Under the Yoke

Where are you and where are you going?
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fiby41
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Under the Yoke for March 2023

Post by fiby41 »

Income in March was 12.45% more than the previous month.
I have to return money borrowed from parents, without which the savings rate would have been 89.86% but now it is 93.72%.
Total savings grew by 3.67% in the past month.
Savings will last until April 2077 if I spend like I spent last month.
81.49% of allocated budget for that month was used up.
Went to another city for work for the previous few days. Costs will be reimbursed. Was not able to meet with a romantic interest in that city who I had previously ghosted until I got a job.

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Ego
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Re: Under the Yoke for March 2023

Post by Ego »

fiby41 wrote:
Mon Apr 03, 2023 12:25 am
Went to another city for work for the previous few days. Costs will be reimbursed. Was not able to meet with a romantic interest in that city who I had previously ghosted until I got a job.
Nice work on the savings.

I am going to reveal my ignorance with the next question. Please feel free to ignore if it is imprudent. We hear a lot about the Indian sex ratio issues (112 boys / 100 girls in your age cohort) but rarely hear how it is actually playing out on the ground. Is the sex ratio issue something you notice when dating? Is it something you talk about with friends? Maybe it is not as pronounced in your social level? I know you've spent time in Russia which is facing a similar issue but in the other directions with fewer men than women. Did you notice a big difference? Are there secondary effects that are a consequence of the sex ratio that you have noticed?

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fiby41
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Re: Under the Yoke

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More boys per girls entails a girl can put a guy in strictly marked boxes like "friend" subdivided into "school friend", "college friend", "friend of a friend", "neighbour", "acquaintance", "co-worker" and continuously extract attention, emotional energy and other resources with no chance of intimacy. These roles tend to overlap more when the sex ratio is in the opposite direction.

Indian society is intact mostly because most people won't compromise on 3 things when it comes to marriage-material: 1. Virginity 2. Paternity and 3. Fidelity.

The opportunity cost is extremely high when you can be in a LTR with a girl for 5+ years and then get zeroed out when her family marries her off to someone else. You've lost not only half a decade, but now you are with no degree, no job, no girl and you didn't even have sex.

There is a Seinfeld episode where George's partner gets mononucleosis and George turns studious. There is a scene where it is explained that all the part of the brain that was spent on getting intimacy was repurposed in another direction. IOW hope can be a terribly dangerous thing to be kept dangling distractingly.

Bonde
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Re: Under the Yoke

Post by Bonde »

fiby41 wrote:
Wed Apr 05, 2023 11:14 pm
There is a Seinfeld episode where George's partner gets mononucleosis and George turns studious. There is a scene where it is explained that all the part of the brain that was spent on getting intimacy was repurposed in another direction. IOW hope can be a terribly dangerous thing to be kept dangling distractingly.
Great show and funny bit about abstinence :lol: : https://www.youtube.com/watch?v=AariEduyb7s&t=11s

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fiby41
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Re: Under the Yoke

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@Bonde my abstinence seems to be paying off. Completed all 9 seasons of Seinfeld on office time & internet. It is the same lifestyle as during my aim/ambitionless youth but its just that now I am cashflow positive. Switching to binary extremes, but I'd rather have this job on one hand rather than a relationship on the other.

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Ego
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Re: Under the Yoke

Post by Ego »

fiby41 wrote:
Wed Apr 05, 2023 11:14 pm
Indian society is intact mostly because most people won't compromise on 3 things when it comes to marriage-material: 1. Virginity 2. Paternity and 3. Fidelity.

The opportunity cost is extremely high when you can be in a LTR with a girl for 5+ years and then get zeroed out when her family marries her off to someone else. You've lost not only half a decade, but now you are with no degree, no job, no girl and you didn't even have sex.
It is remarkable that traditional Indian culture is thriving despite these pressures. It also seems like the sex ratio is getting worse. Do you foresee a breaking point or will people simply adapt?

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fiby41
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Under the Yoke for April 2023

Post by fiby41 »

Calculated my hourly rate and figured if I can save 20 minutes by taking the rickshaw to the station why not.

Savings rate was 88.3% and savings grew by 3.06%.
Savings will last until May 2038.
Rolling average of savings rate stands at 89.20%
Investments are going at various rates of return from 13.41% on the small-cap ETF (unrealized, thinking of selling), 12.71% XIRR on the P2P lending so far, netted 10.38% on the 171 shares of MRPL sold. Most investments done on my behalf by the pension fund manager (I got to chose, and I can change for a fee) of the national pension system are in the negative single digits.

