Captain’s Log

Start Investing Your Excess Savings

Begin investing your excess savings—cash, CDs, and money markets—that exceed your 3–6 months of living expenses and any large purchases you anticipate over the next 12 months.

For example, if your monthly expenses are $5,000, you should have between $15,000 and $30,000 in your emergency fund. In addition, if you plan to make any larger purchases within the next year, include that amount in your emergency fund as well. For instance, if you plan to buy a used car for $25,000 over the next 12 months, add that amount to your emergency fund and keep it there until you need it.

Once your emergency fund is fully established and you’re taking advantage of your retirement plan through work, Roth IRAs, or other tax-advantaged long-term investment accounts, it’s time to start putting your excess savings to work. This includes funds in CDs, money market accounts, or checking/savings accounts that are not part of your 3–6 month emergency fund or earmarked for upcoming larger expenses over the next 12 months. These funds can be invested through an investment account that Anchor Wealth sets up for you.

Why Investing Excess Savings Matters:

• Tax deferral on growth

You don’t pay taxes on unrealized gains. If your investment grows from $50,000 to $100,000, you won’t owe capital gains tax until you sell. At that point, the $50,000 gain is taxed at capital gains rates, which are typically lower than ordinary income tax rates. In contrast, interest earned on cash, CDs, and money markets is taxed as ordinary income.

• • Bonus:

If you never use the investment account and pass it on to the next generation, your heirs will receive it with a step-up in cost basis—eliminating capital gains tax on the growth during your lifetime.

• Favorable tax treatment on qualified dividends

Qualified dividends are taxed at preferential rates (0% to 20% in 2025), which are usually lower than the ordinary income tax rates (10% to 37% in 2025) applied to interest from cash, CDs, and money market accounts.

• Long-term growth potential

Cash, CDs, and money markets typically only keep pace with inflation at best—meaning they don’t generate meaningful long-term purchasing power. In contrast, long-term investing in the markets offers the opportunity for significantly greater returns.

• • $100,000 growing at 8% annually for 20 years becomes approximately $466,000
  • $100,000 growing at 3% annually for 20 years becomes approximately $181,000
  • That’s $285,000 more after 20 years!

Take the Next Step Today If you have excess savings sitting idle in the bank, now is the time to take action. Don’t let inflation quietly erode your future purchasing power.

Connect with your Anchor Wealth advisor today to review your emergency fund, discuss your liquidity needs, and create a personalized plan to start investing your excess savings for long-term growth.

Your money should work as hard as you do—let’s make that happen together.

Adam Ludwig, CEO/ Wealth Advisor

Help bring a smile to a child’s face at Christmastime

Summer sales offer a fantastic opportunity to find great deals on items needed for our Operation Christmas Child shoeboxes. We will be collecting donations from now to October 13th.

You can help by purchasing an item(s) from our Amazon wishlist.

Please have your donation sent to our Rockford office, and we will hold it until our Packing Party on October 15th at the same location.

Thank you in advance for your generosity and support!

If you have questions, contact Chris DeSchepper at (815) 201-5011 Ext. 1020.

5 Ways to Save for Retirement That You May Have Missed

As we get older, it’s easy to look back and see where we could have made smarter financial choices, especially when it comes to retirement. Maybe you didn’t take full advantage of your 401(k) match, or you didn’t build that emergency fund when you had the chance. The good news? You can still take control of your financial future.

CLICK HERE to finish reading Shane Stuart’s Blog for August.

Adam’s Nightstand

A highly recommended book that I’ve read more than once is The Power of One More: The Ultimate Guide to Happiness and Success by Ed Mylett.

Whether it’s prayer, eating better, working out, or showing kindness to others, the mentality is to do one more—one more rep, one more act of generosity, or to push a little harder with greater intention. Small actions, taken consistently, can lead to massive results over time.

I also highly recommend Ed’s podcast, The Ed Mylett Show, which I listen to on Audible. Most of the time, I haven’t heard of the guests before, but that’s part of what makes it so good. He interviews people from a wide range of backgrounds on a variety of topics—and the conversations are always insightful.

Happy reading—and even happier listening!

Would you like to read this book? You can find it on Amazon