Where do you put your cash?

tosugrad

tosugrad

Legendary Member
Joined
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MN
Im talking about emergency savings and some short to mid term holdings. Under the $100k FDIC limit.

Im sick of my MMA making 3.5%. CDs are not much better at maybe 4-4.5%.

Anyone have a safe place thats mostly liquid?

NOTE: Lets see who comes up with the first "duh, under my mattress" response :rolleyes:
 
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I think this is a difficult question to answer because it depends on many individual things. How liquid? How much? Risk tolerance? You might be thinking about $50K and it might be $5K for me. You may want access in 3 months and it might be immediate for me, or three business days for you. Your risk tolerance might be low and mine could be high. If I need cash I can call my money manager and they will wire funds to my account and I'll have it the same day. Now if I need emergendy funds today, on a holiday, I would be out of luck. So, I have established a line of credit with my bank. If I need it today, say to make bail, I could access it now and get out of jail. :biggrin:
 
osugrad97 said:
Anyone have a safe place thats mostly liquid?
Click to expand...

Short answer is "no". "Safe" and "Liquid" are usually mutually exclusive with the higher returns you're looking for.

I don't keep the usually recommended three-, six-, or whatever-month reserves around. I have money in stocks and mutual funds that are reasonably liquid -- on most any open market day I can sell them and get a check in a day or two. I also have a HELOC that I could write a check off of if necessary.

And if it all came down, I think I'd be more worried about food, water, and ammunition than market yields.

If you're planning on a near-term major purchase, CDs are about the best you're going to get these days, safely. But I'll be happy to be proven wrong :biggrin:.
 
If you sell stock, it takes three business days to clear and get your money. So if you sold stock last Friday, you won't receive your funds until next Thursday, because of the weekend and Labor day. Six days in total. Again, the question is "how liquid?"
 
Ok, then give me different answers for the different levels of liquid.

I realize I can sell assets in my taxable account and get the money within about 48 hours. But that creates a tax consequence that sometime I don't wish to have.
 
osugrad97 said:
Ok, then give me different answers for the different levels of liquid.

I realize I can sell assets in my taxable account and get the money within about 48 hours. But that creates a tax consequence that sometime I don't wish to have.
Click to expand...

How do you get money in "about 48 hours"? Stocks take three BUSINESS days to clear. You could also sell stock where you have a loss in that position and use that as a tax advantage.

Could you be more specific regarding what you're objective are?
 
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Dtrigg said:
How do you get money in "about 48 hours"? Stocks take three BUSINESS days to clear. You could also sell stock where you have a loss in that position and use that as a tax advantage.

Could you be more specific regarding what you're objective are?
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I don't have any individual stocks in my taxable accounts. Just mutual funds. If I remember correctly I can have that money the day after the sale. Maybe I am off by a day but 2-3 days is plenty liquid.

I guess my objectives are to have some money thats not long term and available for emergencies, etc. Not sure exactly, now that you ask. Typically I like to have some money that is a sure thing.

I have a open, zero balance, HELOC that I can write checks against so I guess thats about as liquid as any.

Just a place to park money that is low risk and liquid. I think I know the answer is MMAs or CDs but just wanted to get others opinions.
 
Re: beats the mattress...

Osiris_x11 said:
nsxsupra recommended this, in another not-so-long-ago thread...

Citibank Ultimate Saver (8.00% p.a.)

http://www.citibank.com.au/ultimatesaver/index.htm

Can anyone offer any pros/cons & insights into it, before I pack my weekend-bag for Sydney...(?)
Click to expand...

Your first linky is not the correct one...

The Citibank account is (1) outside the U.S. and that could have tax implications, (2) you earn 7.75% for amounts over one million and (3) you don't earn any interest for deposits less than $10K.:wink:
 
still worth lookin' into...

Dtrigg said:
Your first linky is not the correct one...
Click to expand...
The linky does worky, it's to the member's profile so he can be messaged if someone wants to hear from his own personal experience!

nsxsupra made this post in this thread.

Dtrigg said:
The Citibank account is (1) outside the U.S. and that could have tax implications
Click to expand...
Well, I could choke on my popsicle right now, but doesn't mean I will... :D

Hence, why I asked for further insights, not could/would/should!

Dtrigg said:
(2) you earn 7.75% for amounts over one million and (3) you don't earn any interest for deposits less than $10K.:wink:
Click to expand...
For those who have over "$1,000,000 cash" in their checking-account would not need an online car-enthusiasts forum for advice in regards to max' yield on their liquid/cash-reserves... ;)

For those w/ less than "$10,000", they gotta come to the realization that isn't really anything. . .

