I've always been told to keep an emergency fund of at least six months of savings in case of issues or problems that arise in my future. Well, I saved around ten years worth of emergency funds. This is separate from my investment risk capital or normal earnings. Now, it is earning around five hundred dollars a month in savings interest, and is at a bank that has additional insurance to over over the standard 100k FDIC (Citibank). The question is, am I placing the monies in the best place to earn interest? I already have a Roth IRA and solo 401k as well. I just like to have additional back-up plans in case problems arise. I also need the monies to be in little to no risk, however, I think 3.20% is really pathetic, and I do not trust this amount of money to an Internet bank. I did divert around 50k into a some mutual funds, and it is earning around 28%. However, it is based on different funds based on metals, Asia, Europe, and Latin America. Any ideas on what safe investments I can use to better grow the monies in my savings account? I asked the bank for a better rate, and they said under a million this was the best rate I can get. Which, sounds really strange. Usually, I thought the more money you have in savings the better rate you get... What am I missing here?
200k in savings account... Earning a low 3.20%... What do to...
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I assume you are American. I assume you have enough money for this to be worth the opportunity cost and hassle. I am not a financial advisor nor do I have any interest in being one, but consider my thoughts and do your own research and make your own decision. Think about the advice you do get from an advisor and whether they are thinking in a truely international paradigm, or are they just a conventional blueprinter who thinks the system is unbreakable and if it breaks then we're all screwed anyway (sometimes I'll term these people as financial "patriots/nationalists").
I assume we are planning for a rainy day. When I say rainy day I mean: litigation risks, Bank holidays, domestic war/terrorism, unthinkinable natural disaster, plague, markets closed, currency controls, travel restrictions, violence, chaos, bedlam, etc -- essentially a pessimists wet "I told you so" dream.
#1 - 5% of rainy day money, in my opinion, should be in hard assets I have my hands on. This would in most peoples cases be gold coin. It's amazing what you might be able to do with this seemingly small amount when things are bad, and you need to beg/bribe your way to your safe haven of choice.
#2 - Buy an assault rifle or two, a couple of thousands of rounds of ammunition. You may think I'm crazy, you may think I'm joking. I might be crazy. I'm not joking.
#3 - Have an up to date passport for you and immediate family, preferrably have dual citizenship / secondary travel passports...
#4 - Rest of rainy day funds can be put in offshore (pref swiss, I know there are detractors, I still challenge anyone to prove a safer place to put money in the last 1,000 years) numbered account(s), invested in a diverse global fixed income portfolio which is not in USD base currency. More risky than savings account, but you're not going to get your money back for the types rain I'm talking about FDIC or not.... might as well make more return and have somewhere you can physically access it.
#5 - Hope and pray this is all a ridiculous waste of time, money, and is a big opportunity cost. But realize that it is an inevitability given enough time. Please see the last couple thousand years of human experience, with plenty of recent political, economic, and military events happening to "other people" around the world. Odds are we see this type of problem in the US before we get hit by an asteroid or similar world-ending event in which this truely is an excersize in futility and "we're all screwed anyway".
I assume we are planning for a rainy day. When I say rainy day I mean: litigation risks, Bank holidays, domestic war/terrorism, unthinkinable natural disaster, plague, markets closed, currency controls, travel restrictions, violence, chaos, bedlam, etc -- essentially a pessimists wet "I told you so" dream.
#1 - 5% of rainy day money, in my opinion, should be in hard assets I have my hands on. This would in most peoples cases be gold coin. It's amazing what you might be able to do with this seemingly small amount when things are bad, and you need to beg/bribe your way to your safe haven of choice.
#2 - Buy an assault rifle or two, a couple of thousands of rounds of ammunition. You may think I'm crazy, you may think I'm joking. I might be crazy. I'm not joking.
#3 - Have an up to date passport for you and immediate family, preferrably have dual citizenship / secondary travel passports...
#4 - Rest of rainy day funds can be put in offshore (pref swiss, I know there are detractors, I still challenge anyone to prove a safer place to put money in the last 1,000 years) numbered account(s), invested in a diverse global fixed income portfolio which is not in USD base currency. More risky than savings account, but you're not going to get your money back for the types rain I'm talking about FDIC or not.... might as well make more return and have somewhere you can physically access it.
#5 - Hope and pray this is all a ridiculous waste of time, money, and is a big opportunity cost. But realize that it is an inevitability given enough time. Please see the last couple thousand years of human experience, with plenty of recent political, economic, and military events happening to "other people" around the world. Odds are we see this type of problem in the US before we get hit by an asteroid or similar world-ending event in which this truely is an excersize in futility and "we're all screwed anyway".
Yea, I keep around 50k in a safe for immediate needs. As I said before, I have a roth, a solo 401k, etc. This is not really my investment money. This is rainy day money that I want to get the best return on with little to no risk. Swiss bank accounts are not as safe as they were a couple of decades ago. I am not talking about nuclear war or something. If that happens, we are all gone anyway. Just looking to get the best return with little risk. FDIC is very important, as most major banks and financial institutions purchase additional coverage. I believe Citibank covers accounts up to five million at no extra charge. However, 3 points is really low, and I just thought there are better places to keep it.
Put it in a non intersest checking account with a small local bank and tell the manager you plan on moving your business account there as well. Go in 3x a week so they can kiss your ass. At the end of the month withdraw it all , hilarity ensues.
I'm not talking about nuclear war.
I'm talking about economic collapse on either a wide scale or, in the case of litigation, on a very personal scale. I simply don't trust the government to deliver on their insurance under certain circumstances, even they have a breaking point. If you want a recent example, just go to areas devastated by katrina to see how well the government takes care of its purported responsibilities.
Unless you are 70 years old, I agree you're not making the % you should be. If you are a big believer in our financial-worthiness as a country, then perhaps t-bills might fit your fancy?
http://www.savingsbonds.gov/indiv/indiv.htm
I'm talking about economic collapse on either a wide scale or, in the case of litigation, on a very personal scale. I simply don't trust the government to deliver on their insurance under certain circumstances, even they have a breaking point. If you want a recent example, just go to areas devastated by katrina to see how well the government takes care of its purported responsibilities.
Unless you are 70 years old, I agree you're not making the % you should be. If you are a big believer in our financial-worthiness as a country, then perhaps t-bills might fit your fancy?
http://www.savingsbonds.gov/indiv/indiv.htm
Although I hate both of these banks... they both offer an 'internet' version of their MM account. You should be able to 'trust' them!
Citibank e-savings 4.75%
HSBC Online 5.05%
BTW. FIDC coverage is $100k PER account. So you can have 2, 3, or more accounts at any one bank for each $100k and be covered. Of course, if you are paranoid, then you should generally spread the wealth!
Don't forget, even at 5%, when you take out taxes and inflation, you are probably not making any money....but just barely keeping up with inflation.
Citibank e-savings 4.75%
HSBC Online 5.05%
BTW. FIDC coverage is $100k PER account. So you can have 2, 3, or more accounts at any one bank for each $100k and be covered. Of course, if you are paranoid, then you should generally spread the wealth!
Don't forget, even at 5%, when you take out taxes and inflation, you are probably not making any money....but just barely keeping up with inflation.