Issue #16 | Cons of Savings Account, Understanding Bonds, Interview with Founder
Greetings Worthies, here's the news you need to know this week. Reading time is 2:57 minutes.
How much money do I really need in my checking account?
While checking accounts are convenient, they do not generate any interest. Your goal is to keep just enough money in your checking account to pay bills and cover your immediate living expenses.
The rest of your savings is better invested in an interest-earning option. Many people move their extra money into a savings account where they earn anywhere from 0.01% to 1.55% interest annually, which is very low. This is why we created Worthy Bonds - as with us you will earn a 5% fixed-rate return, which is 83 times higher than the average savings account at your bank! If you'd like to start earning 5% on your cash, bonds can be purchased here starting with as little as $10!
If you want to learn more about bonds keep reading as we devoted this week's edition to the topic!
UNDERSTANDING WORTHY BONDS
What's going on? Did you know that since 2015, the use of fintech tools among digitally active consumers has surged from 16% to 33%?
We at Worthy understand the shift towards transparency, flexibility, and accessibility, and have engineered our product around these needs. So what exactly IS a Worthy bond?
Why is it worthy of your attention? We have worked for the past year to create a way for everyday, "retail" investors to have access to the types of higher returns that were previously reserved for only the wealthy. We did this by creating a simple financial product - a bond - much like other companies and governments do when they need to raise money for themselves. But in our case, we are not using the money from bond sales to fund ourselves, but to fund asset-backed (= secured) loans to growing American businesses.
How do we do this? When you buy any type of bond, you are simply loaning the money you pay for the bond to the bond issuer - and they are obligated to pay it back with interest. (Same thing happens when you deposit money into your bank savings account - the bank loans it out too, but they only share the smallest sliver of interest with you). At Worthy, we take the proceeds from our bond sales and lend these funds out to businesses to buy inventory. The inventory is the collateral behind the loan - which means in the unlikely event the borrower should not be able to pay back the loan, the inventory can be sold to recoup the money lent. As these businesses repay their loans, you get to share in a much larger percentage of the interest the borrowers pay.
Unlike many bond sellers, we don't charge any fees or commissions as we want you to make as much money as possible with Worthy! You make 5% annual interest and business owners across America get the funding they need to stock their shelves! Finally, a way to combine an attractive financial return with a positive social impact. LEARN MORE
What's going on?
A “bond” is a fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debtholders, or creditors, of the issuer.
Why is it worthy of your attention? Understanding the “ins and outs” of how the different bonds work can improve your investment strategies and give you more key insights on financial stability. Bonds are an important diversifier to any portfolio as investors do not want "all of their eggs in one basket" in the stock market.
INTERVIEW WITH FOUNDER
What's going on? Worthy’s Founder & CEO Sally was interviewed by FinTeK News to discuss the innovative Fintech product Worthy created, and offer more insights into the world of alternative finance and investing.
Why is it worthy of your attention? Worthy is on a mission to make alternative investments available to all. The interview unveils Sally's challenges with getting Worthy Bonds on the market. Sally discusses how the product will benefit small and large investors alike, and also shares her predictions on what area of FinTech will grow in the next 5 years. FULL STORY