Would you choose to give yourself less money in the future? Historically, bank CDs have done just that. In meetings with older clients, I’ve often heard how large their 2024 tax bills were.

That’s not much of a surprise considering that interest rates have climbed to where they are today.

Substantial sums in money markets, savings, and CDs have earned around 4.5% annual interest. A record 7 trillion dollars are currently being held in money market accounts. It seems that uncertainty has rarely been higher than it is today. And to top it off, the U.S. stock market has recently been at or near all-time highs.

Let’s take a closer look at those CDs and money market accounts. Here’s a fun exercise. Take the interest you earn on a CD and multiply it by your income tax rate. Then subtract that percent of interest owed to taxes. You’ve just determined your tax adjusted return on the CD.

Now, subtract the CPI rate of inflation from your remaining CD return. Is that amount positive or negative? Using average CD rates and middle tax brackets, the real rate of return on a CD has been negative in 17 of the last 20 years.

FDIC insurance is important, and having a stable return can provide peace of mind. But long-term investors know that without some risk there’s typically little reward. I bring this up to show that there are other opportunities available to investors to grow their wealth over the long term. You don’t have to settle for just keeping up with inflation. Or maybe falling short.

How much money is too much money in the bank? That’s a question I’m frequently asked. The answer, of course, varies from person to person. Anyone who tells you there’s a specific number for everyone is missing an important point. Ease of mind is critical to being a prudent investor. If unexpected expenses were to arise, having cash on hand allows long-term investors to remain invested.

But there is a point where too much cash on hand – cash that’s not earning interest – is detrimental to your long-term financial outlook. Work with an advisor to figure out what amount is right for you.

The investment world has expanded greatly over the past 25 years. In 2000, there were 80 exchange traded funds in the United States. Fast forward to today and that number is just over 3,600. ETFs can provide tax efficiency for after-tax investors. The money in your checking, savings or any non-IRA account is an after-tax investment. And the interest, dividends and capital gains paid out each year are taxable.

As the CD example above shows, taxes take a bite out of your investment returns. By structuring these portfolios with taxes in mind, you can keep more in your pocket and less in Uncle Sam’s. Being a long-term investor means having an iron stomach, as downturns are inevitable. Working with an advisor can help to make sure the level of risk in your portfolio is appropriate, given your tolerance for risk.

A 60/40 stock/bond portfolio has returned close to double digits every year since 1987. Inflation over that same time was 2.73% per year. Long-term investors have a great asset on their side. Time. Don’t be afraid to use it.

Email your questions to brandon@lifetimeplanning.com

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Society for Lifetime Planning is not affiliated with Kestra IS or Kestra AS. https://kestrafinancial.com/disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning past performance are not intended to be forward-looking and should not be viewed as an indication of future results.

I have watched with fascination as the U.S. media swayed with every utterance by President Donald Trump and President Vladimir Putin on Putin’s war of aggression on Ukraine. Vice President J.D. Vance led the attack and Trump jumped in scolding Zelensky that he “did did not have the cards.” The Ukrainian president, though  wincing, responding  that, “this (war) is not playing cards.”

I had a Catholic nun in grade school who would admonish her students with, “He who laughs last, laughs best.” Yet this is no laughing matter, nor is it card playing. It is instead a shrewd calculation by Zelensky, the David in this David and Goliath(s) story, who once again has bested both giants whose top heavy egos keep them off balance.

Trump boasted, “I will end this war the first week I am in office.” Then that changed to first 100 days in office. Remember, Trump did nothing to end the protracted war Putin has waged against Ukraine since 2014. Trump had four full years in his first term to try. Nada!

Many in the press have bought the notion that Putin does hold the cards and Trump and Putin are about to crush Ukraine. However, as one scribe recently wrote, “Not so fast on Ukraine.” Count me in this latter camp.

This war has been a disaster for Putin and Russia. The Russians predicted that they would overthrow Ukraine in three days when their full invasion began in February 2022. It is now over three years with Russian casualties mounting and Russia’s financial picture worsening every day. Estimates of Russian casualties are between 800,000 and one million deaths and injuries. The Stockholm Institute for Transition Economics reports that Russia’s fiscal resources are under increasing strain, threatening its economic stability.

The full scale invasion by Russia has prompted its neighbors, Finland and Sweden, to move from neutral to NATO members, strengthening NATO. The day after Trump’s and Vance’s staged tirades against Zelensky in the Oval Office that was seen on camera, the leaders of the European Union states met with Zelensky in London. They pledged to increase their support for Ukraine — sealing even further the bonds of their growing alliance. They also pledged impressive increases in their military budgets.

Led by the United Kingdom, France, Germany and Poland, there seems to be movement to create a European Army. As I write, the Polish Prime Minister Donald Tusk has indicated that all men in Poland will undergo some manner of military training. Today Poland’s military stands at 200,000. Tusk wants to increase the size of his military to over 500,000. Ukraine’s army is approximately 800,000 while Russia’s is thought to be around 1.3 million. All of this could very well lead to the creation of a European Army.

Zelensky was smart enough to gradually start making amends. (A little humility goes a long way in dealing with Trump and Putin.) The very evening after the Oval Office battle of words, a surprisingly fair interview with Fox News’ Bret Baier allowed Zelensky to make his case for the mineral deal that Trump wanted so desperately. That deal would provide Trump the cover his ego required to go forward with his exercise in peace making. The television interview allowed Zelensky to also make his case forcefully and rationally for peace and be open to supporting a ceasefire.

Zelensky had earlier underscored his seriousness about peace when he offered to step aside as President to get a secure peace. Now once again Zelensky was the crafty, charismatic, and authentic leader that the world community admires.

The next day, fresh off of his rude rebuke by Trump, Zelensky met in London with British Prime Minister Kier Starmer who showered the Ukrainian leader with high praise. Starmer understood what the press missed, which was that Zelensky had to force the issue of guaranteed security in a public way with Trump. Zelensky was bound and determined to be part of the discussion about conditions for peace in “his” own country.

Bullying Zelensky like a third rate leader was in itself third rate and not going to work with Zelensky. If Zelensky had to go forward without the support of the United States but with European support, then so be it.

It was not lost on the Europeans, including the Ukrainians, that this last year Europe had contributed more in aid to Ukraine than the U.S. Also of note is that Ukraine is every day becoming more and more self sufficient in producing their own weapons. In just these past three years Ukraine has gone from 20 percent self sufficient to a predicted 50 percent by year’s end. In fact, Silicon Valley is convinced that Ukraine makes a better and less expensive drone than any place in the world. They have sent their engineers to Ukraine to learn to make more lethal and far less expensive drones.

In addition, there is $300 million in Russian assets being held in European countries that could be used in their support of Ukraine.

This past week in Saudi Arabia, the Ukrainians agreed to a ceasefire and Trump lifted his temporary ban on Ukrainian aid, both in armaments and intelligence. Trump has now challenged Putin to meet the ceasefire and Secretary of State Marco Rubio has hinted that guaranteed security for Ukraine will most likely be in the final peace agreement, if it is to be had.

Ukrainians possess an indomitable spirit. They may suffer devastation and loss but cannot be defeated, especially with a leader like Zelensky. That and 1,000 years of resilience tell me so.

David Bonior represented Macomb County and Michigan in the House of Representatives from 1977 to 2003. He served as Democratic whip from 1991 to 2002.