The Federal Reserve recently announced a surprise: a 50-basis-point cut to its benchmark rate. This is the first reduction since the COVID-19 pandemic began, bringing the federal funds rate to a range of 4.75% to 5%.
And expectations are that rates will continue to drop in coming months.
What does this mean for you? For borrowers, lower rates could mean significant savings on loans. For savers, the opposite is true: Falling rates lead to lower rates on savings.
Ready to make your money work smarter, not harder? Let’s dive into how you can cash in on this financial shake-up.
1. A great time to refinance
If you’ve borrowed money, this is a great time to see if you can slash your mortgage or auto loan payment. Take a few minutes and see if refinancing your mortgage or your auto loan makes sense.
Even a small reduction in rates could save you big bucks. Crunch the numbers and see if you can score a lower rate. Then take the money you’re no longer paying in interest and drop it into a high-yield savings account.
2. Invest like the 1% and get 9% returns
With rates falling, we’re all looking for safe ways to earn as much as possible on our savings.
For the rich, there’s always real estate. For example, the 1% can lend money to commercial real estate developers on a short-term basis and earn great interest rates.
Well, now you can do the same thing. If you have as little as $500, companies like Connect Invest can get you into a diversified portfolio of commercial and residential real estate loans earning as much as 9%.
They’re called short notes — essentially, lending money to property developers and earning interest far exceeding what a bank would pay.
Here’s why short notes may be right for you:
- Start with just $500
- Short terms: Choose from six-, 12- or 24-month investments
- High returns: Earn up to 9% annualized interest
- Monthly income: Receive regular interest payments
- Diversification: Spread risk across multiple projects
Since your proceeds are secured by a diversified portfolio of loans, short notes are safer than most forms of real estate investing.
Whenever you lend for real estate, there’s always the risk of developer default. That’s why short notes pay more than the bank, and that’s why you’ll want to work with experienced companies, like Connect Invest, that have the experience and know-how to minimize your risk by finding the best, lowest-risk deals and helping you diversify.
Until recently, those of us in the 99% didn’t have access to investments like this. Ready to double your returns? Then take a minute right now to learn more about Connect Invest.
3. Cut your credit card debt
Credit card interest will fall along with other rates, but rates will remain crazy high: more than 20%. But that doesn’t mean you have to sit back and take it.
If you’re carrying a balance on your plastic, see if you can get a personal loan and use the proceeds to pay off that high-interest credit card debt. Look into balance transfer options, too.
4. Boost your savings rates
So much for borrowers. What about savers? For the last few years, we’ve enjoyed great savings rates, but now they’re declining.
That’s why it’s more important than ever to shop around for the best high-yield savings accounts and certificates of deposit. Now’s the time to lock in today’s CD rates before they drop further.
5. Rebalance your investment portfolio
Interest rates matter when it comes to stocks. A lot.
Since rates have begun to decline, certain parts of the stock market, like utilities, have been doing very well, but others, like tech stocks, are falling behind.
That’s why it’s so important to get a second set of eyes for your stock market investments. If you have $100,000 or more in investable assets, talk to a financial advisor. You can use a free advisor-matching site to find a vetted advisor in your area.
Take a couple of minutes to fill out a brief questionnaire and get matched to your ideal advisor. Then make an appointment and get some free advice on how best to meet this economic moment.
Bottom line? It’s been years since rates have fallen. Seize the moment. Destroy some debt. Supercharge your savings. If your goal is to get richer, the time to act is right now.
