Use it or lose it?
timeOday
far below current inflation, I am actually paying them to borrow my
money, and my balance is worth less and less each day.
Looking at Bankrate,
<http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33>
it appears the best money market account is still only about 3.6%
Meanwhile, inflation is 5.6%
<http://www.heraldtribune.com/article/20080822/COLUMNIST/808220325/2107/BUSINESS>
Is there some safe place to put my money where it will not shrink, and
still be available on a few weeks' notice?
Or should I just blow it on a vacation before inflation eats it away :)
AllEmailDeletedImmediately
"timeOday" <timeOda...@theknack.net> wrote in message
news:jcidnVYnruGiQjPV...@comcast.com...
start buying things you'll need that won't go bad.
Rod Speed
> The APY on my credit union savings account is only 1.51%. Since
> this is far below current inflation, I am actually paying them to borrow
> my money, and my balance is worth less and less each day.
> Looking at Bankrate,
> <http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33>
> it appears the best money market account is still only about 3.6%
> Meanwhile, inflation is 5.6%
> <http://www.heraldtribune.com/article/20080822/COLUMNIST/808220325/2107/BUSINESS>
> Is there some safe place to put my money where it will
> not shrink, and still be available on a few weeks' notice?
Some places do offer much better rates than that, like around 8%
That does involve foreign currency exchange risk tho.
> Or should I just blow it on a vacation before inflation eats it away
> :)
Probably not with the USD increasing in value currently, depending on
whether you are talking about a vacation inside or outside the country.
If you do have a mortgage, its best to have one that allows you to pay
off the mortgage at a faster rate and draw it down again as you need
to spend on something. That involves a substantial cost to change to
that sort of mortgage tho and you should have gone for one of those
when you got the mortgage in the first place.
SpammersDie
You could use it as seed money to start your own business in one of these
promising growth industries:
debt collector
skip tracer
repo man
foreclosure assistance
suicide counselor
bankruptcy attorney
payday lender (ok,maybe not this one.)
JR Weiss
>
>>Is there some safe place to put my money where it will not shrink, and
>>still be available on a few weeks' notice?
> Certain inverse (ET)funds, if carefully screened, continue to offer
> opportunities to profit and shall continue to do so as long as the stock
> market moves downward or even when indexes remain static. As long as
> that condition obtains, such funds maintain the same liquidity as any
> other ETF but, of course, become less so during a (significant) market
> rally.
You missed his key criteria: "will not shrink, and still be available on a few
weeks' notice?"
Most/all ETFs will incur a brokerage fee and further penalties if withdrawn
prior to 30-90 days. None have guaranteed returns.
> Leveraged funds, particularly certain so-called "short" ETFs, also
> have done quite well during this market downturn while others have, at
> the least, lost much less than the overall market as reflected in the
> indexes. Investing in these vehicles, though, is not for the
> faint-of-heart or for the inexperienced investor.
Again, they do not meet his 2 basic criteria.
JR Weiss
>
>> Is there some safe place to put my money where it will
>> not shrink, and still be available on a few weeks' notice?
> Some places do offer much better rates than that, like around 8%
Who offers 8% to a US investor on such an account?
clams_casino
When I had a mortgage and found myself with extra cash, I'd make extra
payments against the mortgage. I also had an open home equity line of
credit so if I needed money quickly, I could get it immediately at a
favorable, tax deductible rate. I rarely needed the equity money, so I
was able to place my extra cash into the mortgage, effectively saving
about 6% - better and safer than most any investment / minimizing money
in al ow interest savings account.
catalpa
"JR Weiss" <jrweiss98...@remove.comcast.net> wrote in message
news:3YSdnR6KbOXIuDLV...@comcast.com...
You left out the "That does involve foreign currency exchange risk tho."
Local currency short term interest rates are:
8.70% Mexico
8.00% New Zealand
7.25% Australia
5.00% Great Britain
4.30% Euro
3.00% Canada
2.00% USA
0.55% Japan
timeOday
Maybe that is the best idea. Fortunately the mortgage is my only debt.
It breaks the rule some advocate of keeping X weeks of income on hand as
emergency savings, but maybe that's better than losing the money for good?
timeOday
Yeah, it's not like I keep my retirement savings in a bank account - I
invest it. But that's so volatile it doesn't seem appropriate for money
that I want to be able to spend (if necessary) on a few weeks' notice.
In the 10 years since I got a "real job" and started investing for
retirement, the Dow and S&P500 have struggled to match pace with inflation:
<http://homepage.mac.com/ttsmyf>
<http://www.geocities.com/petegersb/SPX-InflationAdjusted.GIF>
I still invest, but I consider it to be a long-term undertaking. And
for that matter, there's no guarantee there will be a good return even
over the long run.
Considering the rapid increase in standard of living in China and India
over the last decade or so, and considering we do business with them, it
surprises me that the median US standard of living really hasn't
increased in a generation or so. Some things get better (e.g. invention
of the Internet) while others get worse (e.g. affordability of
beach-front property).
ChairMan
SpammersDie <x...@xx.xx>spewed forth:
I called the suicide hotline the other day and they asked me if I could
drive a truck or fly a plane.
JR Weiss
>> When I had a mortgage and found myself with extra cash, I'd make extra
>> payments against the mortgage. I also had an open home equity line of
>> credit so if I needed money quickly, I could get it immediately at a
>> favorable, tax deductible rate. I rarely needed the equity money, so I
>> was able to place my extra cash into the mortgage, effectively saving
>> about 6% - better and safer than most any investment / minimizing money
>> in al ow interest savings account.
