by Nathan Natas 13 Replies latest social family
In this economy, I ONLY trust banking my money and wouldnt go into the stock market in ANY form. So this sounds like a good plan! I wonder if I will live long enough now, at almost 55, to see it to fruition?
How much money in interest a month does this plan generate once it gets going Nathan?
(checking pockets, sofa seats, laundry lint catch....for MONEY now LOL!)
Saving is like dieting you just GOTTA DO IT and quit making excuses for why you cant!!
I understand your distrust of the stock market but unfortunately, the stock market could be your only hope, if things go badly for the US economy.
How so? How much will your CDs be worth if the dollar collapses? The deficits are now being projected as vastly beyond anything ever attempted. More than that, the Chinese hold enormous amounts of US government debt and may now have figured out how to deal with the US 'just printing money'! The head of China's Central bank recently expressed interest in the 'Bancor' concept - in which a currency is based on a basket of commodities, rather than just gold or public trust.
The Chinese are reputed to be buying up copper and other metals far beyond their needs. And what do you think will happen to the dollars they got rid of? This could create a problem with huge inflation. You may want to look into CD's denominated in foreign currencies that depend on commodities like Australia and Canada.
metatron
MissingLink said,
I've never been good with finance. I just don't get this.
It sounds like once established you're going to have CD's maturing every 6 months. But you'll always have exactly 10 of them going. So every 6 months you'll have the option of withdrawing or re-investing that $500. Doesn't seem like much of a safety net to me. All of this is just so you can get a 3.5% return, right. Aren't there easier ways to get 3.5% on $5000?
Perhaps a graph or example figures would help explain why this is good?
Yes, ML, you will have CDs maturing every six months, and eventually they will all be for the long 5-year term, thus earning the highest rate this bank offers. And yes, every six months, when a CD matures, you will have the option of cashing it out or rolling it over.
But you are mistaken if you thought I was suggesting that you limit the CDs to just $500.
What if each CD was for $500,000 dollars? Would that provide a safety net?
IFF* you had millions, say, for example a total of $5 million to divide among investment vehicles, you could do better than my CDs. You could put the $5 million into US Treasury notes, which would be ultra-low risk and very secure. the interest paid would be less, but you could probably live off of 2% interest on $5M. That would be $100,000 a year, and it would be more when interest rates moved higher. And it would be tax-free income, too. That's kind of what H. Ross Perot does with his money. If you lived off of the interest, then the entire principle amount , $5M, could be left to your heirs or to the WTB&TS.
The basic plan is simple:
1. earn some money
2. save some of what you earn
3. look for ways to get your money to "work for you" via the magic of compound interest
4. relax, be generous to your friends and charities, teach your kids how to DO THIS FOR THEMSELVES. (If you just give them the money they won't appreciate it.)
Most people screw up on #2 (THANKS, WATCHTOWER!) and many can't get past #1. Sometimes we mess up on #3, but if we PAY ATTENTION to our money (instead of to the flock, unless you've got a flocking lot of money), those downturns we can usually recover from. What can't be recovered from is "never getting started."
ML also asked, "Aren't there easier ways to get 3.5% on $5000?"
Probably, but how secure are they relative to the CD? Did you have some specific alternative in mind?
*iff, Math., "if and only if."
Nathan, you are providing a very valuable service, which more should avail themselves of - especially the young, and especially in these times!
I wholeheartedly agree that the WBTS keeps their drones perpetually bizzy 'building up treasures in heaven' while giving zero attention to how these poor schleps are going to survive daily in the ever-ending 'present system of things'. Jehovah will provide is the mantra, but heaven help you if you land in dire straits...all your problems are 'inevitably your own fault' and any hope you ever had of the 'brothers coming to your aid' are quickly dashed. The last time I heard the comfortably cushioned CO drone on about retirement planning being 'false reasoning' and the need for shift-working brothers to find alternate employment so as not to miss meetings, I decided enough was enough. At least the Christian radio programs out there offer some kind of financial planning information to their adherents. The WBTS is too lazy to even assist in that meagre way. They just want YOUR MONEY, is all.
So I just wanted to express my appreciation for your efforts. I've learned something new today - how to ladder CDs. Thank you!
