According to the email, my money will now earn .95%APY. When I first joined E*Trade the rate was about 4.5%. Well before this recession and prior to the collapse of the housing market E*Trade offered as much as 5.05%APY.
Now mind you, any money that is earned for doing zero work is good money, so I'm not complaining. However as a business owner, I make much with the return on investing in my company than putting it in the hands of others. Problem is, I have to do all the work.
The question is whether to continue getting a sucker rate with E*Trade and earn the passive interest or to go hard with my business to make the aggressive R.O.I.?
On the one hand, E*Trade says their rate is 5 times (5x) the national average, but there's a big difference between .95%APY and 5.05%APY. My account with ING Direct, still earns 1.5%APY, but that too is down from the original 3.5%APY I started with. To make things worst, my credit union only offers .25%APY on savings accounts and 1%APY on money market accounts. On the other hand, my business has a quarterly return of roughly 30%. But, I gotta constantly reinvest and do the work.
Never mind the fact that I'm not working with a lot of money, it's the principal of the matter. Should I just be content to earn a little while they use my money to make a lot or should I use my money to invest in me with the potential to earn more? How are you investing, passively or aggressively?
Is it better to earn passive interest or seek aggressive returns on investments? How does one differentiate earnings on saving from interest earned from investing? Could someone please help me figure this out?
In the meantime, I'm gonna continue to do both. I'm gonna put aside some in the "max-rate" (HA) savings accounts at E&Trade and ING, but invest more time and money in my ventures to truly maximize my returns.
I would suggest you do the same.
Here's a video that helps put this into perspective.
-whatdabusinessis.com
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