Feb 19, 2013
>Interest rates are so low that they cannot make reasonable returns on their savings< You can blame Bernanke's "quantitative easing" for that.
So, what to do about it? My answer is to go to the stock market. There are lots of companies out there that pay generous dividends. Dividend payments have the second benefit that they are taxed at a lower rate than interest payments. There are over 100 companies that have a dividend yield higher than 3%. Yes, their stock prices may vary at any given time. But if you stay in for the long term, stocks go up in value with more consistency and less risk of return fluctuations compared to fixed-income investments.