> Maybe that is the best idea. Fortunately the mortgage is my only debt.
> It breaks the rule some advocate of keeping X weeks of income on hand as
> emergency savings, but maybe that's better than losing the money for good?
If it's for your emergency savings, a series of CDs that mature at 1- or 2-month
intervals will work nicely. I have a series of 6 12-month CDs. It takes a bit
of time to establish them, but then they can go on auto-pilot with renewable
CDs.
You can almost always find a bank with a relatively high teaser rate for new
deposits and/or 12-18 month CDs.
While you're working on that, paying down the mortgage is not a bad idea
either...
AllEmailDeletedImmediately
well, if real estate in your area is in a downward spiral, it just seems to
me that
you'd be hastening the loss of your money.
Lou
It's really worse than that - not only is the purchasing power shrinking,
but part of the interest is taxed away. There is no such thing as an
absolutely safe place to put your money. Even if you use your savings to
pay down your home mortgage (assuming you have one) the local real estate
market could take a downturn, effectively erasing the equity you accumulate
by paying off the debt.
Rod Speed
Almost everyone.
Rod Speed
Bullshit it hasnt, most obviously with the size of the houses
Its hardly surprising that its increased much more in China and India given the low base they started from.
> Some things get better (e.g. invention of the Internet)
And that is a hell of a lot better in those 10 years, most obviously with the move from dialup to broadband.
> while others get worse (e.g. affordability of beach-front property).
But the size of the non beach front property you can afford has improved considerably.
In spades in the last year.
Rod Speed
> clams_casino wrote:
>> timeOday wrote:
>>
>>> The APY on my credit union savings account is only 1.51%. Since
>>> this is far below current inflation, I am actually paying them to
>>> borrow my money, and my balance is worth less and less each day.
>>>
>>> Looking at Bankrate,
>>> <http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33>
>>>
>>> it appears the best money market account is still only about 3.6%
>>>
>>> Meanwhile, inflation is 5.6%
>>> <http://www.heraldtribune.com/article/20080822/COLUMNIST/808220325/2107/BUSINESS>
>>>
>>>
>>> Is there some safe place to put my money where it will not shrink,
>>> and still be available on a few weeks' notice?
>>>
>>> Or should I just blow it on a vacation before inflation eats it
>>> away :)
>>>
>>>
>>
>>
>> When I had a mortgage and found myself with extra cash, I'd make
>> extra payments against the mortgage. I also had an open home equity
>> line of credit so if I needed money quickly, I could get it
>> immediately at a favorable, tax deductible rate. I rarely needed
>> the equity money, so I was able to place my extra cash into the
>> mortgage, effectively saving about 6% - better and safer than most
>> any investment / minimizing money in al ow interest savings account.
> Maybe that is the best idea.
No maybe about it.
> Fortunately the mortgage is my only debt. It breaks the rule some
> advocate of keeping X weeks of income on hand as emergency savings,
Its a completely stupid rule when you have that type of mortgage.
> but maybe that's better than losing the money for good?
No maybe about it.
The only real time that you'd lose even more going that route is
with a recent new purchase at the top of the market where you
have seen the value of the property slashed in the last year or so.
Rod Speed
> "timeOday" <timeOda...@theknack.net> wrote...
>>> When I had a mortgage and found myself with extra cash, I'd make
>>> extra payments against the mortgage. I also had an open home
>>> equity line of credit so if I needed money quickly, I could get it
>>> immediately at a favorable, tax deductible rate. I rarely needed
>>> the equity money, so I was able to place my extra cash into the
>>> mortgage, effectively saving about 6% - better and safer than most
>>> any investment / minimizing money in al ow interest savings
>>> account.
>
>> Maybe that is the best idea. Fortunately the mortgage is my only
>> debt. It breaks the rule some advocate of keeping X weeks of income
>> on hand as emergency savings, but maybe that's better than losing
>> the money for good?
>
> If it's for your emergency savings, a series of CDs that mature at 1-
> or 2-month intervals will work nicely. I have a series of 6 12-month
> CDs. It takes a bit of time to establish them, but then they can go
> on auto-pilot with renewable CDs.
The home equity loan makes a lot more sense, essentially because
the return is much better than on the CDs and its tax favored too.
> You can almost always find a bank with a relatively high teaser rate for new deposits and/or 12-18 month CDs.
But you could end up with a problem going that route if the bank goes bust.
Your money is fidc guaranteed, but you may not be able to get it
back quickly if you say get sacked just before the bank goes under.
> While you're working on that, paying down the mortgage is not a bad idea either...
Its the best idea return on the money wise.
Rod Speed
> "timeOday" <timeOda...@theknack.net> wrote in message
> news:jcidnVYnruGiQjPV...@comcast.com...
>> The APY on my credit union savings account is only 1.51%. Since
>> this is far below current inflation, I am actually paying them to
>> borrow my money, and my balance is worth less and less each day.
>>
>> Looking at Bankrate,
>>
> <http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&produc
> t=33>
>> it appears the best money market account is still only about 3.6%
>>
>> Meanwhile, inflation is 5.6%
>>
> <http://www.heraldtribune.com/article/20080822/COLUMNIST/808220325/2107/BUSI
> NESS>
>>
>> Is there some safe place to put my money where it will not shrink,
>> and still be available on a few weeks' notice?
>>
>> Or should I just blow it on a vacation before inflation eats it away
>> :)
> It's really worse than that - not only is the purchasing power
> shrinking, but part of the interest is taxed away. There is no
> such thing as an absolutely safe place to put your money.