Regardless, here's what the entire fine-print states:

"The portion of your balance under $10,000 does not earn interest. Rate of 8.00%pa applies to the portion of your balance from $10,000 to $1,000,000. Rate of 7.25%pa applies to the portion of your balance over $1,000,000."

$10,000 - $1,000,000 @ 8% is a-o.k. by me. Even 7.25% or 7.75%.

Money earned in the U.S. or money earned abroad isn't an issue for me, as I see myself residing in many countries when all-is-said-and-done (ie. post-career/retirement). . .
 
Re: still worth lookin' into...

Osiris_x11 said:
The linky does worky, it's to the member's profile so he can be messaged if someone wants to hear from his own personal experience!

nsxsupra made this post in this thread.


Well, I could choke on my popsicle right now, but doesn't mean I will... :D

Hence, why I asked for further insights, not could/would/should!


For those who have over "$1,000,000 cash" in their checking-account would not need an online car-enthusiasts forum for advice in regards to max' yield on their liquid/cash-reserves... ;)

For those w/ less than "$10,000", they gotta come to the realization that isn't really anything. . .

Regardless, here's what the entire fine-print states:

"The portion of your balance under $10,000 does not earn interest. Rate of 8.00%pa applies to the portion of your balance from $10,000 to $1,000,000. Rate of 7.25%pa applies to the portion of your balance over $1,000,000."

$10,000 - $1,000,000 @ 8% is a-o.k. by me. Even 7.25% or 7.75%.

Money earned in the U.S. or money earned abroad isn't an issue for me, as I see myself residing in many countries when all-is-said-and-done (ie. post-career/retirement). . .
Click to expand...


Then do the currency conversion. The interest is paid in AU dollars. One AU dollars equals $0.848716 UDS as of September 1, 2008. You are not getting 8% on your money unless you live there. Sure you'll get your 8% on your funds in AU dollars, then what happens when you do the currency conversion to U.S. dollars?

Money earned in the U.S. or abroad should be an issue for you. I am retired and I do spend a lot of time in many countries and it's a major issue for me, mainly due to currency.
 
If you want high liquidity and any FDIC insurance, you'll have to use a high yield savings account getting that measly 3.5%. It's LIBOR and fed rates, not much you can do about it. Just a couple years ago 6% was easy to get, it's just how the market is these days.
 
huh?

Dtrigg said:
Then do the currency conversion. The interest is paid in AU dollars. One AU dollars equals $0.848716 UDS as of September 1, 2008. You are not getting 8% on your money unless you live there. Sure you'll get your 8% on your funds in AU dollars, then what happens when you do the currency conversion to U.S. dollars?

Money earned in the U.S. or abroad should be an issue for you. I am retired and I do spend a lot of time in many countries and it's a major issue for me, mainly due to currency.
Click to expand...
Perhaps, I'm simple-minded, but when you toss $10,000 USD into the Aussie-based Citbank dealio, wouldn't that $10,000 USD be converted to $11,784.82 AUD (1 AUD = 0.848549 USD). And then you'd earn interest on that amount ($11,7845.82 AUD).

When the time comes that you wish to withdraw/transfer, whenever/wherever, the amount in AUD would then be converted to an amount in USD.

I don't get your point? Are you referring to currency fluctuations over the course of your investment's interest accruing? Obviously, that's a risk, I guess. I've invested in foreign banks due to their enticing interest-rates over the years in their national currency while considering currency devaluation. Just about every time, the chosen investment's positive growth exceeded that of alternative investment-instruments that I would've otherwise gone with (even after currency devaluation). Needless to say, it's worthwhile to do your homework & know what you're getting into.

Different strokes, for different folks. . .
 
Re: huh?

Osiris_x11 said:
Perhaps, I'm simple-minded, but when you toss $10,000 USD into the Aussie-based Citbank dealio, wouldn't that $10,000 USD be converted to $11,784.82 AUD (1 AUD = 0.848549 USD). And then you'd earn interest on that amount ($11,7845.82 AUD).

When the time comes that you wish to withdraw/transfer, whenever/wherever, the amount in AUD would then be converted to an amount in USD.

I don't get your point? Are you referring to currency fluctuations over the course of your investment's interest accruing? Obviously, that's a risk, I guess. I've invested in foreign banks due to their enticing interest-rates over the years in their national currency while considering currency devaluation. Just about every time, the chosen investment's positive growth exceeded that of alternative investment-instruments that I would've otherwise gone with (even after currency devaluation). Needless to say, it's worthwhile to do your homework & know what you're getting into.