Received amortized principal and interest for 3 months of the B- rated junk bond I bought. 2 more payments left.

I had bought a bond and the platform I bought it on sent me 2 bonds instead of 1. I sold 1 of those after understanding the nature and risks associated with market-linked debentures. The platform colluded with the broker and froze my bond. This technical glitch affected ~160 people who participated in the placement of that bond. Then they sent me a legal notice asking for the bond back which I couldn't return as it was frozen by the broker. To prevent such a thing from reoccurring and to skimp on paying the annual maintenance charge if holdings exceed a threshold, I have opened accounts with 3 other discount brokers online.

The issue was settled eventually but I hit up a lawyer acquaintance for legal advice but of course every time we meet it has to be all about her (solipsism) and if I reach out I might get a cease and desist (restraining order) next time (there will be no next time.) Spent little over 1% of monthly salary or little under 10% of this months expenses on a coffee date from bumble. Got 2 matches there, on tinder and on okcupid each. It's a numbers game.

Sabaka
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Re: Under the Yoke

Post by Sabaka »

Great idea on the investment in the agricultural business! Also helps to root you to the land... I one day would like to transition from investments in abstract things to investments in my local community. More work than an index fund, but also societal benefits that traditional investing does not provide... best of luck!

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fiby41
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Under the Yoke for May 2023

Post by fiby41 »

Savings grew by 5.49% in May on account of annual bonus. My bonus amount was the lowest in my pay-range. Savings rate was 92.67%. Apparently I'm in top 10% in the country in terms of both saved-up wealth, income earners and MBA aspirants in the state. Worth taking a couple of years off to study to get in the top 1%. Don't feel like working somedays. 22-month savings-rate rolling-average is 89.83%.

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fiby41
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Under the Yoke for June 2023

Post by fiby41 »

Thanks Sabaka!

Savings grew by 3.98% in June. Savings rate was 81.98%. 23-month savings-rate rolling-average is 89.49%.

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fiby41
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Under the Yoke for July 2023

Post by fiby41 »

Savings rate was 91.06% which became 85.18% after paying the fees for yet another management entrance exam for which I will appear on 7th January 2024. EMIs of the test prep I purchased will start auto-debiting my balance via NACH (national automated clearing house) mandates from the 6th of this month.

As for the previous exam, I have been allocated a seat in a college which I have to confirm by 5th of August but I am going on a piligrimage over the weekend instead.
There is an opportunity cost of 2 years and the risk of coming back to the same salary range after those years are complete.

Second largest expense was SIM cards so I could continue online learning at home. Although we live in a city, local providers protecting their fiefdom means cheap fiber connection was not installed even after a month long wait.

Savings increased by 2.83% in July 2023.
Invoice discounting and un/listed bonds were the main sources of passive income.
24-month rolling average of savings rate fell to 89.60%
Savings will last until January 2050 if I spend like I spent in July 2023 every month.

Got promoted to a senior position so the next month's income from salary will be 29.26% higher.
I have also started teaching Russian in the evenings from July so that accrued secondary income will also hit the bank this month.
Got some freelance work but it is difficult to predict when it'll be over, when I'll get paid and how much.

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fiby41
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Under the Yoke for August 2023

Post by fiby41 »

Income in August was 10% higher than that in July.
Expenses more than doubled as compared to the previous month.

Top 3 expenses:
13 month gym membership.
11 month internet subscription.
Weekend pilgrimage.

Savings grew by 2.57% with a savings rate of 69.40%.

Top three sources of income were:
Salary
Teaching Russian in the evenings and
Referral income from investing platform.

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fiby41
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Under the Yoke for August 2023 Part 2

Post by fiby41 »

26 month rolling average of savings rate 88.9%
Average of percentage month-on-month growth in savings is same as the savings growth in August 2023 which was 2.76%
Accumulated savings will last for 11.55 years if I spend like I spent in August 2023.
Savings in August fell by 10.38% than that of July 2023

Predictions/Divination for September 2023:

Income in September will be 35.38% higher than the income in August with income from salary contributing only 3/4ths to this amount.
Savings rate will be 93.13% with expenses incurred falling to 3/10ths of that in August 2023.