Yes there is, in a fidc guaranteed account. Lousy return tho.
> Even if you use your savings to pay down your home mortgage (assuming
> you have one) the local real estate market could take a downturn, effectively
> erasing the equity you accumulate by paying off the debt.
Thats only relevant if you are forced to sell it.
And if you have had the mortgage for quite a while, you
wont be upside down currently unless its interest only etc.
JR Weiss
>
>> If it's for your emergency savings, a series of CDs that mature at 1-
>> or 2-month intervals will work nicely. I have a series of 6 12-month
>> CDs. It takes a bit of time to establish them, but then they can go
>> on auto-pilot with renewable CDs.
>
> The home equity loan makes a lot more sense, essentially because
> the return is much better than on the CDs and its tax favored too.
An HE loan makes no sense at all. An HE Line of Credit is an idea that has
merit, but only in limited cases.
>> You can almost always find a bank with a relatively high teaser rate for new
>> deposits and/or 12-18 month CDs.
>
> But you could end up with a problem going that route if the bank goes bust.
>
> Your money is fidc guaranteed, but you may not be able to get it
> back quickly if you say get sacked just before the bank goes under.
To the $100K per bank FDIC limit, the money will ALWAYS be available within the
OP's "few weeks" criteria.
It is certainly safer than taking out a HE loan or drawing on a HELOC after
you're sacked! Not only do you increase your debt load, but you also have no
money with which to pay the mortgage!
JR Weiss
>>>> Is there some safe place to put my money where it will
>>>> not shrink, and still be available on a few weeks' notice?
>>
>>> Some places do offer much better rates than that, like around 8%
>>
>> Who offers 8% to a US investor on such an account?
>
> Almost everyone.
Here we go again... More total garbage...
JR Weiss
>> Fortunately the mortgage is my only debt. It breaks the rule some
>> advocate of keeping X weeks of income on hand as emergency savings,
>
> Its a completely stupid rule when you have that type of mortgage.
And what "type" is that? Since the OP didn't say what type mortgage he has,
your response is totally baseless and worthless.
clams_casino
Keeping X weeks is probably best if one has no equity, but I always
figured my equity could be tapped if I ever needed it. Consequently, I
barely kept a few weeks quick cash & kept paying down mortgage. Even if
I needed to borrow against that equity, it would have been greater (and
safer) than if I was to save it elsewhere. Of course, that excess
equity should only be tapped if / when absolutely needed.
Rod Speed
>>>>> Is there some safe place to put my money where it will
>>>>> not shrink, and still be available on a few weeks' notice?
>>>> Some places do offer much better rates than that, like around 8%
>>> Who offers 8% to a US investor on such an account?
>> Almost everyone.
> Here we go again...
Just how many of you are there between those ears, child ?
> More total garbage...
Your sig is supposed to have -- on a line by itself in front of it, child.
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>>> If it's for your emergency savings, a series of CDs that mature at 1- or 2-month intervals will work nicely. I have
>>> a series of 6 12-month CDs. It takes a bit of time to establish them, but then they can go
>>> on auto-pilot with renewable CDs.
>> The home equity loan makes a lot more sense, essentially because
>> the return is much better than on the CDs and its tax favored too.
> An HE loan makes no sense at all. An HE Line of Credit
Same thing, different words.
> is an idea that has merit, but only in limited cases.
What was being discussed was the situation he listed. Its fine for that.
>>> You can almost always find a bank with a relatively high teaser rate for new deposits and/or 12-18 month CDs.
>> But you could end up with a problem going that route if the bank goes bust.
>> Your money is fidc guaranteed, but you may not be able to get it
>> back quickly if you say get sacked just before the bank goes under.
> To the $100K per bank FDIC limit, the money will ALWAYS be available within the OP's "few weeks" criteria.
Wrong, as always. It can be longer than that.
> It is certainly safer than taking out a HE loan or drawing on a HELOC after you're sacked!
The first wasnt even proposed, fool.
> Not only do you increase your debt load, but you also have no money with which to pay the mortgage!
Wrong, as always. You just pay it using the line of credit, fuckwit.
Rod Speed
>>>>> The APY on my credit union savings account is only 1.51%. Since this is far below current inflation, I am
>>>>> actually paying them to borrow my money, and my balance is worth less and less each day.
>>>>> Looking at Bankrate,
>>>>> <http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33>
>>>>> it appears the best money market account is still only about 3.6%
>>>>> Meanwhile, inflation is 5.6%
>>>>> <http://www.heraldtribune.com/article/20080822/COLUMNIST/808220325/2107/BUSINESS>
>>>>> Is there some safe place to put my money where it will not shrink,
>>>>> and still be available on a few weeks' notice?
>>>>> Or should I just blow it on a vacation before inflation eats it away :)
>>>> When I had a mortgage and found myself with extra cash, I'd make
>>>> extra payments against the mortgage. I also had an open home equity
>>>> line of credit so if I needed money quickly, I could get it
>>>> immediately at a favorable, tax deductible rate. I rarely needed
>>>> the equity money, so I was able to place my extra cash into the
>>>> mortgage, effectively saving about 6% - better and safer than most
>>>> any investment / minimizing money in al ow interest savings account.
>>> Maybe that is the best idea.
>> No maybe about it.
>>> Fortunately the mortgage is my only debt. It breaks the rule some
>>> advocate of keeping X weeks of income on hand as emergency savings,
>> Its a completely stupid rule when you have that type of mortgage.
> And what "type" is that?
A HELOC, fuckwit.
