FIRE: Why Froogal is better than your Savings Account
Numbers don't lie when you are trying to retire early, bankers do.
It is officially time for you to leave Ally Bank (Marcus/CapOne) or that other FinTech that you tried and then they immediately cut your deposit rate to 0%.
If this year has proven one thing, it's that every single one of these institutions does not care about you, your future, or your loyalty.
They care about their bottom line and they increase that number by paying you as little as possible.
We thought we had a good one with Ally, now we are entering into a post-Ally, Froogal world.
The Froogal world
Froogal's business model is a simple monthly subscription fee.
This fee only begins once you officially launch a club & start earning money (Froogal doesn't charge a dime until we start earning you more money than before).
Froogal has zero incentive to pay you less. Ever.
Rather, Froogal is incentivized to continuously search amongst the 10,000+ savings/money market deposit options available at US banks & credit unions to find users the highest tiered rate.
As Froogal accounts are in a private club format, you are pooling your savings with family/friends/organizations which increases your total deposit size substantially.
Bigger deposits get higher rates - hence you can access higher tiered rates.
To note, your deposit balance is completely private even within your own club. Only you are aware of how much money you have contributed/saved.
A big group of family & friends (20) individuals create a club with Froogal. Their average deposit/savings amount is $12,500. All together $250,000.
Before, their highest individual rate they could have picked up (as of 8/15/2020) is 1.05%.
By pooling, the new rate is 1.15%.
This rate can get as high as 1.26% at the $500k balance threshold.
OK, so 10 basis points (0.10%) doesn't seem like much to regular/non-FIRE folks.
But those of us trying to FIRE know the value of little wins in the long-run.
Additionally, the value goes beyond the 10 basis points you pick up today.
The ability to always obtain one of the highest rates possible with almost zero effort
The protection from ever having your rate slashed to 0% (like just happened to you most likely)
No one else can do this for you. Certainly not for $3/month.
Coming from a different angle.
Prior to Froogal, it is likely safe to assume that not all 20 members of your new club knew about FIRE.
Your invitation to them to join resulted in a number of Google searches and weird texts.
Most had likely even been saving at large banks (shame on them) earning 0%.
This makes the new earnings amount even more dramatic.
You are essentially giving the family & friends you invite to your club the ability to obtain a lifetime "pay bump" with almost zero effort.
You also eliminate these individuals' ability to complain about their bank and/or their inability to save (which may honestly be the most rewarding aspect of this).
"You should have joined Froogal" is the only response you will ever need going forward.
Here's the last piece.
Froogal also goes way beyond the shitty "savings features" we are seeing banks and FinTechs push out.
Yea, thanks for showing me a 50-year projection & a picture of a piggy bank. This doesn't help me save money or plan a goal any better.
Froogal goes way beyond and the only way to explain is to display it:
I know. It's an insane amount of detail you can add. But we're FIRE folks and it's what we already do in a less efficient format in excel.
Without the goal planning (which is social - you can do it with all of your club members) then what is the point of saving?
That's why we put so much effort into these individual goal screens.
As a last note - you can go access the dashboard & use the savings features for FREE. You do not need to have launched a club to play with these.
If you haven't done so already, go sign up at www.froogalsavings.com to join the FIRE Froogal movement.
You won't see the link currently on www.froogal.us as this is your reward for finishing the article.