Hunting For The Best CD Rates

Once a week I go yield hunting.  I’m always looking for the best rates possible for my cash because I know that if I save X amount with a Y percentage yield, I’ll eventually reach my magical yearly cash flow number which will allow me to retire early if desired.

To get to your magical retirement number quicker, you can either save more or look for better returns.  Currently 80% of my cash hoard is locked up in 5-7 year CD’s yielding on average 4%.  The “problem” I currently have is that every year I work, is another year’s worth of savings I have to figure out what to do with it.

As you can see from my nifty CD banner to the right, I don’t have to look very far at all to keep track of what the best CD rates are in the entire country.  The widget keeps track of all the rates for me and for all of you who visit this site regularly.  I clicked on a Capital One 3% CD to see what it’s all about, and discovered it’s a 10-year CD! Doh….

DURATION, YIELD, AND DEATH AS IT PERTAINS TO CDs

The Average 401k Balance And Why It’s Too Low

Beef Wellington Medium Rare 401KAccording to Fidelity, one of the largest 401k providers in the world with over 12 million accounts, the average 401k balance is now around $77,300 as of 2/14/2013. In March of 2014, Vanguard reported that the average 401k balance has now shot up to $101,650. For workers 55 years of age or older, the average balance is $143,300.

In five not so short years, we’ve finally breached the peak average balance of $69,000 in 2007 and are now at record highs. Hooray! At the depths of the crisis in 2008, the average 401k balance plummeted 25% to around $50,000.

401k participation levels hover at a respectable 71% for those making $40,000-$60,000 a year. Participating levels are therefore clearly much higher for those making more, but the exact number is unclear. For those making $20,000 to $40,000 a year, the participation level drops to just 53%, which is understandable.

Let’s say the average age surveyed is between 30-35, you can now see how absolutely pathetic these balances are if you are actually depending on your 401K to retire. You need to have the mindset of always maxing out your 401(k) every single year while saving at least 20% of your income after full contribution. There really is no other guaranteed way to retire comfortably if you aren’t saving a good amount. The power is all in your hands!

SAVING IN YOUR 401(k) IS A MUST

The State of the Timeshare Industry

Timeshares are often thought of as very luxurious and accommodating vacations that can even end up costing you less than traditional hotel vacations. Despite how wonderful these extremely luxurious vacations are, due to the recent recession many timeshare owners are in need of a way out of their timeshares.

Because of this huge demand from existing timeshare owners to sell their timeshares, a few troubling problems have surfaced. The main problem is that with all of this supply of used timeshares there is little to no demand to purchase a used timeshare on the resale market. This has resulted in many timeshares being listed on popular e-commerce sites such as eBay and Amazon for as little as $1. These listings are basically a last ditch effort to get out of the timeshare contract.

SO CLOSE TO TAKING THE PLUNGE

Why Did Oil Collapse And How Low Will Gas Prices Go?

Finally, oil has gotten crushed!  We haven’t seen this large of a decline in oil in years as momentum speculators rushed out like someone discovering their Match.com date looks nothing like their picture!  One can say that the decline in oil prices was sparked by fears over slower US economic growth, but who are we kidding?  Someone who was long oil panicked, leading to more panic, followed by even more PANIC!!!

Perhaps the initial seller finally read, “Gas Prices Are Out Of Control And People Love It!” and spread it around.  The point of the post was actually to highlight how ridiculously OVERPRICED gas prices are given how much reported supply we have (US$1 million more barrels/day in 2011 vs. 2010).  If someone like me, who has a job and barely drives feels it, why doesn’t the rest of America feel it?  America does, and its hard for fundamentals to justify such levels.

SO WHAT NOW?

Should I Invest In CDs And Other Questions To Ask Before You Do

For my cash asset class, I pretty much dump all my money into long term CDs. My net worth is divided almost equally into stocks, bonds, cash, and real estate. I didn’t plan for it to be this way, it just happened and I don’t mind one bit. I love real estate the most because I like having a real asset which is tangible, produces income, and provides a hedge against inflation. My second favorite asset class is cash.

Cash is the only true means of passive income generation. I literally don’t have to do anything for the interest income earned after I decide on a CD. It just compounds and automatically renews to another similar duration CD after the initial period is over. My goal is to generate five figures a month in interest income from my CDs by the time I retire.

QUESTIONS TO ASK BEFORE INVESTING IN A CD