I heard a presentation today that I really liked. It was given by a bank rep to local customers. She helped the investors designate their money in short term and long term, and understand the power of tax-deferral. The first ‘pocket’ of money she discussed were funds in the checking account. She would ask, “Is this short-term or long-term?”
“Short term”, would be the reply. And how does that match up with taxable versus tax-deferred? Obviously – taxable.
Answer=long-term…but, wait a minute, the interest on CD’s is taxable and we agreed that long-term money should be tax-deferred when possible.
“What’s the big deal?” someone in the audience asked.
Ding, ding, ding. Lights went off everywhere in the audience.
Now THAT’s a ‘pocket’ of money worth talking about!
- 12 rules for making retirement savings last (walletpop.com)