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Should you be worried about interest rates? Over the past month, we’ve seen 22-year highs, which might lead you to question how this impacts your financial future.READ THE ARTICLE
The rise in interest rates is a response to an overheated economy and attempts to curb inflation. In the grand scheme of things, this is a normal part of economic cycles and not a reason to panic. Further, here are some key takeaways to keep in mind from Mr. Money Mustache:
📌 Stock market: Avoid trying to time the market and remember that historically, it has always gone up in the long run, despite occasional fluctuations.
📌 Savings accounts: While higher interest rates on savings accounts might seem appealing, investing in the stock market can still be more beneficial due to its long-term growth potential.
📌 Buying a house: Rising interest rates make mortgages more expensive, which impacts both homebuyers and landlords. However, this could help stabilize or lower prices in the long run.
📌 Interest rate trends: Predicting interest rate movements is challenging. Rates should go down when it’s determined that the economy is slowing down. That could be in 18-24 months, or longer.
Your best course of action amidst high interest rates is to focus on what you can control, and not much has changed. Dramatic shifts in strategy are probably not the answer.