Guest Editorial: Investing with Small Potatoes; Money Looking for Work

[By Ray Maratea]

Currently, I am mentoring those seeking a better-than-average return on their money. Those include spouse, daughter, grandchildren, nieces and nephews, and brother-in-law.

These individuals come to me for ideas; others ask me to be “firsthand.” For those who manage their own portfolios, I am given the honor of “View Only,” which is a title Chas. Schwab has for people who are okay with my looking. In the “view only” scenario, I do just that, but also email them whenever I see idle funds sitting in their account, saying, “You have money looking for work” or “money looking for a job.” The point is, I am active when it comes to seeing my money hard at work.

I have a strict ideology when it comes to investing, and that is that I only invest in stocks that pay dividends, stocks that have been around for 100 years or more, and make or sell something or a product the consumer absolutely must have or need. I do have to make concessions here and there because currently there are more companies with shorter lifespans than those one hundred years or more. So, I must backtrack on the statement I made earlier in this paragraph.

My time in the Stock Market goes back seven decades. Does that mean I am the answer to all your questions? No. But it does mean I can offer a strategy for investing that has been ignored intentionally for the last seven decades that I know of.

How many of you fully understand that the bank in which you keep your deposits lends your money out daily? The Federal Reserve Bank puts requirements on banks when it comes to lending money. Each bank is required to keep a certain percentage of deposits on hand called time deposits and demand deposits. When any bank’s deposits fall below the requirements, it is required to borrow from the Federal Reserve to meet them. 

Conversely when a bank has too much money on hand, it can lend it to the Federal Reserve Bank who in turn will pay the lending bank an interest rate of about t3.6%. What’s our money earning these days?

How many of you know that if you’re comfortable with buying CDs, they are available online with the same insurance guarantees your local bank offers you, and at better rates than your local bank?

So, if you want to purchase a CD at a better yield, you should open a brokerage account at Chas. W. Schwab. They do not have any charges associated with banking with them. No fees of any kind. I have been with other banks, such as Toronto-Dominion Bank, but when they sold their investment part of the bank to Schwab, I went along with it and found that Schwab has been easy to do business with.

My mission is to get you more “bank for the buck.”

If you have any questions, you can contact me by email at investsmallpotatoes@gmail.com.

(Raymond Maratea is a former resident of Candor who built his home on Schumacher Road.)