Maximizing ROI: Debt fund that invests in Trust Deeds vs. Traditional Savings Accounts

When it comes to making your money work for you, the decision between parking your funds in a traditional savings account or investing in a debt fund that specializes in trust deeds can have significant long-term consequences. At LBC Capital Income Fund, LLC, we focus on providing our investors with higher returns through our trust deed investments. Let’s take a deeper dive into why a debt fund like ours might offer a better return on investment (ROI) compared to traditional savings accounts.

The ROI Dilemma: Savings Accounts vs. Debt Funds

Traditional Savings Accounts: The Safe but Low-Yield Option

Traditional savings accounts are often seen as the safe bet. Your principal is protected, and the funds are easily accessible. However, the safety of savings accounts comes at a cost—low returns. Most savings accounts offer interest rates barely above the inflation rate, which means your money may not grow at a pace that keeps up with rising costs.

For instance, if you have $250,000 sitting in a savings account with an interest rate of 0.5%, after a year, your earnings will be only $1,250. With inflation rates often exceeding 2%, your purchasing power decreases over time, leaving you with less value than when you started.

Debt Funds Investing in Trust Deeds: A High-Yield Alternative

In contrast, debt funds that invest in trust deeds—like the LBC Capital Income Fund, LLC Income Fund—offer the potential for much higher returns. Our fund provides annual returns ranging from 8% to 10%, making it a far more lucrative option for those looking to grow their wealth over time.

When you invest $250,000 with us, you can expect to earn between $20,000 and $25,000 annually. That’s a stark difference from what you’d get in a traditional savings account and a game-changer for investors looking to maximize their ROI.

The Safety Factor: How Secure Is Your Investment?

FDIC Insurance vs. Real Estate Backing

One of the most appealing aspects of a traditional savings account is FDIC insurance, which guarantees up to $250,000 per depositor, per insured bank. This insurance provides peace of mind, knowing that even if the bank fails, your money is safe. However, the trade-off for this security is the minimal interest you earn.

On the other hand, investments in debt funds like ours are secured by real estate. Each trust deed is backed by a tangible asset—a property—providing a layer of security that’s more substantial than many other investment types. In the rare event of default, the property can be sold to recover the investment, which mitigates risk and helps protect your capital.

Inflation: The Silent Wealth Eroder

The Impact on Savings Accounts

Inflation is the silent killer of wealth stored in traditional savings accounts. As prices rise, the value of money decreases, meaning your savings lose purchasing power over time. The minimal interest offered by most savings accounts does little to counteract this effect, making it harder to achieve long-term financial goals like retirement or buying a home.

Beating Inflation with Trust Deed Investments

Debt funds that invest in trust deeds, like LBC Capital Income Fund, LLC’s, offer a way to not just combat inflation but to outpace it. With returns of 8% to 10%, your investment grows at a rate significantly higher than inflation, ensuring that your wealth not only maintains its value but increases over time. This makes trust deed investments a strong option for those looking to preserve and grow their wealth.

Liquidity and Accessibility: Which Is More Flexible?

The Flexibility of Savings Accounts

Savings accounts offer unmatched liquidity. Your money is accessible at any time, making it ideal for emergency funds or short-term financial needs. However, this liquidity comes at the expense of lower returns, as we’ve discussed.

Debt Funds: Balancing Returns with Liquidity

While debt funds may not offer the instant liquidity of a savings account, they do provide periodic income streams, typically in the form of monthly or quarterly distributions. At LBC Capital Income Fund, LLC, we also offer options for reinvesting these distributions, allowing your money to compound over time. This balance between high returns and periodic income makes our debt fund a compelling choice for those looking to grow their wealth while still having access to their funds at regular intervals.

The Role of Diversification

Savings Accounts: A Single Asset Class

Keeping your money in a savings account means relying on a single asset class—cash. While cash is safe, it doesn’t offer the diversification needed to protect against various market conditions.

Trust Deed Investments: A Path to Diversification

Investing in trust deeds through a debt fund like LBC Capital Income Fund, LLC’s offers a way to diversify your investment portfolio. Real estate-backed loans provide exposure to the real estate market without the hassle of owning property. This diversification can help reduce risk and increase your portfolio’s overall stability.

The Bottom Line: Which Is Right for You?

Choosing between a traditional savings account and a debt fund that invests in trust deeds depends on your financial goals. If you’re looking for absolute safety and quick access to your funds, a savings account might be the right choice. However, if you’re seeking higher returns, inflation protection, and a way to diversify your portfolio, LBC Capital Income Fund, LLC Income Fund offers a compelling alternative.

Why Choose LBC Capital Income Fund, LLC?

With over 13 years of experience and a proven track record, LBC Capital Income Fund, LLC Income Fund specializes in trust deed investments, offering returns of 8% to 10% annually. Our fund is designed for accredited investors looking to diversify their portfolios while maximizing ROI. With a focus on real estate-backed loans, we provide a secure and high-yield investment option that outperforms traditional savings accounts. Reach out to learn more.