Stop baking cookies for the corporate cookie jar!

[Phoebe Loosinhouse]

There was a very good Gretchen Morgenstern article in the the NYT today - sorry I can't post a link as it's to the "select"(paid) part of their website. It had to do with the proxy votes of various mutual funds and the entanglement of their fiduciary responsibilities to their fundholders and their other cozy relationships to some of the companies whose stock they buy. Long story short - some funds violate their fiduciary roles and go ahead and vote for things that are NOT in the shareholders or fundholders interests, i.e giant executive compensation packages that have no relationship to success or failure of the executive or company. In effect, it is transferring the wealth of the company from the owners to the managers. It is, basically, a scam.

I am sick to death of this shit. In the future, I am putting all my extra dollars in cds and avoiding the stock market and my mutual funds. Go to bankrate.com and read how to "ladder" cds if you are not familiar with the concept. Rates are up. This is smart, this is safe, and it keeps my dollars out of the corporate cookie jar that mutual funds and executives are so willing to help themselves from. There needs to be some accountability and some way to shut off this grotesque charade that robs American shareholders blind. That money belongs to you. It should be going back to you as dividends or re-invested in the company in some way that strengthens the company - not to give some corporate nitwit insider a gazillion dollar paycheck plus severance, plus stock options. They are robbing all of us blind. Then, they go into bankruptcy and screw the employees of their pensions.

[Nikki Stone 1]

1. What is "laddering" CDs?

I know so little about investing, having never had much to invest.

[Phoebe Loosinhouse]

2. I'll try to be brief - there really is a good explanation at bankrate.com

which by the way is just a terrific website to educate yourself on matters financial. You can check your mortgage rates, cds, credit cards, etc.

To ladder cds. Let's say you have $5000 dollars. You want to get a good return but you don't want to tie up all the money for too long. You could build a cd ladder.

You would take $1000 and put in in a 5 year cd
You would take $1000 and put in it a 4 year cd
You would take $1000 and put in it a 3 year cd
You would take $1000 and put it in a 2 year cd
you would take $1000 and put it in a 1 year cd

Every single year you would have a cd maturing which you could then cash or rollover depending on what the rates look like.
At the end of year 1, your 1 year cd would mature. You would probably roll it into a 5 year cd. At the end of year 2, your 2 year cd matures, which you roll into a five year cd. At the end of year 3, your 3 year matures and you roll it into a five year cd. At the end of year four, your 4 year matures and you roll it into a five year cd. At the end of year five your five year matures and you roll it int0 a five year cd.

Year 6 your 5 year from year 1 matures and you roll it into a five year cd. And so on and so on and so on. Your money is never too tied up and it's probably earning some pretty good compound interest. It's safe and it's in your control at all times. You can always cash out any cd any time you want to - you will just lose some potential interest. You will never lose money.

I hope that wasn't too foggy an explanation.

[Nikki Stone 1]

4. No, that's great. Very clear.

I've never had more than a handful of CDs but the next few years I'll have to work at socking more away. It's so funny how simple it is but I would never have thought of it.

[Warpy]

7. Just be aware what those CDs are paying, too

Short term CDs are now paying more than the 5, 10, even 30 year CDs.

[UTUSN]

3. Gosh, you HAVE extra $$$$$$$$s???????/ n/t

[GoneOffShore]

5. All it takes is $10 a week

To start saving.

And at some point, the miracle of compound interest kicks in.

Look at it this way, it's one happy meal at McShits.

[GoneOffShore]

6. All it takes is $10 a week

To start saving.

And at some point, the miracle of compound interest kicks in.

Look at it this way, it's one happy meal at McShits.

[Phoebe Loosinhouse]

8. Saving is habit and discipline. Pay yourself first is the way to save.

You can also go to Treasury Direct and have an automatic payment made for a US savings bond from your bank account. I think you can still buy a $25.00 EE for $12.50. We had one of those that my husband found in a drawer that was fully matured and it was worth $143.00 !! I think almost everyone could afford $12.50 a week. They just have to cut 3 takeout coffees.