3 Things 10-21-24
Thing One
More On What To Do When Cash Yields Are Dropping
In a recent post, we talked about the idea that with the Federal Reserve dropping interest rates, our yields on cash and cash-equivalents would be dropping as well. What follows is a companion piece to that which includes some advice from the experts writing for Kiplinger.com on what to do with your money given the impending rate drops.
Buying a house:
“…Alex Blackwood, CEO and co-founder of fractional real estate investing app, mogul Club, shares his thoughts, ”The fed rate cut will lead to more entrants into the housing market. When interest rates drop, homeownership becomes less expensive, with more value in the buyer's market in the short term. With more cuts anticipated next year, some buyers will pause purchasing until further rate cuts happen. That presents an opportunity for purchasing now.”
That also makes the housing market more competitive, pushing home values upwards in the long term. “If the buyer waits too long, the limited supply and increased demand will shift the market to become a seller's market with bidding wars," Blackwood adds…”
Refinancing of buying a car:
“…Although the Fed recently cut rates, if you have a fixed-rate loan, nothing will change. On the other hand, if you want to take out a new vehicle loan or refinance your mortgage loan, the annual percentage rates from lenders will be lower. The rate cut will help a little now and more later as rates keep falling by making it more affordable to borrow money. You will pay less in interest, and your monthly payments may also be lower...”
Longer Term CDs (and Treasuries)
“…If you don’t plan to use your money in the near future, consider moving it out of a checking or regular savings account and moving it into a CD. Before rates take a hit, you can lock in your rate. Currently, many top-earning accounts still offer APYs of over 4% and 5%. Keep in mind that longer-term CDs typically earn higher rates than short-term CDs. Also, if you're unsure when you'll need your money, consider opening multiple CDs with staggered maturity dates, or CD laddering...” [note: Treasury bonds could be considered here too]
Stocks
“…You may be hesitant to put your hard-earned cash into a risky stock market, but it typically pays off. Historically, the market’s annualized average return has been around 10%. That alone makes long-term investing in stocks one of the best places to put your money and beat inflation over time…”
Thing Two
If It Feels Like A Scam, It Probably Is
Bank of America recently shared some helpful information with us on scammers and some of their most common techniques that we thought we should pass on. See below:
“…Imposter scams
"Your package was returned, and you need to reschedule your delivery"
How it works:
Initial Contact: You receive a communication about an issue - it may be with a delivery, your account, a family member or a device.
Deceptive instructions: You may be urged to provide information such as a code, or take an action such as provide remote access, move money to another account or digital wallet, ignore warning messages or input *72 or **21 in the phone.
The scammer wins: After following the instructions, the scammer now has access to your money, and it’s unlikely you’ll see your money again.
Help protect your money – pause, verify, help prevent scams
Bank of America will never ask you to take these actions. Verify all requests for information or money. Talk to your friends and family about the tactics scammers use.
Investment Scams
"They guaranteed a quick return on the investment, and I was receiving those returns in the beginning"
How it works:
Initial Contact: The scammer will reach out through social media, text or email with a unique investment opportunity or a chance to get rich quick.
Deceptive instructions: You'll be convinced to invest your money and will start to receive small returns.
Fake returns: You're then encouraged to invest larger sums of money based on the returns you are receiving but suddenly all communications stop.
Help protect yourself and your money
Always validate investment opportunities. Use caution if asked to provide personal or financial information, especially if asked to send money through digital currency or instant money transfers.
Tech support scams
"They needed remote access to remove a virus from my device"
How it works:
Initial Contact: Scammers reach out, via computer pop-up or phone call, claiming there is an issue with your device.
Deceptive instructions: You are instructed to provide remote access to the device and to download an app to fix the issue.
Access to personal information: Once you grant remote access or download the app, the scammer has access to your personal information. They can install malware on your device and demand a payment before they give back your access.
Help protect yourself and your money
No matter the reason given, be cautious about granting device access or downloading unfamiliar apps to fix issues with your devices. Run a full system virus and spyware scan and power off the device. Read more about tech scams.
Online sales
"I thought I’d scored really hard-to-get tickets"
How it works:
Initial Contact: Scammers create a fake website or post a “great deal” on social media for an item you’re had your eye on.
Deceptive instructions: They ask you to pay in less common ways such as cash, gift cards or wire transfers.
Pressured to act: You’ll be pressured to act quickly so you don’t miss out on the deal.
Help protect yourself and your money
Slow down and use caution if pressured to act quickly. Research the seller and products independently, check reviews for possible scam notices. Most online promotions that sound too good to be true - typically are.
Scammers are constantly reinventing new ways to trick people. While their stories may change, their tactics remain the same. Being aware of these red flags should make you pause, verify, and help stay protected:
You're contacted out the blue
You're pressured to act immediately
You're asked to pay in unusual way
You're asked to provide personal or account information
It seems too good to be true
If you authorize a transfer or send money to a scammer, there's often little we can do to help get your money back…”
Thing Three
Just A Thought
“One final paragraph of advice: do not burn yourselves out. Be as I am - a reluctant enthusiast....a part-time crusader, a half-hearted fanatic. Save the other half of yourselves and your lives for pleasure and adventure. It is not enough to fight for the land; it is even more important to enjoy it. While you can. While it’s still here. So get out there and hunt and fish and mess around with your friends, ramble out yonder and explore the forests, climb the mountains, bag the peaks, run the rivers, breathe deep of that yet sweet and lucid air, sit quietly for a while and contemplate the precious stillness, the lovely, mysterious, and awesome space. Enjoy yourselves, keep your brain in your head and your head firmly attached to the body, the body active and alive, and I promise you this much; I promise you this one sweet victory over our enemies, over those desk-bound men and women with their hearts in a safe deposit box, and their eyes hypnotized by desk calculators. I promise you this; You will outlive the bastards.”― Edward Abbey
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