Whether you’re planning for retirement or just looking to protect funds, finding reliable long-term investments often means comparing CD rates at different institutions. CD rates tend to be low, and many plans end up surprisingly close to inflation. In other words, a portfolio with modest certificate of deposit rates may grow in dollars but not in real value. It’s better than just burying your money in a hole because $500 will be worth a lot less decades from now. A bottle of Coke that used to cost a nickel can now cost a dollar or more, not that the ingredients have gotten much better.
When you get to the point of comparing CD rates at different banks and credit unions, it’s important to remember the big picture. Not only will inflation reduce the impact of any earnings, but withdrawing money early will usually mean penalties. If you get stressed comparing all the details of different options, remember that some things in life are more important.
Invest time, not just money
If you spend two full weekends comparing plans online and talking to investors, you’ve already made a significant investment. How many dollars an hour is your free time worth? Assuming you work full time, those hours at night and on weekends are even more valuable. If you had to pay yourself overtime for the hours you spent researching and comparing financial options, would the information you gained be worth that much money?
It’s hard to “invest” time in a way that seems worthwhile from an hourly wage perspective, but “saving” time is more intuitive. If you need a complete portfolio for managed funds, why not hire a professional? They may charge a high hourly rate, but you also get the benefit of their years of training and experience.
Cultivate a wealth of experience
As any advisor will tell you, the best time to start saving is always now: the sooner the better. But earning money to book means overtime work or short-term past experiences. Enough funds can be set aside to invest through small lifestyle adjustments like packing a lunch and limiting discretionary purchases, but zealously saving pennies can also go too far. If you give up all opportunities to see your favorite band in concert or trade all your vacation days for overtime, you may be emphasizing savings too much. In the immortal words of Baloo, the Jungle Book’s wandering mentor, “If you act like that bee acts, no, you’re working too hard.”
Not planning ahead is irresponsible, but there is a point where any hobby or project can spiral out of control. Remember the big picture, and when you find yourself comparing CD rates at twenty institutions, consider simply hiring a financial advisor. There are better ways to invest your time and money that allow you to enjoy life from now until retirement.