My Little Black Book Of Finance

Written by admin on August 2, 2009 – 1:42 pm

My little black book of finance At the beginning of this year I realized life was changing for me. Not only did I become an empty nester, I also realized how much interest income I was missing out on. When the recession hit me, I realized that I needed to up my game as far as investing is concern. I use to dump money in a money market account and forget about it. That’s when I was getting 4.9%. However, that same money market account is now at 1.6%.

My mission begun with research. I’ve learn many things that I should have known. My first step to re-investing my money better was investing money in CDs. Currently, they are the safest and highest interest rates around. I have found a CD that pay 3.0% at TD Bank. I’m still trying to figure out a good strategy with CD investing. I believe the trick is all about “timing”. In order to get 3.0% in this bad economy I had to go for a CD with a 60 month term. That’s 5 years. That means, that although I have the interest income paying out to another account, I can’t touch the principle balance. I figure the worst case scenario is that interest rates will increase, and I will still be locked into the 60 mo CD. It was a risk I was willing to take. Why?

I didn’t invest all my investment funds into the 60 month CD. I left some of my investment income in a money market account, for easy access. I also purchase several other CDs with different terms. My plan is to have a portion of money come available each year that I can re-invest in the best thing smoking.

My second step was to reduce every bill I could. I have successfully reduced my home phone bill. I know the trend is to get rid of your landline, but I’m from the old school. So, instead of turning off my home phone I cancelled all on the optional features. My new home phone bill is now currently $21.00 per/month. I also reduced my car insurance bill by increasing my premiums. And as I stated above, I now an empty nester so I’m saving that way too.

Lastly, I plan to reduce my expenses to under $2000 per/month and increase my interest income to $2000. Get the point — yet? My goal is to live off of interest income. Wish me luck. Stay turn to see how I’m doing. If I do well, you could try some of the steps yourself.

Tweet This Post Buzz This Post Delicious This Post Digg This Post Stumble This Post