republic of India for Manipur Water Supply Project. It will address serious challenges in clean drinking water supply in Manipur, a small mountainous state in the northeastern region of India, through construction and upgrade of drinking water supply infrastructure. The components of the Project include construction and upgrade of drinking water supply systems in: i) Imphal Planning Area, the capital city of Manipur; ii) additional 25 towns; and iii) 1,731 rural habitations.

Indore Metro Rail Project

The NDB will provide a loan of USD 225 million to the Republic of India for Indore Metro Rail Project. The Project is to implement a metro line of approximately 31 km in the city of Indore. The Project will provide mass rapid transit capacity for the city’s major mobility corridors, thereby contributing to local economic development and an improved urban environment by reducing traffic congestion and pollution.

The Board also approved technical assistance totaling to USD 0.7 million for two projects from India and Russia.

Mizoram Tuirini Small Hydro Project

The NDB will provide technical assistance of USD 300,000 to the Republic of India for Mizoram Tuirini Small Hydro Project. The NDB’s technical assistance will provide consulting services aimed at preparing the Mizoram Tuirini Small Hydro Project. The project envisages construction of a small hydropower plant with an installed capacity of 24 MW in the state of Mizoram, to increase installed power generation capacity of Mizoram.

Krasnodar Cable Car Project

The Bank will provide technical assistance of USD 400,000 to the Russian Federation for Krasnodar Cable Car Project. The NDB’s technical assistance will provide consulting services aimed at preparing the Krasnodar Cable Car Project up to the stage when it can be considered by external financiers to seek approval for its financing. The project envisages the construction of a cable car network to be used as an alternative public transportation modality in Krasnodar city, Russia to relieve traffic congestion.

It is the first time that the NDB Board of Directors approved the provision of technical assistance through the Bank’s Project Preparation Fund (PPF), a multi-donor fund open to contributions by all the Bank’s members. The PPF’s objective is to support preparation of bankable projects to facilitate borrowing member countries to raise funds for such projects from the NDB or other multilateral development banks.

During the Meeting, an update on the NDB project pipeline and status of approved projects was provided to the Board. The Board also discussed matters pertaining to equity investments, funding programme, treasury related matters, membership expansion, review of NDB’s General Strategy: 2017-2021 and development impact of the Bank’s operations.

On December 2, 2019, the 13th Meeting of the Audit, Risk and Compliance Committee (ARC) of the New Development Bank was held in Shanghai. The ARC reviewed Quarterly Audited Financial Statements for the New Development Bank and the Project Preparation Fund of the NDB for the period ended September 30, 2019. The ARC also discussed matters pertaining to risk, internal audit and compliance.

The 8th Meeting of the Budget, Human Resources and Compensation Committee (BHRC) of the New Development Bank was held on December 2, 2019.  The Committee considered the Budget Utilisation Report for CY2019 and the Proposed budget for CY2020 as well as the three Year Budget for 2020-2022. The Committee also discussed matter pertaining to recruitment and diversity.

Background Information

The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments. According to the NDB’s General Strategy, sustainable infrastructure development is at the core of the Bank’s operational strategy for 2017-2021. The NDB received AA+ long-term issuer credit ratings from S&P and Fitch and AAA foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR).

How Many Bank Accounts Should I Have? (At Least Three)

In the past, people had a checking account and a single savings account. But those were the days when you paid by check and had to go into the branch to do any banking.

Times have changed! We can now send and receive money with a click of a button on your smartphones. So why are we still stuck in the same account habits? 

If you’ve asked yourself, “how many bank accounts should I have?” read on. We’ve got all the answers. 

How Many Bank Accounts Should I Have?

The average American has between $6000-$9000 in their checking accounts. But if you are one of those people, your money isn’t working as hard for you as it could be.  

The great thing about multiple bank accounts is that you can separate your money for different purposes.

You can keep your money that is reserved for a vacation or emergency car and home repairs separate from your account that pays your monthly bills.
When your money is altogether in one lump sum, it is easier to spend money on things it wasn’t intended for.

