Searching for Yield

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The Federal Open Market Committee has lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%. This is the 3rd time they have cut the rate in 2019. For anyone that has funds in a money market account, this is bad news. The first step is to move any extra money sitting in interest bearing checking or savings accounts. These accounts are already getting a fraction of a percentage in interest. Then, move as much as possible out of money market funds into bond, dividend, and closed end funds. As you can see, money will naturally be moving to higher risk assets. There isn’t much choice if you want to live off of your investments and not deplete your savings every month. Within the next 3 months I need to go from generating $500 per month to as close to $1000 as I can get. I will need an average yield of 6% to get there. This means moving into higher risk investments, some of which I have described above. There are lots of options. The trick is to do the research and not move into the riskier investments to fast. If you have time, buying opportunities usually show up, if you can recognize a discount when you see one.

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