Q:Judy wrote and asked, “Dear Derek:The banks and my brokerage accounts aren’tpaying any interest on my savingsI received less than a dollar in interest last month and I have over $100,000 sitting in cash, where can I have liquidity and potentially higher returns without taking on substantially more risk?
A: Judy, that is a common question in these low-interest times we are living in today. For many Americans today locating attractive yields for their “safe money” can be a challenge. I think first we must understand the market as it relates to risk to best determine where to place your save money until rates rise at some point in the future. Gone are the glory days of the 1980s when one could simply purchase a bank certificate of deposit and get a safe return of 15% or more. Today, yields are hovering around 0% at the same institutions. So first, we need to understand why that is and what it will take for rates to rise in the future so we can better assess where to place those same funds today. Following me over to www.miser-wp.com/dear-derek-blog to better understand these facts and where some alternative solutions may exist and how to safely access them.