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fiby41
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To Borrow Or Not To Borrow... Now, that is the question

Post by fiby41 »

I could borrow 17.77 months of salary and payback 24.53 months of salary over a period of 5 years or

I could borrow 16.86 months of salary and payback 21.91 months of salary over a period of 4 years or

I could borrow 14.81 months of salary and payback 18.09 months of salary over a period of 3 years or

I could borrow 9.79 months of salary and payback 11.23 months of salary over a period of 2 years or

I could borrow 5.92 months of salary and payback 6.36 months of salary over a period of 1 year.

The interest rate, which is 13.5%, which turns out to be 14% of factoring in the "processing fee", will be 12.9% if I wait until next year or for my salary to increase. The credit limit will also shoot up to 36.91 months of current salary. It is somewhat counterintuitive that the more I earn, the less I need a loan, the better the terms of the loan get. Buffet says in his biography that he has never borrowed more than 25% of his assets. But the structure of the personal loans incentivises borrowing the maximum amount available as the processing fee is constant.

As for what I plan to do with the loan amount: "leverage" or "arbitrage."

Local companies make white label products which amazon sells on their platform under their name. This become trade receivables for the manufacturing companies but they are still short on working capital. I buy the invoices that these companies have raised against amazon at a discounted price that gives me a return of 13.5% to 18% when receiving the amount directly in 90 days via an escrow account when it is settled by amazon.

Risks and assumptions:
The interest rate of the loan is fixed and reduced as each monthly payment is made.
The anchor honours the contract.
Default risk, fraud risk, liquidity risk, credit risk.
5 years is a long time and interest rate could fluctuate widely. If the company can get its working capital replenished by taking out a bank loan for under my floor of 13.5%, the deal won't go through.
I am able to find a deal immediately after receiving the payout of the previous one. Suppose the borrowed amount lies idle for 1 month out of every 12, I will have to raise the lending rate to make up the difference.
It is like using the stability of salary income to subsidise business activity but atleast I am not spending it away.
Getting a credit score.
Limited upside: Maximum profit I could make in this way over the tenure of 5 years if I don't reinvest the proceeds and only reinvest the borrowed money is 3.55 months of salary.

As for getting an MBA/PGDM:

The colleges I can get into with my current score provide placements that entail taking a paycut for a lot more people-facing work unless I graduate from there at the top of the class. Doable if I just want a piece of paper.
The "prestigious" colleges charge very high fees, around my entire FI requirement. So I could FI;RE or I could do masters from here, both not both, atleast at the same time.
Student loans are available if I manage to get into one of the top 20 colleges. But being a general engineering male candidate, that requires 97+ percentile score in the exams as 67.something% of the seats are reserved under affirmative action quotas.

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fiby41
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Under the Yoke for September 2023

Post by fiby41 »

fiby41 wrote:
Sun Sep 03, 2023 7:58 am
Predictions/Divination for September 2023:

Income in September will be 35.38% higher than the income in August with income from salary contributing only 3/4ths to this amount.
Savings rate will be 93.13% with expenses incurred falling to 3/10ths of that in August 2023.
Rolling savings rate: 89.05%
Income in September was higher by 38.96% than the income in August.
Salary income contributed 74.03% to total income.
Assets Under Management grew by 4.63%.
Savings rate was 96.37%.
Expenses in September were 16.31% of the expenses incured in August.
If I spend like I spent in September, saving will last for 78 years and 3 months until December 2101.
If I spend like I spent in September, the amount saved up in this month will last until November 2025.

Divination for October 2023:

Savings rate will be 88.96%
Salary will contribute 82.96% towards total income.
Assets Under Management will rise by 3.83%
If I spend like I will spend in October, saving will last for 28 years 9 months 24 days 8 hours 38 minutes and 24 seconds until July 2052.
If I spend like I will spend in October, the amount saved up in that month will last until June 2024.

ertyu
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Re: Under the Yoke

Post by ertyu »

Go you, excellent work

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fiby41
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Re: Under the Yoke

Post by fiby41 »

Thanks ertyu, even few words of encouragement mean a lot, especially since colleagues are the ones I spend most time socializing with, and they are the peer pressure in the opposite direction, if I choose to emulate them. Two have bought phones on EMI (equated monthly installments) while another one a bike. One was declined for a home loan and so is now looking for a co-signee. Another one got a credit card and bought a loudspeaker/boombox for his first purchase on it that cost a third of monthly salary at that time. Now he says he has been cheated when bank charges a fee to pay as much as he can to reduce the credit card debt instead of the minimum payment to carry it forward to the next month. This is myCountry's largest private sector bank that has been doubling in size every 3 years.

