Investment Ladder Strategy with CDs T-Bills and MYGAs

Investment Ladder strategy: CDs, T-Bills and MYGAs - in this video I explore what an investment ladder is, like a CD ladder, and provide examples for why a person may want one when rates are going up, and also when rates are about to go down. Owning fixed income assets like certificate of deposits, treasuries, and multi-year guaranteed annuities are great investments right now, and if you combine them to create an investment ladder they can work even harder. I complete the video by providing a step by step tutorial on purchasing a CD ladder from Fidelity.

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00:00 - Intro
00:19 - Defining Investment Ladder
01:49 - Illustrating the Ladder
03:11 - Rate Comparison
05:25 - Researching CD Rates
05:53 - Examples for Investment Ladders
08:23 - Buying CD Ladder on Fidelity

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Educating yourself with knowledge is the best investment you can make.

#bestcdaccounts #highyieldsavingsaccount #investing101 #investingforbeginners #passiveincome #fidelity

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LET'S CONNECT:

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All opinions expressed by Brian are solely provided as content. Do not treat any opinion by Brian as gospel that needs to be recreated. Brian is not a fiduciary or financial advisor. All financial topics are for illustration where the outcomes are not guaranteed or expected. There exists real risks in all forms of investment, so do your homework and make your own decisions.

[Spectrumpicture]

Some Credit Unions, offer ownership accounts (my account ownership account is fixed at 6% interest).

An option is to move interest from CDs into the ownership account every month. From there the interest is building in the ownership account, or you can transfer it into checking if you need it.

This helps if you need monthly income.

[ScooterOnHisWay]

Laddering fixed income is a great idea, regardless of the amount of $ you've got in it.

[wa]

I rolled my lump sum pension into a IRA in December. Allotted 10% to high dividend BDC's. Other 90% going into fixed income. I am in Fidelity.

Over past month have bought 13 CD's, with goal of a 15 month ladder. From 3 month-15 months, at 10k each, but a couple in same month as rates were to good to only have one. Last month picked up a monthly paying CD @5.30% and maturity payer @5.40%. First 2 were 3 month CD's @5.05% monthly payer, and 5.10% maturity, but just 5k each. Will also park some in 2, 3, 4, 5 years if can land higher yields close to 5%. Best 4 year now is 4.50% monthly, which my idle cash in the brokerage MM fund is paying per month.

With the ladder I am setting up, will have at least 1 CD a month maturing. For now adding daily interest to my IRA for retirement funds, and since 62 now, no need touch until RMD's @ 73 years old. Same for 401k in all dividend paying stocks. Unfortunately had to retire early due to health and thank goodness awarded pernament disability with Medicare at 62. Receive FRA pay now instead of 67 my normal retirement age for FRA. Big savior too, is Medicare saving me over $700 a month health insurance. But, rather still be healthy and working to increase pension and 401k.

Time to take advantage of rising rates. Ladders are good options to pick up higher rates if rates continue climbing.

[ArturoRubio-hi]

I’m stepping into cd tbills, I been setting up my banking foundation

[kevinrehberg]

I have 12K in an Emergency Fund that is a CD Ladder that was spread out to 60 months... Keep in mind it is for emergencies so I could afford to have it spread out that far.. and not all emergencies are the same size..So by having it in $100-125 increments I could determine the size of the "need" and the EWP I would have to accept without breaking the whole "nut"

Been gradually condensing the ladder seeking $500 minimums and looking for smallish EWPs.

[JZL]

I know it's not maximal returns but why not use no fee CDs and then have the ability to get it all out if there's a huge emergency. You can even swap CDs upward forever if the interest rate goes up in this uncertain fed environment. For like 4% total flexibility vs 5% locked in

[BRTardiff]

Hi Brian… I use Fidelity and didn’t realize that ladder option was in there. (Never bought a CD through them… equities only.) With SPAXX as a core fund paying so much right now, is there any advantage to a CD ladder other than locking in rates for 3-12 months in the event rates plummet? Love your videos!

[sushilsharma]

I subscribed. I learned something I had interest in with visuals.

[Fioremark]

Hello Brian,

I am under 30, just starting my career and recently learning about high interest savings accounts CDs. I’ve found Marcus by Goldman Sachs and believe that their rates are high.

What are you thoughts on them?

Do you have any tips for somebody under 30 to maximize their savings?

Thanks :)

[hatidzhetupeva]

Purchased my first CD ladder. Rates go up every day!!! So far..

Great video. Thank you so much

[kashkat]

I've been reading alot of articles mentioning how worthless 'cash savings' are in this current unstable economy and as a rookie sitting on over 1million savings do you suggest I invest in real estate, stocks or Gold?

[beingjohn]

Thanks again Brian for all of the great info.

[tcbridges]

Question, I have a 9 month CD for $250K maturing mid July I will make about $9K in interest. How can I avoid a 15% Fedb Tax on the $9K. Can I invent the total $259K to avoid Taxes or do I no choice to pay the 15% yearly. Im 75 and like all oldies hate paying taxes on money I already paid my taxes on.

[BackWhatsMines]

Great video thank you… i just learned about SFP… sinking financial protection..what REALLY is this?

[Btone]

Would CD Ladders be a good way to invest for a down payment on a home? My wife and I have both just gotten into our careers and are looking to save for a while. The plan was to save up about 10-15k then start diversifying. But we really want a home for ourselves.

[jolu]

i must be that old
my personal experience
when i worked at a Centrust Bank 80s
i remember passbook savings at 5.00 and
CD rates as high as 13 percent MTG rates were at 7% and above depending on term
but ofcourse Home prices were in the low 70K to 100k medium home
i remember getting a home for 63k financing
50k at a 10% rate for
10yrs
monthly payment 1k yes very high but my home then was paid off in 10 yrs
wish those 13 rates came back will it happen prob not
banks just wont allow it

[tcbridges]

Can you answer what the interest would of been in you chart for 1 year teer cd each quarter paying 5.25% on a $250K teer cd. I know that a 1 year at 5.305 investing for 1 year would make me Little over $13K. I think this is correct. What confuses me is the return because in a year from now I want to cash it all in a retire in Mexico

[dannywalker]

Just buy a one year cd every six months if you are a retired senior.

[walterp]

Thanks. What would be the advantage of mega given high treasury and cd rates? Thanks.

[modestalchemist]

so with the example given of four, one year, 10k cds maturing every 3 months. assuming 5% (yes i know that's unreasonable, but for ease of math), that is $500 in interest every time one of the Cd's matures.
so assuming that you reinvest the 10k back into the next 1 yr CD, you're only going to be making $500 every 3 months. $500 isn't enough to purchase another CD (min is $1000 unless you're buying fractions). And it isn't really much if you're trying to count this as a source of income.
So should you save up the $500 payments until you have $1000, and can buy one $1000, 1yr CD? ( you could do this twice in 1 year, so it would produce another $50, at intervals of 6 months)

this seems like a lot of work, and a big commitment (tying up 40k) for only $2100 profits in interest in 1 year (which takes 2 years to realize because you spend the first year building the ladder).

am i missing something?