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Remember to Yield

Remember to Yield

| December 30, 2022

2022 – I’m not sure I’m going to miss you. Yes, you brought us a few good things worth remembering and celebrating. But it’s time to put a new foot forward with fresh energy and give 2023 a real chance. So, I thought I might give some practical suggestions to get the most out of this coming year.

For the last 10 plus years we lived in a very low interest rate environment. Savings accounts and CDs at the bank have paid little to no interest. And until recently, bond interest and stock dividends have also been quite lean. That has all changed over the last year.

Now that the Federal Reserve has raised rates, we are seeing decent interest being offered by local banks on money market accounts and CDs (1 year and longer). The yield on some investment accounts is also on the rise. Taking advantage of these changes has the ability to significantly improve the amount of income you get over the next year.

As a planner, I am always looking for ways to help you improve your position. This always starts with a clear understanding of where you are and what resources you have. This activity is one of the key skills taught for basic survival training. It reduces stress and allows you to see opportunities you would have otherwise likely missed.

I have spent a fair amount of December talking to clients about savings and liquidity. Most of us keep a decent amount of reserve savings at the bank for those times when things break, or other unexpected expenses come up. For some, that savings amount is significant. A portion of those dollars could likely be invested in the newer higher-interest accounts and actually generate some decent income. If we don’t take advantage, we are just leaving dollars on the floor.

We have been going through the same exercise here with investment portfolios. We want to make sure we are getting as much income as possible for each account while still providing adequate liquidity. What this all boils down to is good stewardship and being deliberate. 

Committing to being a good steward of resources requires a lens bigger than just our dollars. As we move into 2023, let’s look at how we use our time and energy. Are we getting a good yield for ourselves and others? If you would like some help reviewing your savings, portfolios, or other things you value, let us help.