If you haven’t already locked down your borrowing costs (fixing the rate on your mortgage and home equity loans, for example), now is the time. As I said, interest rates have nowhere to go but up; if you don’t lock in now, you’ll pay more later. Then—assuming you have cash left over after you’ve funded your six- to nine-month emergency cushion and made your retirement account contribution—pay down some debt. If you pay off a credit card debt at 18 percent, you get an 18 percent return. Pay off a mortgage at six percent, and you pocket about 4.5 percent (because you lose the tax deduction). Both returns are guaranteed. And if you’re looking for a feeling of safety and security, try sleeping in a house that you actually own.
Sidebar: Should I Buy Gold?
Gold doesn’t qualify as a risk-free way to double your returns. But if you happen to be anxious about inflation, you could keep it in your portfolio for safety. Terry Savage, author of The New Savage Number, puts it at the top of her list for protection. “What you’ll earn depends on the price of gold,” she says, but in times of crisis, “gold beats or at least keeps up with inflation.” And while the dollar stays weak—which it is expected to do until interest rates start to go up, perhaps in the second half of this year—the price of gold is likely to continue to rise.
There are two ways to buy gold. You can buy a gold-based exchange traded fund or ETF, which is traded like a stock. Or you can buy gold coins, such as American Eagles or Canadian Maple Leafs. Savage prefers the coins because she finds them less volatile. To find a dealer in your area, go to the Web site of the American Numismatic Association. Then store the coins in a safe-deposit box at a bank.
Jean Chatzky is More’s finance columnist and the author of several books. Read more of her advice here.