Previously on the Money Minute, I told you that I think we’re in a recession.
I know that “recession” is a very loaded term and sparks a lot of anxiety in people. But it doesn’t have to, necessarily. I’ve said it before and I’ll say it again: recessions are times when great fortunes can be made if you lean into financial literacy and have some cash on the sidelines. Here are five ways to do it:
- Save, save, save. While it stinks that interest rates are going up for folks with debt— like people with mortgages, credit card debt, etc.— it’s great for savers. While we used to get nothing for interest in a bank, we now will see real returns with traditional savings accounts and CDs. Yes, finally, a penny saved is more than a penny earned.
- Bond with bonds. Just like interest rates are up with savings accounts, rates are also up with Treasury Bonds. Treasury Bonds come in maturation increments of months up to 10 years. You can buy them through your brokerage, or treasurydirect.gov and you can also have access to them through your retirement accounts. Now is the perfect time to bond with bonds, which brings me to recommendation #3…
- Take advantage of Series I Bonds. The “I” in “Series I” stands for inflation, meaning, I Bonds inflation-protect your money. And, they have a serious ROI right now! The annualized interest rate is 9.62%! You can buy a Series I Bond right now at treasurydirect.gov and you can invest up to $10,000 but start with as little as $25.
- Get into real estate without the headache. If you can’t afford owning a home or don’t care to deal with the upkeep + tenants of investment properties, you can still reap some real estate gains without actually owning a physical structure. Real Estate Investment Trusts or REITs are investments you can buy just like stocks. Different ones have different types of real estate in them like residential or commercial or malls or storage units! So you’re buying into a pool of real estate holdings without having to fix anyone’s plumbing! Winning!
- Index Funds and chill. I know it feels tempting to stop investing during a market sell off. It feels scary and like it’s only going to go lower. Just remember one of the few truisms on Wall Street: buy low, sell high. So if you have a long time horizon and you dollar cost average, then now is a great time to get high quality, diversified investments like Index Funds which track a whole market index like the S&P 500.
xo,