Different strokes, for different folks. . .
Click to expand...

Hello. Ever heard of breakpoint?

Great. You invest $11,000. You receive no interest for the first $10K. Now you receive 8% for the $1k or $80 that is not being paid on the first $10K. Please compute your investment return of $80 for an investment of $11,000. Now do the currency conversition! Yeah, each to their own. Just work the math.

Yeah, I have lived and worked in Asia, Latin America, Europe, South America, the former Eastern Bloc and the Middle East. Want to think about how my attorneys structured my payments and in what currencies? So you are going to live all around the world. Number one you can't. There is a totally difference in a visitor visia and a residencience visa.

You're correct. Different strokes for different folks.
 
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and now what?

Dtrigg said:
Hello. Ever heard of breakpoint?
Click to expand...
Aside from the break-point, what's your beef w/ this avenue of investment? O.k. by default, 1st $10,000 isn't privy to the high-interest rate. Big deal. Compounded interest of 8% on $11,000 - $999,000 sure beats 3.5% state-side. . .

Dtrigg said:
Yeah, I have lived and worked in Asia, Latin America, Europe, South America, the former Eastern Bloc and the Middle East.
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So... you got a lotta' frequent-flyer miles! Cool. Want a cookie?!? :D

I know 5-6 others who have invested in this particular outlet w/o residence (mind your spelling, btw!).

You my friend are arguing for the sake of arguing. To make a long-story short, please stop.
 
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Re: and now what?

Osiris_x11 said:
Aside from the break-point, what's your beef w/ this avenue of investment? O.k. by default, 1st $10,000 isn't privy to the high-interest rate. Big deal. Compounded interest of 8% on $11,000 - $999,000 sure beats 3.5% state-side. . .


So... you got a lotta' frequent-flyer miles! Cool. Want a cookie?!? :D

I know 5-6 others who have invested in this particular outlet w/o residence (mind your spelling, btw!).

You my friend are arguing for the sake of arguing. To make a long-story short, please stop.
Click to expand...

Please be advised, I am not arguing. I could care less how you or anyone invests their money. It is really none of my business. If a person wants to invest $100,000 and get paid interest on $90,000, that's their business. And if they choose to get that interest on the $90,000 paid in discounted dollars, i.e. AU dollars, big deal. As the astute business person that you are, you of course realize that the S&P has historically returned 8%. So you can invest your $100,000 and get paid 8% on $90,000 in discounted dollars, while some other person could invest $100,000 and expect to receive 8% on $100,000 in non-discounted dollars is really not of my concern. If your 5 - 6 others choose to do that, I wish them well.:confused

If you and your 5 - 6 others are content with 8% disounted dollars on your $11,000 to $999.000 good for you. It's 8% historically on the S&P by the way, not 3.5%, unless you put all of your money in a money market fund. Even Fed funds pay more than that.

Than again, what do I know. I am a dumb former stock broker that lives on my interest and dividends. I do know that I have professional money managers that over see my investments and if they don't out perform the S&P at a 8% return, they won't be working for me in the future. In fact, my money managers are at Smith Barney which is owned by CitiBank. I really want to know why my professional money managers missed this gem that you discovered. It's their own company!

You're correct in that I have a number of frequent flyer miles. No thank you regarding a cookie.:tongue:
 
sock-drawer... in the Caymans!

Dtrigg, I do understand and realize the historic trends of the S&P.

However, I'm expressing my opinion under the premise of liquidity & quick-access to cash, which of both are things mentioned by the original poster (osugrad97). The "3.5%" figure was mentioned by them, not something I arbitrarily came up w/ on my own.

It's not an apples-to-apples comparison, so to speak, to bring in the S&P & compare it to a high-yield savings account. We're comparing savings-accounts, FCU's, MMA's, etc' in this topic.

There's absolutely no doubt, that w/ the higher level of risk associated w/ stocks/funds/etc', the rate of return will potentially be higher as well. . .
 
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heySkippy said:
gmacbank for us.
Click to expand...

osugrad97 said:
In CDs? MMAs? Savings?
Click to expand...

Savings. We've found the savings have interest rates very close, and sometimes better, than the CDs. We aren't rich people so for us short term and emergency savings means we've got a year's worth of house payments in the bank. Anything beyond that I will either spend or use to play catch-up in my 401(k).
 
Good thread, I was wondering what everyone else does too.

One thing to think about is you probably don't need ALL of your emergency money quickly assessable. You could probably have 1/3-1/2 in a savings account, and the rest in stocks beside your longterm money.
 

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