Whether you are planning to retire or just want to protect your funds, looking for a reliable long-term investment usually means comparing certificates of deposit from different institutions. CD interest rates are usually low, and many programs end up unexpectedly close to the inflation rate. In other words, a portfolio with a moderate certificate of deposit may grow in dollars, but there is no real value growth. This is better than simply burying the money in a hole, because the value of $500 will be greatly reduced in a few decades. A bottle of Coke that used to consume nickel may now cost a dollar or more, and the composition does not seem to be much better.
When you compare the deposit interest rates of different banks and credit unions, it is important to keep the overall picture in mind. Not only will inflation reduce the impact of any earnings, but early withdrawals usually mean fines. If you feel pressured by comparing all the details of different options, remember that certain things in life are more important.
Invest time, not just money
If you spent two full weekends comparing plans online and talking to investors, you have already made a major investment. How much is your free time worth per hour? Assuming you are working full-time, evenings and weekends are more valuable. If you have to pay yourself overtime for the time spent researching and comparing financial options, will the information you get is worth that much?
From the perspective of hourly wages, it is difficult to “invest” time in a way that seems worthwhile, but “saving” time is more intuitive. If you need the entire portfolio to manage the fund, why not hire a professional? They may charge high hourly rates, but you can also benefit from their years of training and experience.
Cultivate experience wealth
As any consultant will tell you, the best time to start saving is always now-the sooner the better. But the money set aside to make money means extra working hours or short-term work experience. You can set aside enough investment funds through minor lifestyle adjustments (such as packing lunches and restricting personal purchases), but eagerness to pinch a few cents may be too much. If you give up all opportunities to watch your favorite band concerts or make deals throughout the holiday, and spend a few more hours, then you may overemphasize saving. In the immortal words of Baloo, the unwavering mentor of The Book of the Jungle, “If you behave like a bee-that doesn’t work, then you have worked too hard.”
It is irresponsible not to plan for the future, but any hobby or project may get out of control at any time. Keeping the big picture in mind, when you find yourself comparing deposit rate certificates among twenty institutions, you can consider simply hiring a financial adviser. There are better ways to invest your time and money to enjoy the life between now and retirement.