Revealing My Returns With… Vanilla Money!

Summary

In this video, the creator shares their experience of investing in 'vanilla money,' a term they coined for a bond fund strategy, yielding a 6.08% return over 30 days. They compare it with 'chocolate finance,' an alternative investment with a predictable but lower return through a top-up program. The creator walks viewers through the process of setting up their investment on Endow and highlights the pros and cons of each option, emphasizing volatility versus stability. Ultimately, the creator favors 'vanilla money' for potentially higher returns despite its fluctuations, encouraging viewers to consider their own risk tolerance.

Takeaways

• 😀 Vanilla Money is an investment strategy involving short-term investment grade bonds that has generated approximately 6.08% returns in 30 days.
• 😀 The term 'Vanilla Money' is a self-made name for a personal investment strategy that includes diverse bond funds for lower risk and higher returns.
• 😀 Investments in Vanilla Money are not guaranteed and can fluctuate with market movements, highlighting its potential volatility.
• 😀 Chocolate Finance offers a top-up program that guarantees returns of around 3.3% on the first $20,000 and 3% on the next $30,000, making it more stable but with lower returns compared to Vanilla Money.
• 😀 The risk of Vanilla Money is higher than that of Chocolate Finance, as it has more volatility, but it can offer higher returns over time.
• 😀 Bond funds in Vanilla Money are considered relatively low risk, primarily investing in short-term, investment-grade bonds with diversified holdings across hundreds of entities.
• 😀 Short-term interest rate hikes can lead to a decrease in the value of bonds, but long-term holding ensures interest payments and eventual capital repayment, making this type of investment less risky if held to maturity.
• 😀 In terms of ease of use, Chocolate Finance offers straightforward deposits and instant access through its card, but Vanilla Money requires a more detailed setup through platforms like Endows.
• 😀 Setting up a Vanilla Money investment through Endows involves selecting a range of bond funds and customizing the portfolio allocation based on risk preferences, allowing for flexible investments.
• 😀 While Chocolate Finance offers liquidity through its instant withdrawal options, Vanilla Money does not yet have a similar feature, making Chocolate Finance more appealing for immediate access to funds.
• 😀 Overall, Vanilla Money offers higher potential returns with more volatility, while Chocolate Finance is more predictable but with capped returns, so the choice depends on the investor's risk tolerance.

Q & A

What is 'Vanilla Money' as mentioned in the video?

Vanilla Money refers to the speaker's personal investment strategy where they invest in short-term investment-grade bond funds. The speaker created this term to describe their bond fund portfolio, which aims for higher returns than traditional savings options but with moderate risk.

How much return did the speaker get from Vanilla Money in one month?

The speaker invested $1,000 in Vanilla Money on April 10th and earned $4.70 in returns by May 9th. This translates to a return of approximately 0.47% over 30 days, or an annualized return of around 6.08%.

Is the 6.08% return from Vanilla Money guaranteed?

No, the 6.08% return is not guaranteed. The returns can fluctuate depending on market movements, as with any investment, especially in bond funds where interest rate changes can impact the value.

How does Chocolate Finance differ from Vanilla Money in terms of returns?

Chocolate Finance offers a more predictable, lower return through its top-up program, guaranteeing 3.3% for the first $20,000. In contrast, Vanilla Money can offer higher returns but comes with more volatility and potential fluctuations based on market conditions.

What are the risks involved in Vanilla Money investments?

The risks of Vanilla Money are primarily associated with bond market volatility, particularly due to interest rate changes. When interest rates rise, the value of bonds can decrease. However, the risk is diversified across multiple bond issuers, and if the bonds are held to maturity, the principal is usually returned.

Why does the speaker prefer Vanilla Money over Chocolate Finance?

The speaker prefers Vanilla Money because it offers potentially higher returns, even with the accompanying volatility. They believe that the bond funds' returns will eventually outperform the rates offered by Chocolate Finance, especially given the limitations of the latter's top-up program.

How easy is it to set up a Vanilla Money investment?

Setting up Vanilla Money is relatively straightforward using the Endow platform. The speaker demonstrates how to create a portfolio by selecting bond funds and allocating percentages to them. Once the setup is complete, users can continue adding funds without reconfiguring the portfolio.

What platform does the speaker use for Vanilla Money, and why?

The speaker uses the Endow platform for Vanilla Money because of its user-friendly interface. Although other platforms are available, Endow's simplicity and easy setup make it an attractive choice for the speaker.

What is the main disadvantage of using Vanilla Money compared to Chocolate Finance?

The main disadvantage of Vanilla Money is the lack of liquidity features. Unlike Chocolate Finance, which has a chocolate card for instant access to funds, Vanilla Money does not allow users to spend directly from their bond fund investments.

What is the speaker's recommendation for someone who is risk-averse?

For someone who is risk-averse, the speaker recommends considering more traditional, lower-risk options like Chocolate Finance, as it offers more predictable returns with less volatility. However, if you're comfortable with higher volatility for potentially better returns, Vanilla Money could be an option.