How to get 5% on a Certificate of Deposit (CD) like Investment

Part 1

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Most people today love a bargain. Just walk into any TJ Maxx, Marshalls, or Ross stores and witness the excitement on people’s faces knowing they bought a shirt for $15 that was $100 down the street at Bloomingdale’s. You can get an interest rate bargain on returns on your money as well, if only you knew where to find these bargains.
The “retail banks” don’t have these discounts; nor do the local banks; not even banks such as Bank of America, JP Morgan, or Wells Fargo. The local branches of these major banks are retail locations similar to other overpriced retailers throughout the country. But instead of buying and selling clothes, they buy and sell money. They profit on everything they buy and sell. You need to find the bargains not offered by these banks.

A major profit source for the bank is taking deposits. By paying the retail investor, you and me, as little as possible, 0-2% on our checking account or Certificate of Deposit (CD), and lending our money to other people and businesses for 5-10% or more, they make profits on the spread of what they borrow and what they lend. This is retail banking.
Read Mary’s story:
Mary opening up her monthly structured settlement check.

Mary Opening Her Monthly
Interest Check
For example, Mary retired with $100,000 in a CD at Bank of America. Five years ago, she earned a monthly interest check of $300 to help pay her bills. Six months ago the bank gave her a mere $80 per month on her CD. Working hard for 35+ years, she now found it impossible to make ends meet every month.
After hearing about the structured settlements described here, she took her money and bought a secondary guaranteed annuity. Now she earns monthly interest in the amount of $446. That extra $366 really helps with her monthly bills and she uses the extra to splurge on her grandchildren from time to time. Mary felt confident putting her money in the annuity because Prudential and the State of Massachusetts (if something went wrong with Prudential) guaranteed it. Secondary market guaranteed annuities are available to everyone that knows about them. Banks don’t want you to know about these because promoting them would reduce the profits that they earn on low paying CDs. Knowing about them can put extra money in your wallet. If you are savvy like Mary and want to learn more, follow the link below to find real live inventory available right now.
Learn more with a presentation here: structured_settlements.pdf
Show me real secondary market deals available right now
Buying a CD at 2% from Bank of America is like buying a sweater at Bloomingdale’s for top dollar when everyone knows they can go down the street to TJ Maxx and buy the same thing for less or get interest paying 4-7%; equivalent to a 50% discount at the retail store. In the world of interest-bearing instruments, the lower the price for the future payments results in a higher overall rate of return.
Say, for example, Bill gave an investor $50,000 and received $1000 per year, creating a return of 2% a year. Now, Bill needs money immediately to pay for a new car, fix the roof of their house, pay medical bills, or college for their child. What can he do? Bill could sell it to somebody else in a secondary market. Bill, in order to pay these expenses quickly, sells it to Ted for $25,000. Ted gets the same $1000 per year, but only paid $25,000. Ted, now getting a 4% return, just doubled Bill’s original rate of return and tripling his bank’s lousy rate of return.

You want to be Ted, the savvy investor in the secondary market.

Now you see the difference between buying a CD from a bank in the “primary” market versus buying the same cash flow in the “secondary” market. You get the monthly income for half as much, thus doubling your overall rate of return. What is the downside to this? Well, your large chunk of money, in this case, $25,000 is tied up in monthly payments. Not a big deal if you are saving for the future, but if you get yourself in a pickle like Bill did, you have options. Because you negotiated such a good price, you could resell it for more or less what you paid. You may not see this occurring in the real world, but these transactions happen everyday and they are guaranteed by the most secure insurance companies in the world. Those payments are typically insured again by the state of origin, creating a very safe investment.
Continue with part 2: Finding Interest-Bearing accounts Paying 4-7% with minimal risk
Learn more with a presentation here: structured_settlements.pdf
Show me real secondary market deals available right now
Category: Financial Planning

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