It has been a herculean task to 'preach' to any of these 8 co-workers and get them to invest some. So this place (ERE) feels like home where I don't have to keep my guard up. We eat lunch together and the credit card guy asked me why I don't get a new phone. I use a 8 year old phone whose screen developed cracks when it fell from the charging spot 2 months ago while on the pilgrimage mentioned above. I got blank stares when I said it works just fine and I can get most stuff done.

ertyu
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Re: Under the Yoke

Post by ertyu »

Yeah, being from a developing country, this sort of thinking is quite common. When people first begin having nonzero money, they start going for the shiny ego-enhancing products they've been told about on TV. Their immediate goal is the admiration of their peers. So why wouldn't you want that when you have enough money to get it? Such a strange guy, fiby41. There is very little long-term thinking, partly because the country hasn't been wealthy enough for people to know how wealth works or what to do with wealth. Even people who own businesses where I come from use them mainly as ATMs - their immediate priority is what they can take out of the business NOW rather than the overall long-term health of the company. Especially when the country is prone to economic ups and downs, it seems to people that you should get what material benefits you can while the going is good, because later it might not be. Very few people think long-term, let alone intergenerationally. In fact, if you leave your children money, you'll probably be doing them a disservice because they will spend it on similar immediate gratification. In a developing country, most of the people haven't been wealthy and don't have a culture of wealth and money. Advertisement is more than happy to move into the vacuum and tell you that wealth is for consumer bling because consumer bling is how you get social status.

You could consider explaining in terms that would make sense: because you can invest the money instead and this gives you blah interest, which does add up to a new phone over [x] period of time. Or because if you wait a bit more, the iphone 15 will be out, and the 14 would be got at a 200-300 usd discount. etc.

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fiby41
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Re: Under the Yoke

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Sabaka wrote:
Mon Jun 05, 2023 3:10 pm
Great idea on the investment in the agricultural business! Also helps to root you to the land... I one day would like to transition from investments in abstract things to investments in my local community.
Actually the land is not owned but leased. My capital contribution goes into buying fertilizers and seeds and paying labour costs*. The collateral is the farm produce. No bank gives a loan for the working capital required for buying the above, banks want charge of tangible farming equipment to borrow against. I cannot own agricultural land by myself yet although I have a 0.4% partnership stake in the LLP. You have to show that your ancestor was a farmer and his progeny must be successively added to the title of the agricultural land coming down to you in order to own some agricultural land yourself.** Even then, I or any business/company for that matter, cannot buy agricultural land owned by a member of a scheduled casteor a scheduled tribe. So leasing is a lot less hassle. It is also a capital light approach. When leasing, it is preferable to lease from owners who are out and about in the cities or someplace else and send them regualar payments than to have the land owners as neighbours so that the envious though of "how come they are doing so well on my land, let us kick them out and pocket the fruits ourselves" doesn't come to their minds.

Total allocation to the farms LLP is a tenth of savings which will go down to 6% as it throws out cash at about 16% p.a. upto which my profit share is capped. I will be retired from the partnership in 3 years.

* Labourers receive fixed monthly salaries, pilgrimage for their parents are paid for, primary education for their children and pension for employee retention.

** My paternal great-grandfather was called Dattatrey (Dattātreya, lit. given to the sage Atri) who worked as a clerk keeping the book of accounts for Gajanan Saw Mills owned by a Patel. Survived by 8 children so don't think he saved any and even if he did would have been thinly spread.

Paternal grandfather worked in an electricity company from 23 until retirement, lost his life's savings in a bank failure, and went back to work for a cement company.

My maternal great-grandfather named Purushottam (Puruṣottama, lit. the best of persons) was a doctor and had ancestral land.

Maternal grandfather moved away for studies, thus potentially relinquishing claim to this land, worked on the bimonthly suppliment for the local edition of the Gavkari (lit. the villager) newspaper doning multiple hats from type setter to editor, asked for a raise, didn't get it, so quit to become a farmer instead. Above mentined land was under cultivation by his eldest brother so he farmed land which he did not own someplace else instead. The landlord had no progeny/likely were infertile so asked my grandparents for their firstborn child, to which my grandmother agreed. Grandfather and landlord were partners in many business and social ventures most of which failed. At the landlords bequest, grandfather's name was added to the land title which he tilled to which the firstborn vehemently protested but she hadn't inherited it yet so couldn't do anything about it. But for this title to be valid grandfather's name should also be on the title of Purushottam's land. This was found to be the case after Purushottam's eldest grandson's died a few years ago.