Keep in mind that having multiple accounts is only beneficial if you aren’t paying a lot in fees and if the account doesn’t have minimum balance requirements. 
Here are some of the best ways you can separate your money into various accounts. 

Accounts for Saving

A savings account has many useful benefits. For one thing, these accounts tend to offer you higher interest rates.

Sometimes, these accounts place limits on how often you can withdraw from them. This might help you think twice about taking money out of your savings.
A lot of people have two different bank accounts: one savings and one checking.

But, two or more savings accounts are very useful for people who live paycheck to paycheck. Two or more savings accounts is a digital version of the jar saving system.

But instead of separating your savings into a jar labelled, car, school, and vacation, you have multiple accounts.
Here are some of the saving accounts you might have. 

Emergency Fund

An emergency fund is a separate saving account that you use to save for unexpected costs.

For example, you could stash some funds in this account to save for job loss, unexpected car repairs and so on. Experts recommend 3-6 months of income be saved in this account. 

Treat this account like a fire extinguisher in a glass case. You only break the glass and take out your money in a true emergency.

To grow this account, set an automatic transfer from your checking account on payday. It’s fine if you only deposit a little bit into this account each time you get paid. Over time, this fund will grow.

Short-Term Savings

A separate savings account can be set-up for your short term saving goals such as money for Christmas presents, a holiday or specific expenses like new tires for your car.

The goal of this account is to keep your money safe from accidental spending. You might have one for all your short-term saving goals, or you may prefer to have one for each goal.

The great thing about online banking is that you can name your accounts whatever you want. So you can make it clear what the purpose of each account is. Try to put a set amount into this account each pay period.

One way to help you stay on track is to figure out the total amount you need and when you need it by. Then divide that number by how many paychecks you’ll get until the goal date. This helps you figure out exactly how much money you need to set aside each pay to reach your goal on time.

Like the emergency fund, you do not use this money for bills, going out to eat or other superfluous expenses.

Long-Term Savings

You should also have an account for your long-term savings. You can save for things such as retirement or post-secondary education.
A regular savings account might not be the best place to grow your money.

Learn about investment management to help your money the most.

How Many Checking Accounts Should I have?

Now let’s talk about checking accounts. These accounts allow unlimited transactions such as withdrawals and purchases.

You may opt to have one checking account where you do all your spending. This means your paycheck gets deposited into this account. You also pay your bills from this account and buy groceries, gas for your car and go out to dinner from this account.

You can see how this may be problematic. The last thing you want is to spend money only to realize that now you don’t have enough for your rent or mortgage.
One of the best ways to avoid this is by having two checking accounts.

One account should be for your incoming funds such as paychecks. You should keep the funds you need for all your monthly bills in here.

Then, move the remainder of your money to a separate checking account. This is the account you can use for day-to-day spending. By doing this, you avoid spending money meant for your bills.

Final Words

There you have it. A complete guide to help you answer the question: “how many bank accounts should I have?”

Keep in mind that you may need to adjust this guide to suit your specific financial situation. You might find you need fewer accounts than we’ve suggested.

As long as you have a system that lets you divide your money into manageable and purposeful ways, that’s all that matters.

At CFI.co, we report on business, economics and finance to give you the information you need. Learn more about CFI here.

The Top 7 Best Private Banks Around the World

Exclusivity comes with a winnowing set of risk and a growing set of rewards. It costs money to reach for higher financial status, but obtaining such comes with a bevvy of perks.

It gets harder to manage everything the higher up you go, which is why specialized services come into being. Among the most broadly useful special services for the wealthy is the private bank. A place to house your wealth where it does work instead of collecting dust.

These banks offer more to their clients than other banking organizations. They offer fine-tuned control and added value to the banking experience, which explains why the largest private financial organization takes care of over 2 trillion USD

But which bank does one chose for their own needs? A lot of factors go into making such a choice but this list will provide criteria and options. 

Private Bank Offerings

The majority of what exclusive banks offer is hands-on experience and attention. Instead of dealing with a banker that deals with dozens, if not hundreds, of accounts, each getting a bit of nodding and hand waving when customers ask about their interest rates or money, a private bank offers professionalism.