> Since the OP didn't say what type mortgage he has,
That wasnt being discussed. What was being discussed was whether
there is any point in 'emergency savings' if you have a HELOC, fuckwit.
> your response is totally baseless and worthless.
Never ever could bullshit and lie its way out of a wet paper bag.
JR Weiss
> A HELOC, fuckwit.
> That wasnt being discussed. What was being discussed was whether
Yet again, rodless admits total cluelessness by resorting to insult and
profanity...
JR Weiss
>> An HE loan makes no sense at all. An HE Line of Credit
>
> Same thing, different words.
Nope. Different terms, different criteria, different rules...
>> is an idea that has merit, but only in limited cases.
>
> What was being discussed was the situation he listed. Its fine for that.
Nope. You have no idea how much the OP owes or how much he has saved. You have
no idea whether it would be even SANE for him, much less "fine"!
>> To the $100K per bank FDIC limit, the money will ALWAYS be available within
>> the OP's "few weeks" criteria.
>
> Wrong, as always. It can be longer than that.
Hasn't been, in recent history.
>> It is certainly safer than taking out a HE loan or drawing on a HELOC after
>> you're sacked!
>
> The first wasnt even proposed, fool.
That's EXACTLY the result of your "fine for that" proposal!
>> Not only do you increase your debt load, but you also have no money with
>> which to pay the mortgage!
>
> Wrong, as always. You just pay it using the line of credit, fuckwit.
I don't doubt that you can't see the insanity of attempting to pay off your
mortgage loan with money borrowed from your other mortgage loan... You deplete
the HE loan (i.e., second mortgage) money attempting to pay the mortgage, then
lose the house because you can't pay the HE mortgage!
Rod Speed
>>> is an idea that has merit, but only in limited cases.
>> What was being discussed was the situation he listed. Its fine for that.
> Nope.
Yep.
> You have no idea how much the OP owes
I do know that the only debt he has is the mortgage, fuckwit.
> or how much he has saved.
Thats completely irrelevant to whether it makes sense to pay down the
mortgage when he can get it back any time he wants from the HELOC.
> You have no idea whether it would be even SANE for him, much less "fine"!
Wrong, as always.
>>> To the $100K per bank FDIC limit, the money will ALWAYS be available within the OP's "few weeks" criteria.
>> Wrong, as always. It can be longer than that.
> Hasn't been, in recent history.
Recent history is completely irrelevant. We havent seen
the current rate of banks going bust in recent history either.
What matters is what the FDIC can do time wise if the shit does hit the fan very spectacularly indeed.
>>> It is certainly safer than taking out a HE loan or drawing on a HELOC after you're sacked!
>> The first wasnt even proposed, fool.
> That's EXACTLY the result of your "fine for that" proposal!
Wrong. No HE loan was ever mentioned, fuckwit.
>>> Not only do you increase your debt load, but you also have no money with which to pay the mortgage!
>> Wrong, as always. You just pay it using the line of credit, fuckwit.
> I don't doubt that you can't see the insanity of attempting to pay off your mortgage loan with money borrowed from
> your other mortgage loan...
There is just one mortgage, fuckwit.
> You deplete the HE loan (i.e., second mortgage)
That was never ever mentioned, fuckwit.
> money attempting to pay the mortgage, then lose the house because you can't pay the HE mortgage!
Thanks for that completely superfluous proof that you dont have a fucking
clue about what was actually being discussed, or anything else at all, either.
Rod Speed
JR Weiss <jrweis...@comcast.net> desperately attempted to bullshit and
lie its way out of its predicament and fooled absolutely no one at all, as always.
George
>
> Considering the rapid increase in standard of living in China and India
> over the last decade or so, and considering we do business with them, it
> surprises me that the median US standard of living really hasn't
> increased in a generation or so. Some things get better (e.g. invention
> of the Internet) while others get worse (e.g. affordability of
> beach-front property).
>
Why would it? Consider that China is doing things we used to do and
thats why their standard of living increased.
Previously we had lots of good paying manufacturing jobs which enabled a
true middle class.
timeOday
I currently have about 9 or 10 years left on a 15 year fixed, and no HELOC.
JR Weiss
>
>>Most/all ETFs will incur a brokerage fee and further penalties if withdrawn
>>prior to 30-90 days. None have guaranteed returns.
> Excuse me? What did I miss? "ET" = secondary market.... In truth,
> almost nothing has "guaranteed" returns; that term is simply a sales
> pitch.
Correct. "ETF" simply stands for Exchange Traded Fund. AFAIK, there is not one
that can legally claim guaranteed returns, even in a "sales pitch.".
> Although not my cup of tea and it's run may be over, based on
> market price a/o close of business 8/22, at $105.12, Proshares'
> Ultrashort Msci Eafe (EFU ) is up nearly 44% YTD. Tradeking's ETF
> commission is an exhorbitant $4.95....
As always, you take market risk when you invest in the stock market. While the
OP might choose a fund or security that gains 44% over 8 months, he could well
choose one that declines the same amount. For anyone who wants money available
within "a few weeks," an ETF is not a normal candidate because of significant
withdrawal penalties in the first 30-90 days in addition to any brokerage
commissions.
An ETF may well be a good choice for a medium- to long-term investment. It just
isn't suitable as an "emergency savings" vehicle where the money has to be
"safe" (another relative term) and immediately available.
