A friend of mine turned me onto this. It’s called CD laddering. Not the cd you play in your car, the cd that gains interest in the bank. A cd is a high yield savings account that has a set length, and isn’t meant to take money out of until that time length is up. Cd laddering is when you have more than one cd and you keep adding to them over time.
For example, a good strategy is to have 12 cds. When you start, open all these in the same day: 1 year cd, a 11 month cd, a 10 month cd, and so on all the way down to 1 month cd. You can open them with 100$ each. I know this sounds like a lot of money, but it will still be your money, you are just investing it. After you open them, every month after that a cd will expire, when it does go back to the bank and open a new 1 year cd with the money you received from the expired cd plus whatever money you have to spare (you don’t have to add money if you don’t want to).
So lets review. To start open 12 cds, 1 month all the way to 12 months. Every month after, re-open the money you recieve from the cd into a new 12 month cd, adding money as you see fit. If you continue this, in a few years you will have a LOT of money in interest between the 12 different cds.