Wealth Management

The growth and management of wealth ranks among the best private banking services. 

The overlap between wealth management services and private banking is so large that it’s more worth mentioning how they are different. The largest benefit of a bank over a management service is accessibility.

Finances in a bank are more available in a moment without taking time to untie or vest before moving. Not all funds deposited stay completely accessible, but more so than with a management service. 

Dedicated Personnel

Instead of having one banker with quotas and customers, you gain access to a dedicated person looking after you. This person may even be a team of people, depending. Their job is to work with you and your wealth to increase your bottom line and keep you aware of opportunities for growth.

You save time through individual attention. No going through a file each time you call to remember who you are. They know you and your needs on a personal level.

Dedicated Attention

The attention you receive from a personal representative bleed over into personal assistant territory. They anticipate your needs and offer additional help in planning and creating.

Network of Specialists

Your personal banker and banking team also bring you the benefit of other specialists. At some point, you will need to encounter and deal with tax attorneys, trust managers, and estate advisors. 

your personal banker can offer referrals for each of these that they have personal experience working with. This saves you the time to vet and research for these people.

Perks in Pricing

Offerings, in terms of services, from a private bank contain everything you would see at a lower bank but with incentives woven throughout.

You can expect to see discounts and freebies on some services. It’s quite common to be offered free personalized checks or a safe-deposit box. While it’s not everything, can save upwards of $300 annually on a box.

Of course, most private banks have some fees for their services but it’s nice to see the value additions they supply.

Private Bank Profiles

Now that you have an idea of what types of services you’ll find in a private bank, you can evaluate the following. Each of these excels in their service, security, and returns tho their clients. 

1. DBS Private Banking

This Singapore-based institution offers top-class digital transformation. They have trademarked the term iWealth to show their dedication to digital movements.

Their personnel are well versed in tech and connected to Asian and pan-Asian markets that seek to expand influence through the region. They’ve shown impressive growth in the last few years as well, jumping over 31% in assets in 2018.

2. J. Safra Sarasin

For those looking for a social-minded banking experience, Sarasin leads in programs bolstering societal goals. 

The bank has been in operation since 1841 as a family-owned business. They have spent the better part of three decades building a reputation for sustainable technology. 

They’ve grown while doing so, 23% in 2017 alone. They show that responsibility and social awareness can be profitable endeavours.

3. U.S. Trust

This top private bank offers a somewhat different set of offerings than others. Rather than focus on business owners and hairs, they work with executives and heads of industry.

The bank itself is part of a structure, as such, it is more branding than individual institutions. They work on stock options and retirement benefits for industry employees, which gives them substantial assets. Ideally, they work most often with C-Suite executives. 

4. UBS

The top holding private bank is the world’s largest financier. It gained this honour after smart mergers between its U.S. management and its international operations. together they aim to provide the best and most complete investment and client services. 

5. BBVA

Most private bank accounts start at $1 million in holdings. A few offer accounts for less, especially to financial movers, those with a definite possibility of increasing their portfolio rapidly.

BBVA works with a floor of $340,000. 

Currently, it is involved with large housing markets in Spain and holds a presence in Latin American markets. These growing sectors provide new investment opportunities for clients. 

6. Citi Private Bank

On the other hand, if you are looking to work with much more than the minimum, Citi Private is looking for that demographic. The bank caters to those with $25 million or more in assets.

They operate with a global strategic view, considering their high-end clients to be global citizens.

They work with multimillion-dollar investments and huge, intricate hedge funds. Their growth of 18% in 2017 shows they know who to influence and call shots.

7. Pictect

For those looking for something a bit more local, Pictect caters to the Western European market. An old-line Swiss bank in operation since 1805 with a foothold in Asia. 

They work it old school, using investment banking and cross-selling of credit to bolster dividends. Pictect offers a small, cosy feel with a lot of clout in the world.

Finance a Future

Few people get to experience the thrill of shopping for a private bank. It’s not everyone that has the assets to qualify for joining one of these venerable institutions. 

For further information on the banking industry and its impacts, read more here