> I did not infer OP to be an "old woman": As I see it, beyond the
> tax advantages of an IRA (for which "short" funds qualify) AWA a few
> laddered CDs during dry times (certainly nothing longer than 12-18
> months) the notion of "sticking" cash into a vault or a long-term
> fixed-rate instrument and hoping for the best is ludicrous when, if a
> person would spend a fraction of his NFL-watching time actually
> _managing_ his money, including investing whatever fees he may be paying
> to some "financial planner" quack, he could actually make money in good
> times or bad. Sure, most of those buy-and-holders who're losing their
> asses will eventually regain their losses but odds are they'll be dead
> by the time that happens.
We have no idea what the OP's current investment position is. While he says his
only debt is his mortgage, we do not know the positions or magnitudes of his
current investments. His criteria to us were "safe" and available "in a few
weeks." To me, that describes the emergency savings portion of his total
investments, not his long-term equity and hedge holdings. He should select the
savings vehicle accordingly.
JR Weiss
>
> I currently have about 9 or 10 years left on a 15 year fixed, and no HELOC.
That's a good position to be in, as long as it is affordable (both principal and
interest rate). You are now in the period where a significant portion of your
payment goes to principal, so additional payments won't have quite the same
level of beneficial effect they would have had at the beginning.
If you have no other savings, a HELOC is NOT what you would want to have to rely
on if you lost your job -- it could well lead to losing your house as well!
A crusty CPA once told me, "What's more important than the return ON your
investment is the return OF your investment." That's a good rule for your
"emergency savings" account. You may not get more than 4.5% on a bank CD right
now, but it's better than 1.5% and just as safe as a deposit account. Your
principal won't "dwindle to nothing," either. If your mortgage is less than
about 6% APR and you are able to take advantage of its tax deductibility, you
would be better off building your emergency savings account than paying down the
mortgage. If you have lots of excess cash flow, do some of each!
clams_casino
>"timeOday" <timeOda...@theknack.net> wrote...
>
>
>>I currently have about 9 or 10 years left on a 15 year fixed, and no HELOC.
>>
>>
>
>That's a good position to be in, as long as it is affordable (both principal and
>interest rate). You are now in the period where a significant portion of your
>payment goes to principal, so additional payments won't have quite the same
>level of beneficial effect they would have had at the beginning.
>
>If you have no other savings, a HELOC is NOT what you would want to have to rely
>on if you lost your job -- it could well lead to losing your house as well!
>
>
True, but if you were to gradually pay down $10k against your mortgage,
you'll have much more equity to borrow than if you put $10K in a taxable
savings account.
Bottom line is you can potentially lose that house faster when you
savings run dry sooner.
>A crusty CPA once told me, "What's more important than the return ON your
>investment is the return OF your investment." That's a good rule for your
>"emergency savings" account. You may not get more than 4.5% on a bank CD right
>now, but it's better than 1.5% and just as safe as a deposit account.
>
4.5% on a CD cashable within a few weeks notice? Any examples?
> Your
>principal won't "dwindle to nothing," either. If your mortgage is less than
>about 6% APR and you are able to take advantage of its tax deductibility, you
>would be better off building your emergency savings account than paying down the
>mortgage.
>
Your math escapes me. I haven't seen a short term CD that has a higher
interest rate than a typical mortgage in some 25 years.
Any examples of 6% CDs that can be cashed within a few weeks notice?
Rod Speed
The real middle class never ever was involved in manufacturing jobs.
Rod Speed
You dont know that he has any except that cash he is looking for a decent return on.
In fact his 'where to put my money' implys that thats all he has.
> His criteria to us were "safe" and available "in a few weeks." To me, that describes the emergency savings portion of
> his total investments, not his long-term equity and hedge holdings.
More fool you. If anything the words he used implys the opposite.
> He should select the savings vehicle accordingly.
And paying down his mortgage if its a HELOC is STILL going to produce the best after tax return.
Rod Speed
>> I currently have about 9 or 10 years left on a 15 year fixed, and no HELOC.
> That's a good position to be in, as long as it is affordable (both principal and interest rate). You are now in the
> period where a significant portion of your payment goes to principal, so additional payments won't have quite the same
> level of beneficial effect they would have had at the beginning.
> If you have no other savings, a HELOC is NOT what you would want to have to rely on if you lost your job
Wrong. Its still a lot better than having an emergency fund
that returns the sort of dismal rate of return that he listed.
Particularly if you are the sort of indivual that can always get another job
if you lose the first one, even if its not the most ideal job. All you are
covering is the short time between jobs and the HELOC will do that fine.
> -- it could well lead to losing your house as well!
Thanks for that completely superfluous proof that you have
never ever had a fucking clue about anything at all, ever.
Consider the situation where the mortgage is already a HELOC.
You have a wad of cash that you dont like the return you are currently getting, his situation.
You use that case to pay down the mortgage.
If you do lose your job, you just draw down the mortgage by the amount of cash that
you were considering where to put, and you are much better off than you had been
if you had put that wad of cash anywhere else with anything like the same security.
There is no more risk of losing the house than if you had put that wad of cash in say a series
of CDs and in fact are at less risk of losing the house than you would have been with the CDs
because you have earned rather more on that wad of cash than you would have done with the CDs.
> A crusty CPA once told me, "What's more important than the return ON your investment is the return OF your
> investment." That's a good rule for your "emergency savings" account.
Only a fool has an emergency saving account if they have a HELOC mortgage.
You qualify.
> You may not get more than 4.5% on a bank CD right now, but it's better than 1.5% and just as safe as a deposit
> account.
And the HELOC mortgage provides a better return
again, particularly when tax is included in the calculation.
> Your principal won't "dwindle to nothing," either. If your mortgage is less than about 6% APR and you are able to
> take advantage of its tax deductibility, you would be better off building your emergency savings account than paying
> down the mortgage.
