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Bill, Financial Advisor
Category: Finance
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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in finding out about the ins and outs of finances, especially

Customer Question

in finding out about the ins and outs of finances, especially in this economy now and for the middle income group of lets say 100 k and under 50 k to those even making under 20 k a year. i have learned that i have to create my own wealth, this category of people do not have the liquidity to invest. most of these people with bad credit scores and living paycheck to paycheck. so my question is i already become creative asking your advice and substantiating using my 25 k in my ira savings. rotating that amount in conjuction with paying it back in 60 days and transfering to another ira savings and doing the process again. to the tune of paying off now most of my debts i have only 3 cars left and sallie mae and the house no more high % consumer debt. so in this process i search for long term annuities looking at supplement income the most for the future which i right around the corner for me im 60 now and have to expedite the process because i concentrated in the past in getting my 5 girls graduated from college. now 7 yrs later i find myself having to create my own mini wealth thru c d laddering etc. no more payday loans like in the past. now i just reborrow on my ira savings account. my question is i think instead of paying into an income or fix income or index annuity . i can do this process for me thru my certificate of deposits . mine c d range from 3.5 to 4% when i lock them up for 7 to 10 yrs but i have only those credit unions that allow me to borrow 100% thats where my liquidity comes in. since im not doing stocks or mutual funds my certificates that i buy in volumes of 5 k never crash, and if i create several loans off of those since they are collaterize i have the option to pay myself back or not. this has work great for me and in the future my main question is i think i can create my own supplement income every year by borrowing and paying myself back and still in the end of my certificate terms ear that little but safe and sure 3.5 to 4% . which basically what i looked into is what the income annuities are paying. thank you look forward to your response:
Submitted: 5 years ago.
Category: Finance
Expert:  Bill replied 5 years ago.

Bill :

Your strategy of investing in laddered CDs and accessing the funds when they mature is one option. If the CDs will be in IRAs and you intend on using the funds for 60 days and then returning the money, this only works if the IRAs are at different institutions and you don't violate the 1 year rollover rule per IRA account. You would not actually be borrowing the money but taking a distribution and rolling it over in 60 days. Here are some fixed annuity rates -