The safest option
Ramsey wasn’t keen on making modifications to the couple’s existing strategy. “I would go right back and renew that CD,” Ramsey told an audibly surprised Juliet. “You told me three times [already that] you didn’t want to risk it and I heard you.”
Juliet insisted she wasn’t keen on taking on any major risks or disrupting her routine, which led Ramsey to believe a CD was the safest option for the couple. “It’s not a very good long-term investment,” he said. “But it gives you a lot of peace.”
For seniors, a safe and predictable financial instrument, such as a CD, is probably the most appropriate one. They won't need to bear market risk or expose their savings to the economic cycle. Because CDs are FDIC-insured, they are one of the safest options available for safeguarding and growing your wealth.
With CD Valet – an online CD marketplace – users can shop and compare top certificates of deposit rates from various banks and credit unions nationwide.
Their extensive database shows the most competitive rates, with daily rate updates and earnings calculators that give consumers an array of free tools to help them find the right CD to meet their savings goals.
Generational investments
Ramsey believes that, at some point, people stop investing for themselves and start investing for the benefit of their children and grandchildren. People who can manage this shift in mindset can often handle more risk and deal with a longer timeframe on their investments.
“I’m 63 and I don’t have any CDs,” Ramsey revealed to Juliet. “All of mine is invested in mutual funds and the stock market. I’m comfortable with that risk. I can tell… that if you did that with your $250,000 you would be awake at night scared.”
If you’re interested in following Ramsey’s strategy, consider using Wealthfront to invest in the market. With their automated investing account, you can get a custom diversified portfolio of low cost index funds based on your risk tolerance.
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Like Ramsey, if you can plan ahead for your loved ones, your investment time horizon could be significantly longer.