Wrong, as always.
> If you have lots of excess cash flow, do some of each!
Or tell fools like you that you dont have a clue.
JR Weiss
>
> 4.5% on a CD cashable within a few weeks notice? Any examples?
WAMU in Seattle has 4.51% on 12-18 mo CDs (as of last week; they change every
Friday). In the context of building a series of staggered CDs like the 2-month
stagger I talked about the other day, he can get to that point gradually.
>> Your principal won't "dwindle to nothing," either. If your mortgage is less
>> than about 6% APR and you are able to take advantage of its tax
>> deductibility, you would be better off building your emergency savings
>> account than paying down the mortgage.
>
> Your math escapes me. I haven't seen a short term CD that has a higher
> interest rate than a typical mortgage in some 25 years.
Rough numbers... At a 25% marginal tax rate, a 6% mortgage really "costs" 4.5%.
Since we don't know what his mortgage rate is now, we don't know what his "cost"
of putting $$ into savings vs mortgage paydown is. Also, since we don't know
his cash flow or current savings, we can only make rough guesses.
Since he's had the mortgage 5-6 years, it could be at virtually any rate from
4-9%, depending on his creditworthiness at the time he took it out. The 6%
threshold is merely a point, given some rough assumptions, that paying down the
mortgage could be seen to be more advantageous than putting the $$ in savings.
JR Weiss
>
>> We have no idea what the OP's current investment position is. While he says
>> his only debt is his mortgage, we do not know the positions or magnitudes of
>> his current investments.
>
> You dont know that he has any except that cash he is looking for a decent
> return on.
>
> In fact his 'where to put my money' implys that thats all he has.
Nope. We have NO idea of the size of his mortgage or of the money he is looking
to place. Whatever that amount is, it could well be in addition to retirement
accounts such as IRAs and/or 401Ks, and possibly in addition to some long-term
investments he considers "untouchable." Without his input, we can make no safe
assumptions on those amounts (or lack of).
>> He should select the savings vehicle accordingly.
>
> And paying down his mortgage if its a HELOC is STILL going to produce the best
> after tax return.
He has no HELOC now. We have no idea whether he qualifies for a HELOC now, or
whether he would qualify for an amount equal to what he wants to "save." We
have no idea where he lives (other than in the US, which was part of one of the
URLs he initially posted), so we have no idea as to whether he can pay down his
mortgage enough to get a HELOC in the amount he would want. We have no idea of
his credit rating, so we don't know if he would get a HELOC at a reasonable rate
even if he met the standard 80% loan-equity criteria.
Paying down the mortgage rate will REDUCE his interest deductibility and REDUCE
the interest gotten on the $$ from the current 1.5% to 0! How is that going to
give a better after-tax return?!?
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>>> We have no idea what the OP's current investment position is. While he says his only debt is his mortgage, we do not
>>> know the positions or magnitudes of his current investments.
>> You dont know that he has any except that cash he is looking for a decent return on.
>> In fact his 'where to put my money' implys that thats all he has.
> Nope.
Yep.
> We have NO idea of the size of his mortgage
Irrelevant to his CURRENT INVESTMENTS.
> or of the money he is looking to place.
Irrelevant to his CURRENT INVESTMENTS.
> Whatever that amount is, it could well be in addition to retirement accounts such as IRAs and/or 401Ks, and possibly
> in addition to some long-term investments he considers "untouchable."
Pure speculation on your part.
> Without his input, we can make no safe assumptions on those amounts (or lack of).
Thats irrelevant to how to get a decent return on that cash he wants to get a decent return on.
>>> He should select the savings vehicle accordingly.
>> And paying down his mortgage if its a HELOC is STILL going to produce the best after tax return.
> He has no HELOC now.
Never said he did. The word IF is there for a reason.
> We have no idea whether he qualifies for a HELOC now,
Never said he did. The word IF is there for a reason.
> or whether he would qualify for an amount equal to what he wants to "save."
Never said he did. The word IF is there for a reason.
> We have no idea where he lives (other than in the US, which was part of one of the URLs he initially posted), so we
> have no idea as to whether he can pay down his mortgage enough to get a HELOC in the amount he would want.
Never said he did. The word IF is there for a reason.
> We have no idea of his credit rating, so we don't know if he would get a HELOC at a reasonable rate even if he met the
> standard 80% loan-equity criteria.
Never said he did. The word IF is there for a reason.
> Paying down the mortgage rate will REDUCE his interest deductibility
> and REDUCE the interest gotten on the $$ from the current 1.5% to 0! How is that going to give a better after-tax
> return?!?
Because he wouldnt have to pay tax on the interest he gets on that money when
its not used to pay down the mortgage when its put in say a series of CDs instead.
Rod Speed
> clams_casino <PeterG...@DrunkinClam.com> wrote
>> 4.5% on a CD cashable within a few weeks notice? Any examples?
> WAMU in Seattle has 4.51% on 12-18 mo CDs (as of last week; they change every Friday). In the context of building a
> series of staggered CDs like the 2-month stagger I talked about the other day, he can get to that point gradually.
And plenty of accounts outside the country pay 8%, even
in countrys which are quite a safe place to put your money.
Main downside is the added foreign currency conversion rate risk but
thats unlikely to anything like wipe out that dramatic difference in return.
>>> Your principal won't "dwindle to nothing," either. If your mortgage is less than about 6% APR and you are able to
>>> take advantage of its tax deductibility, you would be better off building your emergency savings account than paying
>>> down the mortgage.
