Lazy Money - A Winter Tale by Blaine Butcher, CFP
It was a beautiful grey morning as the sleet fell constantly outside. Mary was at her financial planners’ office. Mary complained to her financial planner, “My money is just so lazy. It doesn’t even want to eat. It just lays there in a savings account wasting away its spending power.
I love my money so I try to protect it, but ironically as inflation goes up my money gets weaker and weaker. I finally became so frustrated that I had to do something and that is why I came to see you.”
Mary’s financial planner smiled and replied, “I know how you feel. Many people have stories just like yours. Their money isn’t doing anything. It just sits around staring at monthly reports. Meanwhile inflation is getting higher causing the money to have less value. It’s a sad story.”
Mary was desperate, “What if I pull it out of the bank and store it under my mattress, or maybe I could dig a hole in the backyard and bury it? Will that get my money’s attention?”.
“No,” said Mary’s financial planner, “the only solution is to put that money to work.” “What? You mean send it out into the stock market where it might be devalued? While I understand that historically the stock market has always recovered from any low, I can’t bear to see my money suffer for even a little bit.” Mary expressed.
“Actually there are other alternatives that have almost no risk,” said the financial planner. “Like what?” asked Mary.
“Right now, US Treasury Notes are paying up to 4.5% and FDIC-insured CDs are paying above 5%,” said the financial planner. “Yes, but what about the risk?” questioned Mary. “US Treasury Notes are backed by the full faith and credit of the U.S. government; they are considered the safest investment in the world. CDs that are FDIC-insured are similarly backed by the U.S. government. As long as you hold your money until the maturity date, your money is at no risk of loss,” answered the financial planner.
Mary stepped outside in the driving sleet and the wind blew her hat right off her head. As she drove home she considered what her financial planner had said. She wanted to see her money safe and to watch it grow, maybe US Treasury Notes would be just the thing for her lazy money.
Perhaps, you’re like Mary. You love your money and would hate to see anything bad happen to it, even for a short time. Consider US Treasury Notes or CDs. The rates are higher now than they have been in years. You can lock in a rate for as short as a month or as long as 20 years. Give us a call if you are interested in learning more.