The Fed declared war on savers about 2 years ago. Those that made good decisions and have savings to show for it are being asked to accept below normal yields (actually, no yield) so that the banks can rebuild their balance sheets and so that those who borrowed more than they could really afford can now afford it due to the lower rates.
Your money is WORTHLESS in cash form and that is how the Fed likes it.
You have three choices, gamble in the stock market or gamble in the housing market. The third is to move away from bubble land for a few years and use your money to live rent free.
I have been sitting on 550K for 2 years now while forking over 2100 a month in rent while earning about 300 a month in interest.
From what I calculate house prices need to fall about 10K a year just to make up the difference between what I am paying in rent versus what it would cost to own (true cost).
I may be forced to move to a place like Phoenix and just buy a nice home in a nice part of town for 150K cash and then come back in 5 years after this has all been sorted out. Being that I have the mobility to do so it wouldn’t be the worst fate.