Thanks for that completely superfluous proof that you dont have a clue about the basics.
>> Your math escapes me.
And everyone else with a clue too.
>> I haven't seen a short term CD that has a higher interest rate than a typical mortgage in some 25 years.
> Rough numbers... At a 25% marginal tax rate, a 6% mortgage really "costs" 4.5%.
Pity that the after tax return on those CDs you listed at the top really 'pay' 3.4%.
> Since we don't know what his mortgage rate is now, we don't know what his "cost" of putting $$ into savings vs
> mortgage paydown is. Also, since we don't know his cash flow or current savings, we can only make rough guesses.
> Since he's had the mortgage 5-6 years, it could be at virtually any rate from 4-9%, depending on his creditworthiness
> at the time he took it out. The 6% threshold is merely a point, given some rough assumptions, that paying down the
> mortgage could be seen to be more advantageous than putting the $$ in savings.
On the other hand, it is clear that paying down the mortgage would
normally give a better return on the cash than any alternative except
one of those higher interest CDs outside the country and does avoid
the added foreign currency rate risk.
The main problem with paying down the mortgage is that he
doesnt currently have a HELOC mortgage and it may well cost
more than the savings would be to move to one of those now.
The Real Bev
Certainly not actually having to TOUCH the machinery itself, but they
might have started out that way.
Nobody ever actually defines "the middle class" or "the rich". It's way
easier to despise and wish to soak The Rich when you don't know that
you're one of them.
--
Cheers, Bev
==========================================================
"It's no piece of cake, but it sure beats listening to Ted
Kennedy on the Senate floor."
- Jesse Helms describing heart surgery
Rod Speed
> Rod Speed wrote
>> George <geo...@nospam.invalid> wrote
>>> timeOday wrote
>>>> Considering the rapid increase in standard of living in China and
>>>> India over the last decade or so, and considering we do business
>>>> with them, it surprises me that the median US standard of living
>>>> really hasn't increased in a generation or so. Some things get
>>>> better (e.g. invention of the Internet) while others get worse
>>>> (e.g. affordability of beach-front property).
>>> Why would it? Consider that China is doing things we used to do and thats why their standard of living increased.
>>> Previously we had lots of good paying manufacturing jobs which enabled a true middle class.
>> The real middle class never ever was involved in manufacturing jobs.
> Certainly not actually having to TOUCH the machinery itself,
Yep, thats nothing like the real middle class.
> but they might have started out that way.
Hardly ever.
> Nobody ever actually defines "the middle class" or "the rich".
Because it isnt really possible to define it. But you never
get the middle class involved in collecting the garbage,
doing the plumbing, working in a factory, or cleaning either.
> It's way easier to despise and wish to soak The Rich when you don't know that you're one of them.
None of the rich ever want the rich to soaked and they certainly know if they are rich or not.
AllEmailDeletedImmediately
"The Real Bev" <bashley1...@gmail.com> wrote in message
news:PG2sk.15082$Is1....@newsfe04.iad...
> Rod Speed wrote:
>
>> George <geo...@nospam.invalid> wrote:
>>> timeOday wrote:
>>>>
>>>> Considering the rapid increase in standard of living in China and
>>>> India over the last decade or so, and considering we do business
>>>> with them, it surprises me that the median US standard of living
>>>> really hasn't increased in a generation or so. Some things get
>>>> better (e.g. invention of the Internet) while others get worse (e.g.
>>>> affordability of beach-front property).
>>>>
>>> Why would it? Consider that China is doing things we used to do and
>>> thats why their standard of living increased.
>>>
>>> Previously we had lots of good paying manufacturing jobs which
>>> enabled a true middle class.
>>
>> The real middle class never ever was involved in manufacturing jobs.
>
> Certainly not actually having to TOUCH the machinery itself, but they
> might have started out that way.
>
> Nobody ever actually defines "the middle class" or "the rich". It's way
> easier to despise and wish to soak The Rich when you don't know that
> you're one of them.
it's divided into quintiles. the rich, the poor and the 3 quints in the
middle:
upper middle class, middle class, lower middle class. i don't know where
the lines are drawn.
The Real Bev
> The Real Bev <bashley1...@gmail.com> wrote
>
>> Nobody ever actually defines "the middle class" or "the rich".
>
> Because it isnt really possible to define it. But you never get the
> middle class involved in collecting the garbage, doing the plumbing,
> working in a factory, or cleaning either.
>
>> It's way easier to despise and wish to soak The Rich when you don't
>> know that you're one of them.
>
> None of the rich ever want the rich to soaked and they certainly know
> if they are rich or not.
In the US, when politicians talk about "the rich" they mean something
like a family earning $75K. I'm pretty sure that working people earning
$75K don't know they're "rich". Sorry, I can't give you a cite because
it's something I read over a year ago.
--
Cheers,
Bev
+++++++++++++++++++++++++++++++++++++++++++++++++++++
"Rats cry when they hear about my life." -- Dilbert
Rod Speed
> Rod Speed wrote
>> The Real Bev <bashley1...@gmail.com> wrote
>>> Nobody ever actually defines "the middle class" or "the rich".
>> Because it isnt really possible to define it. But you never get the middle class involved in collecting the garbage,
>> doing the plumbing, working in a factory, or cleaning either.
>>> It's way easier to despise and wish to soak The Rich when you don't know that you're one of them.
>> None of the rich ever want the rich to soaked and they certainly know if they are rich or not.
> In the US, when politicians talk about "the rich" they mean something like a family earning $75K.
