Admit it. You’re curious about individual retirement accounts or IRAs. You know they can help you save for your future. Still, they’re a little confusing at times. I know because I receive many questions about IRAs on my podcast...
Even when you make six figures and save diligently, your finances can create some anxiety. Ken [name has been changed to assure privacy], a 36-year-old pilot based out of Pittsburgh earns $100,000 a year. The 36-year-old has various savings buckets...
The general sentiment surrounding CDs is that they are investments for risk-adverse retirees. Even if you are a long way from retirement, CDs have some peculiarities that make them worth taking a look at.
If the low yield on your CD or savings account isn’t even beating inflation, it might be time to take a look at I Bonds. Read on to learn more about how you can beat inflation and get a better return with this financial instrument.
Ever notice how nobody ever says “bonds and stocks”? In fact, ever heard anyone bring up bonds at a party and seen his listeners stick around? The more animated conversations always tend to revolve around stocks. Today, we’re putting the supposedly safe-and-boring part of your portfolio in the spotlight.
The “I” in I Bonds stands for “inflation,” and an I Bond is guaranteed to keep up with inflation as measured by the Consumer Price Index (the CPI-U, for us nerds). The interest rate quoted on I Bonds is the real interest rate: it takes inflation into account. A 0% I Bond, therefore, will rise in value over time, as long as we have a positive rate of inflation.
What’s been happening in the bond market (and soon, you too are going to be saying “bond market” and getting kicked out of parties) is that yields have been going up. Or prices are coming down. This is the opposite of what’s been happening since fall of 2008.
Low interest rates drive investors a little mad. We divide our money into two buckets—the cash and the portfolio—and then we get jittery if the cash doesn’t seem to be bringing us regular gifts in the form of sweet, buttery interest payments.