Mind you, each of these lands is in the single digit of acres with the first land having 15 claimants and the second land having 6 names on the title.

Long story short, I can buy agricultural land if I have my mother's name also on the land title.

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fiby41
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Re: Under the Yoke

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Applied for a personal loan to assume a debt to asset ratio of 0.25 on the bank's website in which I've my salary account.
However my employer is a category C according to them although the employer is debt free so I was required a salary of 14% more to be eligible. My extra-salarial earnings don't count. So my file is on 'hold' and having a credit score of -1 = 'no history' for not having a credit card doesn't help either.

Then your contact details gets leaked to a 'direct sales agent' who gets a kick and possibly kick back commissions for creating your 'logins' at various banks and non-bank finance companies. He offered to get me a loan from an NBFC whose bond distribution platform I am registered on. NBFCs have higher interest than commercial banks and I need a spread equal to approximately the repo rate which is at 6.5% making my margin of safety 1/3rd. Example: I have to borrow at 12% p.a. (fixed rate, monthly reducing) and lend out at 18% so that these risks are covered:
1. The loans' principal + interest constituting the monthly EMIs (equated monthly installments) will be paid out every month from salary where as the investment income is lumpy
2. Non-existence of secondary market for instant liquidation
3. The business may improve its credit rating making it possible to borrow cash credit from banks instead of from retail investors like me
4. Processing fee for restructuring/pre-paying the loan after one year
5. Tax consideration as we'll be incurring tax cost from next financial year

Liquidated 4.64% of total savings which were the tax-exempted public provident fund reducing the amount in it from 1/3rd to 3/10ths. This took some frustration getting my own money out explaining the rules to the banker who didn't know any better. I've completed 7 of 15 years since opening the PPF account so now eligibly for withdrawing the lowest amount that was present between 2 years to 4 years prior to the date of withdrawal. He could see the withdrawable balance on his terminal but wanted a reason for me wanting the money out but the form I filled had no field where I could enter the reason. Wasted a Saturday and will have to go again next working Saturday to get the money completely out as it has now only been transfered from the PPF account to my savings account with the bank. State owned banks suck. It is not the business of the government to be in business.

All this is for raising 1/4 of total savings for going at 21.55% annualized for 185 days which will be ready for investing by 4th December 2023.

Recent investments have been purchasing invoices raised on companies and having them staggered to come due from 17th November until 4th December.
The anchors (against whom the invoices have been raised) are HPCL, OIL (companies dealing with oil refining and distribution with 51% ownership of the President of India), Reliance Retail which is a subsidiary of RIL (listed company with the largest market capitalization), a car battery manufacturer, an OTT platform and lastly amazon ahead of its big billion days sale.
These invoices are discounted from their value approved by the arbitrar which is further lower than the amount the invoice is raised for. IOW, not the entire amount for which the invoice is raised is discounted, giving a margin of safety between 5% to 10%, as approved amount, which becomes even less after it is discounted to account for the interest rate.
When the anchor pays/pre-pays, the amount is transfered to me by the bank via an escrow account along with interest calculated on a pro-rata basis after deducting the arbitration fee which varies by arbitrar but hovers around 0.288% of the invested amount.
The seller of the invoice gets a seven day grace period to settle if the anchor does not pay. After which it is considered as an event of default under which the seller has agreed to pay 2% additionally over the interest amount which is split equally between the arbitrar and the purchaser of the invoice (me.)

No defaults so far and my largest exposure to a single investment is 4.27% of savings.

Meanwhile,
30.60% of savings is growing at 7.1% annualized
a tenth of savings is growing at 16% annualized
9.08% of savings is growing between 7.51% to 8.5% annualized
2.34% of savings is growing at 6.50% annualized
6.56% of savings is growing at 8.1% annualized
7.71% of savings is growing at 18% annualized
20% of savings is growing at 13% annualized
1.20% of savings is growing at 12% annualized
1% of savings is growing at 10.5% annualized
0.62% of savings is growing at 10% annualized
0.24% of savings is growing at 11.5% annualized
0.48% of savings is growing at 10.49% annualized
0.45% of savings is growing at market rate minus brokerage account maintenance charges.

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