Why I only keep $500 in my bank account

Recently I have been testing this principle of keeping only a maximum of $500 in my bank account at all times. It might sound silly but hear me out.

So why $500 ?

Well $500 is just my figure but it’s enough liquidity for me to make short term purchases without needing to plan ahead. This could include extra groceries, smaller consumer items or anything you need immediately that is not overly expensive.

Anything larger in my opinion should ALWAYS be planned forward such as a holiday or a laptop. By getting this way of thinking, not only are you forcing yourself to budget ahead if you want something larger but start valuing your savings much more. This also includes rent, bills etc. so pay off all your necessities before you keep $500 around.

So I have this extra money now, what do I do with it?

Before you start going on a spending spree like some new clothes or a holiday, pause and think.

Do I need to?

If you haven’t had a holiday in a while and need a break (being burnt out is bad!) or you need an updated wardrobe for your new workplace then that’s something to highly consider putting forward.

However if you’re spending for the sakes of spending then stop! In my opinion it’s time to put your money towards something more valuable that builds your future. In my opinion it falls into categories:

  1. Building your wealth
  2. Building your learnings and education

As boring as it is, this is the reality especially towards the younger audience reading this. If you don’t do this, the concept of saving will get harder for you and by the time you have many more financial obligations, you don’t have a solid foundation to start with.

So…let’s start with that concept of building out your wealth first (I will get to learnings later on). If you’re building out your wealth, the next step is to figure out your risk profile.

Building your wealth:

Are you risk adverse?

Are you risk loving?

Are you risk neutral?

There are many ways of trying to figure out your risk profile but you should know yourself the best. For me personally I hover around risk neutral towards risk loving. I have friends who are risk adverse who would never touch stocks with a 10 feet pole.

But in the end no matter what risk profile you are, you can still build out your wealth now through planning ahead even if you’re risk adverse. One of the best examples of being in this profile but still starting to invest early is to put your goal of buying your first home. It’s one of the most sound investment paths and forces you to save your money early through something like a term deposit.

The goal however is still the same — keeping $500 in your spending account. With online savers becoming more popular, I would personally separate your savings into another account, perhaps at a smaller but big enough bank (they tend to offer higher interest rates than the big 4 banks).


Well you have little to no financial obligations AND you’re most likely young enough to have a safety net called your parents. The best time to take risks is now, when you have all this opportunity to do so. Not only this but investing into riskier assets such as stocks, CFDs or even cryptocurrencies teaches you all about the assets.

Think of it like this: We learn best by doing not watching

I can assure you that no one is an expert at something by simply watching or reading a book about it. The experts come by actually getting their hands dirty and messing with the assets. If you wanted to mess around with say stocks later on in your life, do it now! The amount of learning you get now without fear of losing much is one of our strongest assets in itself due to little financial obligations we have.

Giving myself as an example, I absoutely had no idea around cryptocurrencies until I actually chucked some money into it. Although my knowledge is still limited, I now understand the basics of setting a wallet up, the advantages and disadvantages of having an online vs offline wallets, what coins are used for transactional / trading purposes and others more for its use etc.

I know personally I would have never learnt this properly until I actually had decided to invest a bit of money in it myself.

What about if you need emergency funds?

Yes yes ! I mean I wouldn’t invest ALL your money in completely risky assets. I do keep some money in blue-chip stocks which are relatively safe and liquid enough for me to sell in case I do it need for an emergency. With term deposits also, there are exceptions for withdrawing money if you do have a financial emergency so there are always ways to make sure you’re not completely going dry without any emergency funds.

Ok what about learnings? What do you mean?

Learnings are something that can build out your experiences in order to make yourself either:

  1. More valuable in your career
  2. Personal development
  3. Supporting your own business / venture

This could be something from all the way like a MBA all the way towards ‘how to start your own business’ courses. The best way of understanding this is to have a solid set of goals for a 2 year, 5 year and 10 year period.

Yes — having a 10 year goal may sound absurd but it doesn’t mean that’s the exact goal you’re reaching. Many people shift as time progresses but it gives you something to aim at.

Personally I would invest into a course that relates your career or your business. Go on LinkedIn now and look at everyone who relates to your job function.

Now what are they missing?

Perhaps a course around data analysis or something along the lines of learning how to work with a piece of software. It’s often invaluable to put that skill in your repertoire rather than having a few thousand extra in your bank account.

So should I invest into my wealth or go to more learning courses?

In my opinion-both if you can.

They are both valuable for your long term growth and some job functions really rely on knowing certain software, tech or concept which is super important for you as a person to grow.

Hopefully this article gave you a bit more motivation to pursue that course you always wanted or buy a few growth stocks you wanted to dabble in but didn’t have the confidence too.

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I write here ✍ cornertechmarketing.substack.com ☆ I create 📹 Youtube videos at youtube.com/c/richardfangliu ☆ and for everything else linktr.ee/Richardfliu