What is a good Return?by David Falter on 09/08/20
It's been a busy summer and it doesn't look like its going to slow down for awhile. Driving back from a current rehab I heard a commercial on the local radio station. The commercial spot was from a local bank offering 4% on a 20 month CD. I almost choked and got a bit annoyed by this. Step back a bit and think about that return. What is inflation currently? 3-4% but that doesn't include groceries or gas. Things we need everyday have gone up in price and so has demand. If you add food, gas and the 3-4% inflation you are looking at more like 5-6% inflation or more. Basically if you put your money in this advertised CD you would be LOSING money, not making it. To keep your head above water you should be making roughly 7-8% returns. If you actually want to make money you should be getting 10% returns or higher.