Is your cash generating interest of over 4%?
Did you just say that cash is earning over 4%? Isn’t that better than the market right now? Is your financial advisor paying attention to what your cash is earning?
I was having a conversation with a neighbor recently. We talked about health, family, and business. When we discussed financial planning naturally Bernie Madoff came up. Ugh! What a crook.
Anyhow, I said “Good thing you’ve got a financial advisor at a time like this. Surely they’ve got your cash earning the big bucks with over 4% interest right now. The market is down, but cash sure is doing well!” They looked at me like “What?”. That’s when I realized not all financial planners are keeping their clients updated with the latest and greatest, so I am here to tell you – if your cash is not earning 4% it should be!
Look, it’s never too late to get started, or to correct the course. Pilots do it the whole flight through. That’s how we land where we are supposed to be. Being six months behind the ball is still better than not ever figuring it out. And yes, cash is earning over 4% annually in interest, if you put it in the right bank.
CDs might be earning 2-3% and savings accounts are earning about half of that. Money market funds or US treasuries – that is where it’s at. This requires you to have cash in an account like Schwab or Vanguard but it’s worth your effort to get it there.
Yes, $100,000 of cash will earn you about $4,500 a year right now. That’s a good Roth IRA contribution, a car down payment, or an extra vacation!!
This can easily be done yourself by opening up a Charles Schwab or Vanguard account and purchasing their standard Money Market Fund. You don’t need a financial advisor for this, but if you would like one, I’ve got your back.
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