Small Ball -- Building Your Savings One Step At A Time
April 20, 2009
| MoneyRates.com Senior Financial Analyst, CFA
In baseball, "small ball" is the art of doing a series of little things to score runs one at a time. While not as thrilling to the casual fan as a three-run home run, baseball afficianados recognize small ball as a way of taking control of the action, rather than waiting around for something good to happen. This kind of active, incremental approach also translates well to building up your savings.
Back during the booming stock market of the 1990s, savings accounts, certificates of deposits, and money market funds were merely an afterthought -- you might have money in them for emergencies or for liquidity purposes, but you didn't think of them as wealth builders.
Nowadays though, with the stock market providing more risk than return, those deposit vehicles deserve more attention. This means playing small ball, such as being diligent about shopping for rates. A recent look at CD rates showed there was about a full percentage point in difference between one-month and one-year CDs. Even among one-year CDs, shopping for the best CD rates could pick you up another percentage point. Similar differences can be found among savings accounts and money market rates.
The point is, when returns are hard to come by, these little differences matter a great deal. It's time to play small ball and scrap for each bit of return you can get. Otherwise, you'll be leaving money on the table.
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3 May 2009 at 1:32 pm
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