Where, oh Where is a Safe Place for Your Money Today?
With the bull market about to collapse and traditional save havens paying nothing, where can you put your money while waiting for the inevitable downturn?
There was a time when you could put your money in a savings account or a home or maybe savings bonds but now that all of these are providing zero to negative returns is there any safe place to put your money? Out of curiosity, I decided to check the rates and see if there is any place that makes any sense at all. I was not very optimistic, but felt like I at least had to try.
Here’s what I found and it is probably no big shock to anyone that the banks who are charging 15 -24% on the back end for credit card fees are paying out less than 1 % for so called savers. That imbalance has become so ludicrous it’s no longer even believable! What ever happened to usury laws? Oh, that’s right, the very same people who engineered the financial collapse of our economy are now running the government.
I decided to look at what I might earn on a small portfolio of $100,000 and went searching for rates.
Current Returns on Traditionally Safe Investments
- Savings - .05% - That’s NOT 5 percent, it is five tenths of one percent for a balance of $100,000. If you have $100,000 in a savings account that means you would not even “earn” enough to feed your family for one week! Nope – a savings account is not the answer.
- Money Market – I used to leave my money there and gain a point or two but that strategy no longer holds water or cash. The rates ranged from .5 % to .9%. So here again, “sweep” your money into a money market account and on $100,000 you earn a whopping $500. That might pay your mortgage payment for a week. The only one “sweeping” is the banks who are cleaning us out!
- Treasuries – at one time, treasury bonds were a good idea paying anywhere from 8-10 % with virtually no risk. The current rate you ask? A treasury bond maturing in 2020 – let’s see, that’s five years – the rate is about 2%. So, I tie up my $100,000 for five years and earn $2,000. That’s the first idea that makes any sense at all, but it is tying up the money. “30 year treasury bond yield drops to record low as global rout widens” reads one Bloomberg headline citing the collapse in oil and commodity prices. They say the feds between a rock and couple of hard places and does not know how to get things back under control.
- CD’s – A whopping 1.07 % on a one year and 1.7 % if I agree to tie up my money for FIVE YEARS! Are you serious? It is absolutely laughable to tie your money up in a CD these days but how can you laugh when your whole financial future is in ruins?
- Real Estate – Nope – whatever the pundits say, my house is worth 10 % less when I bought it in 2006. Buying a home used to be the best way to almost guarantee a 10% INCREASE annually. Now, it is a 10% DECREASE!
- The Mattress? – Believe it or not, this may be the best place right now because we are actually experiencing a deflationary cycle whereby a dollar today is worth more than it was yesterday. According to inflationdata.com, the “inflation” rate in the U.S. currently stands at a negative .09%. I’m really confused. Why do prices still go up in the marketplace?
If you haven’t figured it out by now, let me lay my cards on the table, I did not find any place that guarantees anything close to a favorable return on any investment now that the banks have decided to rape the consumer at every turn and have the political backing to do anything they want.
There was a time that usury laws actually protected the consumer, but those days are long gone and now that they can flex their political muscle any time they want, banks and investment brokerage firms are out to get every last dime they can lay their hands on and will pay you virtually nothing for the privilege of using your money to fill their greedy pockets.
I’m sorry to report that there is no Santa Claus and somewhere along the Easter Bunny lost its way as well and if you think banks are your friend, please take a look around! If you believe there is a safe place to put your money that will provide any decent kind of return you are, as a boss of mine used to say, “Smoking hopium.”
I decided to write this article in hopes that during my research phase I would find a good place to “park my money” while waiting out the bull market. I freely admit that I missed the market, and it was mainly because I was wiped out, but am not about to enter now while it is peaking.
So, as I said, I am still searching for a truly safe place to put my money that will return at least the 8-10% per year that everyone promises but few deliver.
It’s hard to admit, but I honestly did not find anyplace better than cash for now and have decided to just “wait it out” and scalp for minimal gains in the ups and downs of this market as it realizes it is topping out.
What was it that the guy on the movie Network said, we’re mad as hell and we’re not going to take it anymore! That was in 1976 and we thought things were bad then? Well, they are getting worse by the day and nobody seems to know what to do about it.
The short answer to our question? There is no place to put money today that will provide any kind of reasonable return. Sorry to disappoint but stay tuned and I’ll let you know how my scalping strategy goes.