Interest on a CD (Certificate of Deposit)

[CalvinHobbes]

That's not going to be much of a life living off the interest. What about a wife or kids? What about clothes or entertainment? And how can you live off $50 for food. What the hell are you eating?

 

[mdchesne]

not saying i would, just saying it'd be cool to have that to drop back on if nothign else works out. or cool to actually do it if i were that lazy :thumbsup:

 

[tfinch2]

What happens when or if you get sick?

 

[Juice Box]

ouch on that rate.....I just scored one for $5000 at 4.2% interest over 13 months

 

[mdchesne]

i'd be screwed

 

[CalvinHobbes]

I was starting to look into CD's because I want a low risk investment. I'm also going to look into bonds. We have $40K - $60K to invest I just don't want anything too risky.

 

[qaa541]

Originally posted by: mdchesne

Originally posted by: AMDZen

Originally posted by: mdchesne
CDs and Saving accounts are awesome. I tabulated at the present interest on ym savings, if i somehow get $75,000 in it, i can make enough on interest per month to never work again and have enough for rent, food and gas

Please explain

$75,000 @ 4% would only be $3000 a year, what am I missing?

my rent is only 210 a month (awesome deal IMO), food is ~50 a month, and gas is only 40 cause i don't drive very far or often. so thats 300 a month. and i think my interest is 5% or something (local bank) so it averages out...or close to (but that's only if i had 75000 to drop in a bank. if i actually had that kind of money, it'd go to stocks)

75,000 * .05 = 3750 => 3750/12 = 312.5 per month. would have 12 a month extra for beer

You are taxed on any interest made on your savings accounts, so you will need more than what you think. I think a million dollars living on the interest alone would get most people by as long as they were really frugal. (really frugal)

 

[qaa541]

Originally posted by: CalvinHobbes
I was starting to look into CD's because I want a low risk investment. I'm also going to look into bonds. We have $40K - $60K to invest I just don't want anything too risky.

(Some) municipal bonds are state and federal tax free. Those would be your best bet. A 3% muni bond yield is like equivalent to a 5-6%ish CD if you adjust for taxes.