By Teresa Kuhn, JD, RFC, CSA
The slings and arrows being hurled at savers these days are almost too painful to consider.
Aside from the near-zero interest rates (thanks for nothing, Federal Reserve!), those who save in traditional vehicles such as CD’s and savings accounts often face increased fees and the potential for their institutions to become insolvent.
The economy was blinking even before COVID-19.
Observant advisors, investors, and other well-informed people noticed a slight wobble in our economy months before the pandemic.
When the economy begins to falter, the default course of action is for the Federal Reserve to cut interest rates. This is usually great for some folks but not very great for people with large cash reserves parked in CD’s or savings accounts.
Adding insult to injury, the desperate rate cuts have, at best, had only a negligible effect on halting the economic downturn.
As of this writing, I see some credit card companies lower their credit limits, often without notifying their customers in advance. Another intriguing thing is that, despite historically low-interest rates, banks are avoiding even a whiff of risk and being unusually tight-fisted with loans. Recently, I have heard of seasoned investors with outstanding credit being turned away by conventional lenders.
A lesson driven home by the pandemic: Liquidity is KING!
Wall Street’s gyrations drove many people to seek safety, especially those at or near retirement. Liquidated assets, such as real estate and stocks, were transferred to safer vehicles, like annuity products or dividend-paying stocks. Some people, who didn’t want to lose another penny of their wealth, turned to Certificates of Deposit (CD’s) or traditional savings accounts.
However, if the COVID calamity taught us anything, it taught us that in a disaster, having access to emergency cash can keep a stressful situation from going into complete meltdown.
People who had the recommended six months of emergency money saved up, or were fortunate to have created multiple income streams, were not affected when they could not go to work. Those affected include owners of small or mid-sized businesses deemed to be “non-essential.” Americans with foresight and discipline to understand “HOW” and “WHY” planning for emergencies weren’t impacted as bad as those who didn’t understand planning value.
Now, though, I believe nearly everyone is going through the pandemic with the same understanding that in times of crisis, you must have streams of reliable, predictable income to see you through. You will need every single dollar to stop being LAZY and do the work of three or four dollars.
These days, putting your cash in a CD or bank is pretty much the same as storing it under your mattress or hiding it in a coffee can. Sure, it’s accessible, but without earning more, it will deplete very quickly in case of emergencies. You might not have any way to replenish it, either.
The smarter, more MUSCULAR way to stash your cash
If you are someone who has a large stash of cash withering away in a low-to-zero interest account, and you’d love to make that money work harder and smarter for you, then I have good news.
“The 100 Year Savings Solution”, a proprietary cash management tool, could be what you need. This is particularly true if you are near retirement who is concerned about flexibility, liquidity, and steady growth without exposing your money to risk.
The 100 Year Savings Solution provides some powerful features not found in CD’s or traditional savings accounts. It also gives you the additional peace of mind (the frosting on the cupcake!) of having a death benefit you can use to create an instant legacy for loved ones.
Creating a “!00 Year Savings Solution” is a thorough yet uncomplicated process in which you’ll discover new money truths and ideas to solve a variety of economic challenges.
We make it easy for you to discover what you need to know about creating a more prosperous and less stressful life. We will help you add a measure of predictability to your financial planning.
I am not interested in pushing products. Nor do I believe that the 100 Year Savings Solution is right for everyone. However, until we connect and explain how this incredible tool works, there’s no way you can know for sure if this is what you need to secure your financial future.
So, contact my office. My staff will answer your questions, ask you a few, and send you everything you need to turn your lazy money into a powerful workhorse.