Since the rise of the internet, brokerages have employed new tactics to get customers to broker trades consistently. One of these tactics is the rise of the “commission free” platforms. Confetti animations and gamified platforms have made it easier than ever for clients to broker trades using complex financial instruments that they reasonably should not have access to. The firms using this model very rarely disclose the risks of using these financial tools as they know that the more trades the client makes, the more money they will make off of either commissions or [payment for order flow](![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)). 

### Options are not Investment Tools

Options trading has become a popular term in recent years, with more young people associating options trading with “investing.” In reality, they are using financial instruments that are primarily designed to be a way of managing liquidity risks by major financial institutions. Options are risk management tools, not investment tools. Options have a unique way of making people think that they are generating income when placing a put or call option. This however is false. On a risk-adjusted basis, options traders do substantially worse over long periods of time than the buy and hold investor. 

### Day Trading is Gambling

Online influencers in recent years have notably used day trading as a way to sell courses to a young audience. Day trading by its nature involves the short term buying and selling of securities in order to capture a profit off of short term price fluctuations. The problem? Day trading is akin to gambling to the retail investor. They are trying to arbitrage a profit off of a guess on where a stock price is going. After the [hidden fees](https://www.forbes.com/sites/simonmoore/2019/10/01/the-hidden-costs-of-commission-free-trading/) that the client pays to the broker, they are highly unlikely to consistently make a good return on their capital. Day trading is a [zero sum game](https://www.investopedia.com/terms/z/zero-sumgame.asp). In order for you to win, someone else has to lose. It is not a sustainable way for retail investors to build wealth. Even the best hedge funds in the world cannot consistently beat the market over decades.

### What is Investing?

Investing at its core is putting your money into something (whether a business, real estate, index funds) with the expectation that it will produce returns for you over time. The stock market, is a giant distraction from the business of investing. The stock market reports the valuation of what millions of people are predicting the future will hold (which is impossible to predict). Responsible investing means diversifying your portfolio to avoid [idiosyncratic risk](https://www.investopedia.com/terms/i/idiosyncraticrisk.asp) and having reasonable expectations. For most people, investing means making diligent contributions to a well thought out portfolio over the course of a lifetime. Brokerages have purposefully employed tactics to make it easier for people to gamble with their money and use tools that are not to their benefit without the proper disclosure of what they are getting themselves into. 

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)


Brokerages have gamified investing at the expense of their clients.

The Predatory Gamification of Investing

You should have opened a high yield savings account (HYSA) yesterday. Here's why.

As of August '24, the average bank savings account offers 0.46% ([FDIC](https://www.fdic.gov/national-rates-and-rate-caps/monthly-update-august-2024)) while USD inflation stands at 2.9%, slowly recovering from the recent 9.1% high in June '22 ([YCharts](https://ycharts.com/indicators/us_inflation_rate)). Even with these inflation levels and 2-year treasury bills paying 3.99% on an inverted yield curve ([YCharts](https://ycharts.com/indicators/10_2_year_treasury_yield_spread)), many large banks are not passing these higher rates on to their common account holders.

### The Big Bank Problem

>"The truth is, Big Banks don't feel the need to compete."

Bank of America and Chase Bank offer just 0.01% yield on their consumer savings accounts with numerous stipulations on withdrawals, minimum deposits, and even fees. Many online banks, however, are offering upwards of 5% APY on a HYSA. So why is it that many big banks don't offer High Yield Savings Accounts?

Some argue that big bank operations are too expensive compared to online banks, which can provide services to customers without brick-and-mortar locations or expensive sponsorships like NFL stadiums. It is true the big banks have higher operating expenses and their physical branch networks are becoming less efficient than in previous decades. Through July '24, 539 branches across the US had closed ([Daily Mail](https://www.dailymail.co.uk/yourmoney/article-13621197/bank-branch-closures-wells-fargo-chase-bank.html)). And now through August '24, 277 branches have closed in the state of California alone - the most closures since 2020 ([FrankNez](https://franknez.com/more-massive-california-bank-branches-are-now-closing-for-2024/)) with the pandemic event.

>Efficiency Ratio = Noninterest Expense ÷ Total Net Revenue

>Long Term Debt Ratio = Long Term Debt ÷ Total Assets

In their 2023 annual report, Bank of America reported a 66.79% efficiency ratio and a long-term debt ratio of 9.50% ([Bank Of America](https://d1io3yog0oux5.cloudfront.net/_56c90f1f1d2a491bf6829a320ac7580a/bankofamerica/db/867/10038/annual_report/BAC+2023+Annual+Report.pdf)). Ally Bank, one of the most popular online banks, reported a 2023 efficiency ratio of 62.86% and a long-term debt ratio of 40.99% ([Ally Bank](https://www.ally.com/content/dam/pdf/investor-relations/2023-10k.pdf)) - a much riskier position than BOA. Based on this, we can say that the online banks spend less to make their revenue likely in relation to their operating in riskier environments.

However, these factors aren't the primary reason Chase and Bank of America don't offer competitive HYSAs. The truth is, big banks don't feel the need to compete.