Thats nothing like rich and includes hordes of professionals, in spades when there is more than one income.
> I'm pretty sure that working people earning $75K don't know they're "rich".
Yes, but thats nothing like 'the rich'
> Sorry, I can't give you a cite because it's something I read over a year ago.
I doubt its even what the politicians call 'the rich' and if it is, they are just plain wrong.
George
> Rod Speed wrote:
>
>> George <geo...@nospam.invalid> wrote:
>>> timeOday wrote:
>>>>
>>>> Considering the rapid increase in standard of living in China and
>>>> India over the last decade or so, and considering we do business
>>>> with them, it surprises me that the median US standard of living
>>>> really hasn't increased in a generation or so. Some things get
>>>> better (e.g. invention of the Internet) while others get worse (e.g.
>>>> affordability of beach-front property).
>>>>
>>> Why would it? Consider that China is doing things we used to do and
>>> thats why their standard of living increased.
>>>
>>> Previously we had lots of good paying manufacturing jobs which
>>> enabled a true middle class.
>>
>> The real middle class never ever was involved in manufacturing jobs.
>
> Certainly not actually having to TOUCH the machinery itself, but they
> might have started out that way.
Sure they can. I don't remember the exact numbers but there are distinct
statistical groups. The poor are below whatever the poverty line is.
Then the middle class is divided into lower/middle/upper and then there
are the rich.
Until recently many folks who worked in factories were the middle class.
>
> Nobody ever actually defines "the middle class" or "the rich". It's way
> easier to despise and wish to soak The Rich when you don't know that
> you're one of them.
>
Not sure why you are reading that into what I said. This is the first
time in the US where a child will likely statistically do worse than
their parents. From what it sounds like you are retired, you have yours
and you don't particularly care but that doesn't mean the conditions I
described aren't outside your window.
George
> menial industrial tasks, people need to be trained and or educated in
> order to make it in our society. People like you who are having
> trouble with that reality are akin to the luddites who bemoaned the
> industrial revolution.
> the moral to the story is keep up or get left behind
>
> for the original poster, the standard of living in the US has jumped
> by leaps and bounds over the last 50 years, wake up and look around,
> more people have a much better lifestyle than ever before, the same
> moral holds true for people who think like you
> __________________________________________
> Never argue with an idiot.
> They'll drag you down to their level and beat you with experience.
Good job, you repeated what Rush told you to say without applying any
critical thinking and then made yourself look even sillier by delivering
an ad hominem attack.
AllEmailDeletedImmediately
"The Real Bev" <bashley1...@gmail.com> wrote in message
news:aq4sk.7058$4s1...@newsfe06.iad...
> Rod Speed wrote:
>
>> The Real Bev <bashley1...@gmail.com> wrote
>>
>>> Nobody ever actually defines "the middle class" or "the rich".
>>
>> Because it isnt really possible to define it. But you never get the
>> middle class involved in collecting the garbage, doing the plumbing,
>> working in a factory, or cleaning either.
>>
>>> It's way easier to despise and wish to soak The Rich when you don't
>>> know that you're one of them.
>>
>> None of the rich ever want the rich to soaked and they certainly know
>> if they are rich or not.
>
> In the US, when politicians talk about "the rich" they mean something like
> a family earning $75K. I'm pretty sure that working people earning $75K
> don't know they're "rich". Sorry, I can't give you a cite because it's
> something I read over a year ago.
i've read 50k
Rod Speed
> The Real Bev wrote
>> Rod Speed wrote
>>> George <geo...@nospam.invalid> wrote
>>>> timeOday wrote
>>>>> Considering the rapid increase in standard of living in China and
>>>>> India over the last decade or so, and considering we do business
>>>>> with them, it surprises me that the median US standard of living
>>>>> really hasn't increased in a generation or so. Some things get
>>>>> better (e.g. invention of the Internet) while others get worse
>>>>> (e.g. affordability of beach-front property).
>>>> Why would it? Consider that China is doing things we used to do and thats why their standard of living increased.
>>>> Previously we had lots of good paying manufacturing jobs which
>>>> enabled a true middle class.
>>> The real middle class never ever was involved in manufacturing jobs.
>> Certainly not actually having to TOUCH the machinery itself, but they might have started out that way.
> Sure they can.
Sure they can what ?
> I don't remember the exact numbers but there are distinct statistical groups.
Different matter entirely to what is being discussed.
> The poor are below whatever the poverty line is.
It aint that black and white either, essentially because 'the poverty line' is a very wooly concept.
> Then the middle class is divided into lower/middle/upper and then there are the rich.
You've forgotten the working class.
> Until recently many folks who worked in factories were the middle class.
Like hell they were. They were the working class.
>> Nobody ever actually defines "the middle class" or "the rich". It's way easier to despise and wish to soak The Rich
>> when you don't know that you're one of them.
> Not sure why you are reading that into what I said.
She isnt, we've moved on from what you said a bit to discussing just who 'the rich' are.
> This is the first time in the US where a child will likely statistically do worse than their parents.
Thats just plain wrong too, most obviously with the size of the houses and what they drive.
> From what it sounds like you are retired, you have yours and you don't particularly care but that doesn't mean the
> conditions I described aren't outside your window.
Easy to claim. Hell of a lot harder to actually substantiate that claim.
clams_casino
50k is the median US household income.
AllEmailDeletedImmediately
"clams_casino" <PeterG...@DrunkinClam.com> wrote in message
news:T0ksk.6855$Jk1....@newsfe01.iad...
that may be so, but i've read that you're considered rich at 50k