Market Watch

[ultrarunner]

So yes my 1980s and 90s public education didn't teach us about CDs, investments, banking, etc. So I did a little "Googling" on the topic.

So currently let's say you get a CD at 5% fixed. You have $10,000 you can put into it. It's a five year CD. So, the money is going to earn $500 bucks annually for five years. At the end of the term your $10k turned into $12.5k.

So you're sitting on the money for FIVE YEARS and can't use it, and when that time is up you've only gained $2,500 bucks?? And, if inflation continues that $2,500 is, in practical terms, nothing? That sounds like a horrible proposition. First of all, nobody knows what's going to happen in five years. Hell I might not be alive in five years. Second, with market volatility like it is, that gain from the CD might actually turn out to be worse than if you'd used that cash to remodel a house or buy something you need while the item is cheaper. I just can't see myself finding a CD useful. When rates were low it would definitely not be worth it but even today I don't really see the benefit.

Turns out I see why my 1980s education didn't teach me CDs and investments. All those things are is gambling, and gambling is illegal in Kentucky.

You can pull money out anytime with interest penalty plus some offer step up CD where once during the term you have the choice to step up should a better rate be offered.

I’m ok with a 5% CD and a 2.75 fixed mortgage…

 

[MoKelly]

You can pull money out anytime with interest penalty plus some offer step up CD where once during the term you have the choice to step up should a better rate be offered.

I’m ok with a 5% CD and a 2.75 fixed mortgage…

In finance, there is no single answer for everyone. Each persons unique financial situation, and mental state on risk v little risk, dictate what is best for them. We should never criticize anyone’s financial choices. It’s their decision and they make the decision best for them at the time and what allows them to sleep at night.

By the way - I’m in no way saying you critisized anyone’s choices.

 

[ultrarunner]

The deceased husband of the widow selling the home I bought said her husband hedged investments in gold and silver coins, guns and ammo.

They found the guns and ammo breaking into 3 safes but never found any coins.

I keep thinking someday I might get lucky

 

[Cahaba Valley Farm]

So yes my 1980s and 90s public education didn't teach us about CDs, investments, banking, etc. So I did a little "Googling" on the topic.

So currently let's say you get a CD at 5% fixed. You have $10,000 you can put into it. It's a five year CD. So, the money is going to earn $500 bucks annually for five years. At the end of the term your $10k turned into $12.5k.

So you're sitting on the money for FIVE YEARS and can't use it, and when that time is up you've only gained $2,500 bucks?? And, if inflation continues that $2,500 is, in practical terms, nothing? That sounds like a horrible proposition. First of all, nobody knows what's going to happen in five years. Hell I might not be alive in five years. Second, with market volatility like it is, that gain from the CD might actually turn out to be worse than if you'd used that cash to remodel a house or buy something you need while the item is cheaper. I just can't see myself finding a CD useful. When rates were low it would definitely not be worth it but even today I don't really see the benefit.

Turns out I see why my 1980s education didn't teach me CDs and investments. All those things are is gambling, and gambling is illegal in Kentucky.

Fixed income investments like treasuries and CD's are not aimed at people with 10k to invest. They are for people who have hundreds of thousands to millions to invest. It's more of a preservation tool than a growth tool.

 

[Cahaba Valley Farm]

In finance, there is no single answer for everyone. Each persons unique financial situation, and mental state on risk v little risk, dictate what is best for them.

Kind of how it is with buying tractors.

 

[Torvy]

In reality, it’s all gambling. Stock market, real estate, banking sometimes it’s just a matter of the lesser of evils. Real estate has been the safer bet in the past.

For some people it is gambling. If you did what real investors do at a table in Vegas, you'd find yourself in the Black Book of people not allowed to gamble.

Savings rates are meaningless. If you want to earn money versus inflation, you cannot simply use banking products to do so. Seldom, if ever, has it been possible in history. Investing, even with just a little study, is typically going to outperform inflation. Over the past 50 years, the S&P average has beaten inflation by an average of 7 percentage points. (Roughly 3% inflation versus 10% roi). Actual investors do better since they don't tend to use the S&P.

 

[check]

My Kubota dealer is the same.

Last weekend, I had to attend a funeral for my good friend’s dad who recently passed. My friend inherited his Kubota L3901 tractor but, couldn’t find the keys. On my way to the funeral, I stopped by the Kubota dealer to buy him some keys to the tractor. I paid $22 for a pair of keys! I don’t know what they normally cost, or what they’ve cost in the past but, $22 is insane! I’m gonna have to start shopping around. I’m happy to help out a friend but, my dealer certainly isn’t helping me out.

Mike

That’s cheap. When I lost one of my F150 keys, it cost me $400 to get a new one! Highway robbery to be sure.

 

[CloverKnollFarms]

I'll use CDs if I want to have growth over a short period. Investments are too volatile to use them for short term gains in my experience. If my horizon for needing the cash is under 36 months, I prefer a guaranteed rate of return. For two years the market has been hammered, not great if you had a need for those funds. Long term we average over 10%... Short term has been abysmal. It usually is

 

[Rdrcr]

That’s cheap. When I lost one of my F150 keys, it cost me $400 to get a new one! Highway robbery to be sure.

Apples to Oranges. I'm assuming your F150 is modern. Meaning your 'keys' have a transponder to communicate with the ignition module and additional electronics that perform a multitude of functions (lock, unlock, tailgate, possibly remote start, etc.) including a theft deterrent. Moreover, your F150 keys require programming to function with the vehicle.

The Kubota L3901 key, is just a key. A shaped piece of metal that turns a cylinder. It doesn't have any fancy electronics and serves no other purpose than to start the tractor. The $22 I paid for two keys is heroically expensive and out of line.
In this day, age and inflation, I feel $10 would be reasonable for a pair of L3901 tractor keys.

Mike

 

[milkman636]

Fixed income investments like treasuries and CD's are not aimed at people with 10k to invest. They are for people who have hundreds of thousands to millions to invest. It's more of a preservation tool than a growth tool.

Exactly. setting up multiple 5%+ cds maturing at regular intervals over the next few years is basically safeguarding a future income stream than can periodically be drawn on or reinvested at a future time. Having cds might save a person from selling other assets to raise cash when the markets are not favorable. Or they may provide capital for a future opportunity that a person is not aware of yet. There are few safer places to squirrel away funds that don’t have a specific purpose right now.