If you can fog a mirror, you’ve probably heard. Inflation is the highest it’s been in decades.
Inflation is a ravenous creature that devours our dollars like a caterpillar on a leaf–slowly, methodically, little bits at a time. But this recent bout seems more like a famished elephant.
The only way to counter the ravages of rising prices is to make sure at least some of your savings is working harder than it would in a bank, where it earns next to nothing.
In normal times that means the stock market. But with markets in turmoil, many of us are looking for safer alternatives. That’s why I got so excited when I read Jason Zweig’s column in this week’s Wall Street Journal.
“Fortunately, raising the return on your cash is easier than ever,” he declared. “The two best choices are money market funds and U.S. Treasury securities.”
Really? Last I checked, money market funds were paying about .02%. Not anymore. This week, the article points out, more than 380 money market funds were yielding 2.5% or more.
Granted not all funds are paying high amounts. Google will tell you the ones that are.
The other alternative are U.S. Treasury bills, considered the safest and most conservative investments. Treasury Bill yields are usually ultra-low. Not today. According to Zweig, a one-month T-bill pays 2.6%.
That number looks even more attractive when you consider that Treasuries are free from state and local taxes.
Plus they are backed by “the full faith and credit” of the U.S. government, so they are considered risk free.
And there’s no fee when you buy them through Treasury Direct.gov or a brokerage firm.
As Zweig boldly proclaimed, “Cash isn’t trash anymore.”
How are you protecting your money from inflation? Let me know in the comments below.