Hey Money Guy Show Family! Cash is making money again. That’s right. Times are changing and you can generate income from cash again. (Seriously)
The Great Recession (2008-2009) slashed interest rates and they were in a free fall sitting on the bottom at 0.5% for the better part of a decade. Now, cash is making a comeback and it can yield over 2% today in high-yield savings accounts and over 2.5% in a 1-year CD and 3% for longer term CDs.
We’re at the point now where we all should start paying attention to cash as an asset class that can yield a return and what you can do about it.
Here’s What You’ll Find Out in this Episode:
- CD rates from 1984 to 2016 as reported from Bankrate
- Why Brian is like Carrot Top?
- Checklist to see what you need to do with your cash emergency reserves:
- Pull your bank statements to see what you’re being paid (hint: if it’s less than 1% you’re not earning enough)
- FDIC-insured money markets are well over 1.5%. Get it!
- Don’t just think about FDIC-insured money market accounts. Look at your brokerage accounts, too. Your default cash holding account may not be yielding enough.
- Re-evaluate what you’re keeping in cash reserves and how you look at cash. Prioritize your cash and make it work. Start with $1,000 first and then get to 3-6 months of cash reserves saved.
- Maximize interest rates without falling prey to bait and switch. So do your research and make sure the FDIC-insured accounts are more than introductory rates.
Resources Mentioned in this Episode
- Use resources like Bankrate.com to check rates and FDIC-insured status
Tune In and Go Beyond Common Sense with the Money Guys
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