401K/403B Employer Match
For many working in the corporate or non-profit realm, there may be an opportunity to get some “Free Money” through the company match through your employer sponsored retirement plan. The reality with the company match is that this is a part of your compensation. When HR reviews the compensation plan for employees, it's not just about salaries, but they take into account bonuses, overtime, health insurance, work benefits, those free snacks in the kitchen, that foosball table and retirement plans.
So if your employer offers a match, take it!
What exactly does a company match mean?
Say you earn $50,000 a year and your employer 100% matches up to 6%. With a company match, you have to contribute your own money first into the 401K to kick start the employer also matching your contribution. In this scenario, if you put in $3000 (6% of gross pay of $50,000), your employer will contribute the same amount (which is 6%). If you contribute less than 6%, they will match less. If you contribute more, they will only contribute up to the 6%.
Read more about how this breaks down and how can also potentially save you on taxes today.
What's the catch here? Well, when you contribute to an employer sponsored retirement plan, it ties up your money for use later. So instead of being able to use that money for the present day, it has the chance to grow for the future. If you don't take advantage of the company match, you end up leaving money with your employer which could have been used to grow your retirement savings.
Free Stocks
If you've watched any YouTube videos, you might have come across a few people encouraging you to open a WeBull account for 2 free stocks. WeBull is a zero commission financial trading platform. The fine print is that you must be a new user and you must deposit at the minimum $100 dollars to the account. After everything clears, 2 free stocks will be deposited into you account.
Well, I tested this out and can confirm it's legit. WeBull is both a US and Chinese owned company. It’s not a robo-advisor, but it competes in the same space. It's more similar to eTrade or Robinhood. The platform is registered with FINRA, the SEC, and SIPC - governing bodies that monitor and regulate trading platforms and securities.
So how do they make money? WeBull makes money in a myriad of ways from subscription fees, interest on margin trading, fees, interests on their other financial products and they take a cut during the order flow management process.
If you've got $100 that you don't need and want to invest or want to test out investing for the first-time, this can be a good intro into that. Here's the link to sign-up. Please read the fine print as the criteria may change by the time you read this.
For full transparency, here's a screenshot of the free stocks I received. The platform is fairly straightforward. The stock CARV is what I purchased when I deposited my first $100. The other stocks are what I received as free stocks. I'll be holding on to them for the long-term since I don't need this money yet.
Save and Get an Extra $100
There are a few banks and credit unions out there offering you the opportunity to save and if you do so continuously, you'll get a bonus reward. These change often so when you are ready to, search for "saving account promotions" to find the latest. Depending on the bank, they'll have a few requirements for you to complete in order to get the bonus.
What's the catch here to get "free money"? Same as the others in this list. It ties up your cash so you won't have the ability to spend or perhaps invest it. This could be a good thing if you would have ended up spending the money anyways. Depending on your accountability goals, having a bonus might also encourage you more to save more and save automatically.
Some of these saving account can be a great place to park some cash. It'll be safe and easily accessible for short-term goals, but remember that savings don't grow as fast so figure out how much savings you'll need for emergencies and short-term goals and then invest the rest.
The Stimulus Package
The American Rescue Plan was passed and signed by President Biden last week. In the next few days, many of you will start receiving the third round of stimulus checks. You may be wondering, where is this money coming from. The simple answer is that we are borrowing it from the future, in the same way we take on student loan debt or credit card debt. We borrow from our future selves. Eventually it has to get paid back. At some point in the future, we may see policy changes like increase in taxes or downgrade of social services to pay back this money.
There's an interesting large social aspect of this new plan. By providing for families now, we will be able to invest in their well-being today so that they can thrive tomorrow which may save us a society more money.
If you need ideas on what to do with your stimulus check, check out this updated post. Also for those with dependents who were left out of the last two stimulus packages, there's some good news.
Free money often means trade-off and opportunity cost and depending on where you are on your financial journey, it's possible to take advantage of free money. Don't forget to shop around for any of these promotions just like you'd shop around for a sale. Banks are competing for your business so let them offer you the best deal they've got.