![investant-money-roll-lincoln-face-wrapped.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1724455892/investant_money_roll_lincoln_face_wrapped_a795b4102c.jpg)

### Lack of Competition

JPMorgan Chase, Bank of America, and Wells Fargo alone hold 41.8% of the US market share ([FDIC Data via Wallet Hub](https://wallethub.com/edu/bank-market-share-by-deposits/25587)). The larger banks have earned customer trust and built their enormous market shares through decades of consistency and convenient banking practices for both consumers and enterprises. Many of us hold accounts with the same banks our parents used and are unlikely to switch. A Frost Bank Survey found that 44% of participants responded to have no plans to change their bank ([Frost Bank](https://www.frostbank.com/dam/Docs/Newsroom/NewsRelease/FinancialBelonging.pdf)). But why?

>"I think the biggest reason people don't change banks — and of course, I'm biased on this, but I believe it in my bones — they just don't know what some banks offer."
-Phil Green, Frost Bank CEO

While online banks are competing for consumer deposits through lower fee structures, higher returns, and more convenient practices, many big banks are happy to stay still because their clients are unaware of their competition.

### Take Action

At investant.net, we're urging you to take action by getting informed and opening a HYSA if you haven't already! Taking advantage of a HYSA to earn upwards of 5% returns on your savings and cash reserves is crucial in today's inflationary environment.

Some of our favorite options today in August '24 (who Haven and I use ourselves):

- Wealthfront  |  [5.0% Cash Account](https://www.wealthfront.com/cash)
- M1 Finance  |  [5.0% Savings Account](https://m1.com/earn/high-yield-savings-accounts/)
- SoFi Bank     |  [4.6% Savings Account](https://www.sofi.com/banking/savings-account/)

For more options, checkout [BankRate](https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/) to select and compare some other HYSA offerings! Whoever you choose, ensure they are FDIC insured and make the most of it!

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Big Banks aren't cutting it. Why you should have opened a high yield savings account yesterday.

The High Yield Savings Account In 2024

A Career Plan is essentially captured in the statement, "I want to become X, and I will do Y to achieve this." It's not just a dream, but a clear step by step plan to reach a goal - a career goal. The average person will spend 1/3 of their life at work ([Gettysburg College](https://www.gettysburg.edu/news/stories?id=79db7b34-630c-4f49-ad32-4ab9ea48e72b)). Our work life will influence the energy we bring back to our homes which will influence the energy we bring back to work the next day. It is important we are taking steps everyday to move towards our career and life goals - which often go hand-in-hand.

>I want to become X, and I will do Y to achieve this.

### A Sense Of Security

It is relieving to know that you are on the right path to get where you are going. Have you ever had to drive across the country with not even a map to help navigate? Imagine the anxiety in that situation! Navigating a career is likewise a similar feeling if you do not have a clear map to know your destination and exactly how to get there.

By having this map, we can ensure every step is a step on the right path and audit frequently that we are still on track for our goals. It allows us to make changes when needed as well - because life happens, and if we go off course we'll know how to find our way back!

### What I Want To Be When I Grow Up

The question "What do you want to be when you grow up?" isn't just for children. As adults, we should continually ask ourselves this question to ensure we're moving in a direction that aligns with our passions and values. This section of your career plan should articulate your ultimate professional goal. It's not just about a job title, but about the impact you want to make, the skills you want to master, and the legacy you want to leave.

Consider not just the role you want to have, but the type of person you want to become professionally. This vision will serve as your North Star, guiding all other decisions in your career plan.

![investant-leadership-boats-stock-photo.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1721537640/investant_leadership_boats_stock_photo_8986845d59.jpg)

### Where Am I now?

Before charting a course to your destination, it's crucial to understand your starting point. This section of your career plan should involve a honest self-assessment of your current skills, experiences, and circumstances. What are your strengths and weaknesses? What unique experiences or perspectives do you bring to the table? What resources do you have at your disposal?

Understanding where you are now also involves recognizing any gaps between your current position and your ultimate goal. This gap analysis will help you identify the specific steps you need to take to bridge the divide between your present and your desired future.

### How Do I Get There?

**This is the ideal section to bring up with your current manager as they may be able to provide you with growth opportunities that align with your goal.**

This section is where you outline the specific steps you'll take to move from where you are now to where you want to be. Break down your ultimate goal into smaller, manageable milestones. What skills do you need to acquire? What experiences would be valuable? Are there certain positions or roles that could serve as stepping stones?

Be as specific as possible in this section. Instead of vague goals like "improve leadership skills," set concrete objectives like "complete a leadership training course by the end of the year" or "take on a team lead role in the next project." Remember, the more specific and measurable your steps are, the easier it will be to track your progress and stay motivated.

### How To Course Correct When Needed

A career plan isn't set in stone; it's a living document that should evolve as you grow and as circumstances change. This section should outline how you'll regularly review and adjust your plan. Set specific times for review - perhaps quarterly or bi-annually - where you'll assess your progress and make necessary adjustments.

>A mechanism for self-assessment.

Consider potential obstacles or changes that might require you to pivot. How will you handle setbacks? What signs will indicate that you might need to alter your course? By anticipating potential challenges and having a strategy for adapting, you'll be better prepared to navigate the inevitable twists and turns of your career journey.

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

What does a good career plan look like? Explore how to craft and refine your own.