Money You Didn’t Know You Had

Few take advantage of the capital at their disposal. In most cases, the reason is that they simply don’t realize the opportunities they are passing by. There are a few simple ways to optimize resources. Consider:

• Converting passbook savings accounts into better investments. According to an annual survey, 80% of individuals still have money sitting in low-interest savings accounts when they could be so easily transferred to Certificates of Deposit (i.e. Time Deposits) at nearly double the savings yield. Just make a quick review of what you have now. Should you still be owning what you do? People often hold investments long after they have forgotten them.
• Borrow on insurance. Many folks who bought insurance 10 years ago could borrow back the money at relatively low rates and reinvest it in Certificates of Deposit at higher rates.
• Pay real estate taxes directly instead of through a bank. Most banks withold an amount on monthly mortgage payments for paying the homeowner’s real estate taxes. Yet annual tax bills are sent annually. The bank is earning interest on your money. However, people how elect to pay the taxes themselves must make the payments on time. Banks can call in your mortgage if the taxes are delinquent, and they’d just love to do it if you are fortunate enough to have a low-interest mortgage.
• Pre-pay mortgage principals. People who begin repaying mortgage principals immediately along with interest can reap enormous savings. Most mortages allow prepayment.
• Eliminate excessive witholding taxes. Review your tax returns annually to compute tax refunds and file them to offset against future taxes. Know about allowable tax deductions that most people don’t take advantage of.
• Conduct a garage sale. Turn unwanted items into cash. With the ease and availability of online marketplaces now it is fairly easy now to sell excess belongings.

How to invest the extra funds? If you can afford to part with the money for some time (hey it didn’t exist in the first place right?), you can place them in stocks, especially nowadays with the markets depressed. A one to two year holding period on stocks bought during depressed times can yield fantastic amounts, sometimes doubling your initial investment.