Financial question > Where to put money?

TurbotaTurbota Posts: 255
edited April 2004 in The Clubhouse
I have a couple of financial questions. I checked out the various "Motley Fool" financial message boards. You can read these boards, but you have to pay an annual fee to Motely Fool in order to register and be able to make a post.

Looking for a good free financial message board.

Maybe someone may have some info:

Since I got out of the stock market a while ago, I have a fairly large amount of money sitting in a credit union Money Market account. This account paid 5.5% per year at one time, but since interest rates have gone so low, it is now only paying 1.31% annually at this time.

I don't want to tye this money up for a fixed period of time such as buying 1 year CDs, etc.
I want immediate access to it just like if it was in the bank.

Certainly there must be better places to put this money in that will pay better than the piss poor 1.31% I am now getting. I want NO risk at this time.

Thanks,
Ron
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Post edited by Turbota on

Comments

  • madmaxmadmax Posts: 12,438
    edited April 2004
    Why not short term CDs? Don't they have 90 and 180 day ones? I think if you pull out early you only loose the interest on the amount you pull out. I'm no money manager though.
    madmax
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  • PolkWannabiePolkWannabie Posts: 2,763
    edited April 2004
    Immediate access and no risk pretty well limits the possibilities.
  • TurbotaTurbota Posts: 255
    edited April 2004
    PolkWannabie ...

    That may be true, but there must be various no risk investments out there that won't tie the money up for a certain period of time, but pay better than 1.31% yearly ... Jeeze, that's nothing.

    Making 210 bucks a month (before taxes) in interest on $195,000 is nothing.

    I am no expert here. Just wondering if anyone here might know of something that pays at least maybe 3%. That ain't much, but it sure beats 1.31%

    Maybe I'm wrong .. Maybe 1.31% is all you can get on money right now if the money is not tied-up for a period of time, and has no risk.
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  • nadamsnadams Posts: 5,874
    edited April 2004
    I don't think you're going to find what you're looking for. I've had a savings account since I was born (my gram started one for each of us kids when we were born), but now that I'm 18 I'm going to close it out and put it all in a checking account. Sure, I won't get interest, but I'm barely getting anything on the savings account anyway.... It's just too low to even matter.

    Sorry _I_ don't have a better answer, but I'm no financial advisor, either. I'm just telling you what I see in my own accounts. I put $1000 in a 6mo CD once, and got about $15 out of it (as I recall it, anyway.... it might've been less). But then again, the more you put in and the longer for, the better rate you get. If you really have $195,000 layin around, you could probably spare $100,000 or even $50,000 and put it in a 1yr CD. Could do SOME good. I suggest going and talking to your local bank advisor.
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  • RuSsMaNRuSsMaN Posts: 17,995
    edited April 2004
    Look into Money Market accounts, and Mutual Funds. Forget CD's and Saving Accounts, you might as well put the money under your matress.

    I carry a good portion of my portfolio with Vanguard, but there are other good options as well.

    If you are looking for stocks, look at pharmacutical companies, certain retail establishments, and tech/energy.

    Another option, depending on your capital and credit - look into flipping some real estate, or setting up some rental property. Most all real estate appreciates, but at what rate is the key.

    Cheers,
    Russ
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  • PolkThugPolkThug Posts: 7,528
    edited April 2004
    Check with your bank and others for special savings accounts. There are a lot more options for you since you have 100k plus. A lot of accounts require a minimum 100k deposit. Just do a little searching on the Internet.

    Regards,
    PolkThug
  • PolkWannabiePolkWannabie Posts: 2,763
    edited April 2004
    Personally I never use CD's and I only use MM accounts for sweeping from investments. Assets sit in there varying lengths of time depending on market conditions but I generally look at interest bearing accounts as a safe place to put money between being invested in one thing and another.

    The immediate access criteria isn't the problem as there are loads of places to put money that provide immediate access, it's the no risk criteria which technically even banks don't really provide. Ask anyone who had money in the wrong S&L in the 80's.
  • PolkWannabiePolkWannabie Posts: 2,763
    edited April 2004
    Originally posted by RuSsMaN
    Look into ... Mutual Funds.
    Cheers,
    Russ
    Mutual Funds although a good investment vehicle, are providing less and less immediate access as MF managers are starting to ramp up on early redemption fees which can be quite costly.
  • Ron-PRon-P Spaceman Spiff Posts: 8,511
    edited April 2004
    I carry a good portion of my portfolio with Vanguard
    Ditto.
    If...
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  • EmlynEmlyn Posts: 2,213
    edited April 2004
    The link below shows quite a range of places to put money where it is somewhat liquid:

    Liquid Assets

    I'd suggest talking to a locally recommended financial advisor about your long term plans. Although 1.31 percent is actually a pretty good rate of return right now for no risk, a more diversified approach is usually a better way to go.

    Good thing you don't hide it under your mattress though! ;)
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  • I-SIGI-SIG Posts: 2,238
    edited April 2004
    Originally posted by Emlyn
    Good thing you don't hide it under your mattress though! ;)

    With that kind of bank, you could use the money for a matress! :D

    Wes
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  • TurbotaTurbota Posts: 255
    edited April 2004
    Thanks for the replies.

    Well, I just talked to USAA investments. I thought maybe an annuity would maybe work, but the majority of these annuities requires a 7 year commitment. If you cash out early, you pay some big fees.

