Tag Archives: savings

To the Mattresses

9 Apr

This is basically a re-post of something I wrote a few months ago about savings and banks and sending your children to college but since then it appears that our federal government is up to their old shenanigans again and soon there might be no safe place for your money to reside except…you guessed it… So let’s review:

First of all a word to parents: Parents, I highly recommend college for your children. A college education is a great way to boost your child’s future earning potential but, how can we parents possibly save for it and then pay for it without saddling ourselves and our children with more and more debt?

Well, a few years ago I would have said, buy United States Savings Bonds! Money that I put into U.S. Bonds when my children were little doubled and even tripled by the time they reached college age. But in 2006 Congress voted to reduce the interest rate on bonds from 6 percent annually to .04 percent. That is unbelievably a 93 percent reduction in interest on U.S. Savings bonds and 93 percent is like…well…everything! So thanks U.S. government and forget bonds.

I’d say put your money in a savings account but remember that for every 10 thousand dollars you save this year, next year you’ll have 10 thousand dollars and about… 3 gallons of gas, because unless you haven’t been paying attention banks no longer give interest to you even as a thank you not to mention fair payment for using your money to make money for themselves… So, forget savings accounts.

How about a nice mutual fund or stock portfolio? Well, mutual fund agents used to guarantee 8 to 12 percent average interest over the life of your fund but of course that was a “market based” guarantee which was not actually a guarantee of any kind as they’d always remind you when you were signing up for the fund. And when they say no guaranteed interest boy they sure don’t kid around! No guarantee. No interest, period. The stock market (just like you suspected) really is for people with 14 billion dollars, who really don’t need all that money and who really do have 100 years to not care whether it’s here today, gone tomorrow and back again. So forget the stock market. It’s become tantamount to gambling so you think you will make lots of easy money there but just like at the casino, you won’t make any money there at all.

What about 401ks? Stock Market again! See above. Plus you get a 10 percent penalty and taxed another 20 percent if you use it before you are 59 and ½. Hopefully your kids are gone by then because you’re going to need that money. Trust me! (And what’s the ½ for? Just to screw with us?)

And now the following bill is being proposed in Congress and recent reports say that it has a 79% chance of passing. It’s called H.R. 992: Swaps Regulatory Improvement Act and as you probably can guess it will not be an improvement of any kind to anything. What it will do as I understand it, is weaken the already weak Dodd-Frank Act that is supposed to protect us from another big bank money grab and public bailout like the one we had in 2008.

Instead this amendment to Dodd-Frank will make it easier for banks to speculate with depositors money again and allow for a future where the FDIC will no longer need to guarantee depositor funds; it can just confiscate them  to recapitalize the banks should they go south once again. This would mean that your money in your bank could be used to bailout your bank’s theft of your money. So the bank of the not too distant future, for all intents and purposes can rob you!…legally!

So, how do we save for college and our children’s future or save for anything if this is what we have to look forward to? The mattress! Yep, you heard me! Every dollar in gets you 1 dollar out plus when you consider adding all of the spare change that falls out of your pocket and lands under the bed your mattress has a higher average annual yield then most government securities! So parents of America, To the Mattresses I say! To the Mattresses!

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