Whether you are planning to retire or just want to protect your funds, finding a reliable long-term investment often means comparing deposit rates across institutions. Tariffs on CDs tend to be low, and many plans end up tracking surprisingly close to inflation. In other words, a portfolio with modest certificates of deposit can grow in dollars, but not at actual value. It’s better than just burying money in a pit, as $ 500 will cost much less in a few decades. A bottle of coke that once cost nickel can now cost a dollar or more, and it’s not as if the ingredients have gotten much better.
Until you approach the comparison of deposit rates in different banks and credit unions, it is important to remember the big picture. Inflation will not only reduce the impact of any profits, but early withdrawal will usually mean penalties. When you feel stress comparing all the details of different options, remember that some things in life are more important.
Investing time, not just money
If you’re spending two full weekends just comparing plans online and talking to investors, you’ve already made a significant investment. How many dollars an hour does your free time cost? Assuming you work full time, evenings and weekends these hours are even more valuable. If you had to pay for overtime for the hours you spent researching and comparing financial opportunities, would the information be worth that much money?
It’s hard to “invest” time in a way that in terms of hourly wages it’s worth it, but “save” time more intuitively. If you need a whole portfolio for managed funds, then why not hire a specialist? They may charge a high hourly rate, but you also benefit from their years of training and experience.
Cultivating a wealth of experience
As any advisor will tell you, the best time to save is always now – the sooner the better. But making money to save money means either extra hours of work or previous experience in the short term. Enough funds for investment can be allocated through small lifestyle adjustments such as packing lunch and restricting purchases on your own, but avid money-making can also go too far. If you give up every opportunity to see your favorite band at concerts or trade on all the days off for extra hours, you may be overemphasizing the savings. In the immortal words of the constant teacher of the “Jungle Book” Balu: “If you behave like a bee, you work too hard.”
The inability to plan for the future is irresponsible, but there is a time when any hobby or project can get out of hand. Remember the general picture, and if you find yourself comparing certificate rates on deposits in twenty institutions, just think about hiring a financial advisor. There are better ways to invest your time and money that allow you to enjoy life from now until retirement.