    I have done real well in the stock market, but just don't want to get back into it with the current world situation now. In fact, I just retired from Fed civil service, so the stock market now is something I may not want to get back into.

    I can live good with my current retirement check and I don't need to skim money from the cash I have in the credit unions money market fund. I just am not happy with an almost nothing 1.31% annual rate.

    And I really don't want to tie the money up in some long range deal either.

    BTW, a 1 year CD is only paying 1.5% now (give or take pennies)

    Maybe I will just leave the cash where it is. Maybe use it on a new home.
    2-Channel Audio
    Onkyo ... A-9050 . . .Integrated Amp. (Power Amp Section not Used)
    Onkyo ... M-282 . ... Power Amps .(Pair)
    Onkyo ... C-7030 . _.CD Player
    Polk . . *. RTi A7 - ....Front Speakers
    Polk . . *. RTi A3 - ....Rear Speakers
  • PolkWannabiePolkWannabie Posts: 2,763
    edited April 2004
    Maybe we should invite Jimmy Carter back so we can have 20% rates.
  • TurbotaTurbota Posts: 255
    edited April 2004
    :D :D :D :D :D
    2-Channel Audio
    Onkyo ... A-9050 . . .Integrated Amp. (Power Amp Section not Used)
    Onkyo ... M-282 . ... Power Amps .(Pair)
    Onkyo ... C-7030 . _.CD Player
    Polk . . *. RTi A7 - ....Front Speakers
    Polk . . *. RTi A3 - ....Rear Speakers
  • I-SIGI-SIG Posts: 2,238
    edited April 2004
    Originally posted by Turbota
    Maybe I will just leave the cash where it is. Maybe use it on a new home.

    Come down here and give me some company in Tucson! Preferably on Trico Elec. Coop's system! (yes, I know, shameless plug)

    Wes
    Link: http://polkarmy.com/forums

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  • HBombTooHBombToo Posts: 5,335
    edited April 2004
    Investments in Audio equipment is key to great financial strenght...:confused:

    HBomb
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  • wallstreetwallstreet Posts: 1,405
    edited April 2004
    bonds. u should be able to get 5-6%. Especially since the bond market just took their pre interest rate hike killing over the last month.
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  • PolkWannabiePolkWannabie Posts: 2,763
    edited April 2004
    Yes I thought of that too ...

    But he did say NO risk, not low risk.
  • PabloPablo Posts: 732
    edited April 2004
    With NO risk and total liquidity, there really is no return. You may try some of the larger brokerage firms. Schwab has a "money market" fund that is totally liquid that pays a little more than the going rate (I'm not sure what it's doing now but I couple of years ago it was giving 7% when the going rate was 5.5%).

    I would really consider some short term bonds. If you don't see yourself using all that money in the next couple of years, why not drop a couple of bucks in something that pays better and may be tax free (I just got into a Purto Rico highway bond last fall that's paying 5.5% tax free for 3.5 years).

    Just my 2 cents (don't let anyone convince you what you should do with your money. you earned it, you do what you like with it [including a kicking home theater system!]).
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  • jdhdiggsjdhdiggs Posts: 4,471
    edited April 2004
    Originally posted by Pablo
    With NO risk and total liquidity, there really is no return.

    Totally agree 100%... This is also known as cash. Also, just FYI, if you are earning below inflation, you are losing money every year. Even at 3% you'd be losing money all just to incur 0 risk.

    What are you really looking for? Tradeoffs and the like?

    For websites, try msn money, cnn business, and clearstation.com

    If you do your homework and don't get too stressed out it is really pretty easy to make 7-8% and still remain failry liquid with minimal risk. 15% with average risk is also pretty easy...

    So some reasearch on the market, there are lots of tools to help minimize risk while still making decent money.
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  • burdetteburdette Posts: 1,205
    edited April 2004
    If you don't think you'll need the money right away.. and that is what you said... and you want relatively low risk (you said NO risk.. and only short-term government notes satifisfy that requirement) I'd consider putting at least part of it in relatively short-term bonds, such as tax-free munis.

    Others have suggested the stock market, and you may be able to get in and out relatively easily.. but that certainly isn't risk-free, or even low-risk, and if you need the money quickly, you'll have to sell and take what you get. THAT is the reason stocks are not a good choice when you may need the money on short notice.

    Your criteria of NO risk and an increased return quite simply is a violation of the risk-return trade-off. You find THAT investment and I think we'll ALL jump on it.

    I think your best bet is to portion the money out.. leave whatever you're comfortable with in an account similar to what you have so you can put your hands on it. Then look into some relatively short-term, low-risk investments for part.. maybe a fixed-income fund....
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  • TurbotaTurbota Posts: 255
    edited April 2004
    Thanks everyone for the input.

    I think I am just going to leave it in that poor paying money market accouint for now until I know a little more what the future has in store for me.

    I have a feeling interest rates may be going up again anyway.
    2-Channel Audio
    Onkyo ... A-9050 . . .Integrated Amp. (Power Amp Section not Used)
    Onkyo ... M-282 . ... Power Amps .(Pair)
    Onkyo ... C-7030 . _.CD Player
    Polk . . *. RTi A7 - ....Front Speakers
    Polk . . *. RTi A3 - ....Rear Speakers
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