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Old 10-29-2008, 02:58 PM   #21
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I've let my money market account dwindle a little too much, and in the next six months I'll have to cash out some of my GNMA or Total Bond Index fund shares.

In part I feel bad that I didn't have more "cash cash" on hand, however, the GNMA has returned 4.5% over the last year while the Prime MM has returned 3.6%.
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Old 10-29-2008, 04:56 PM   #22
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Originally Posted by tiuxiu View Post
Be more interesting thread if knew the working/retirement status of those responding to this question, as some might consider the cash needs of a retiree different than, say, a dual income family that can live off either income or versus a single income family.
Retired almost 3 years.
We carry (carried) 5 years in Prime MM and CD's, and another 5 in bonds.

This has slowly been changing throughout 2008 with the drop in MM rates. We've been picking up more CD's at 4-1/4 from Guaranty Bank and moving from MM into Total Bond. The mix now is probably more like 3 years MM/CD's, 7 years bonds. We've also made some small additions to our equity funds over the last several months. Our AA varies from around 50/50 to 55/45.
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Old 10-29-2008, 05:34 PM   #23
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this might be a good time to get into VWEHX: Summary for VANGUARD HIGH YIELD CORPORATE F - Yahoo! Finance
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Old 10-29-2008, 07:32 PM   #24
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I have 4 yrs of cash in CD's. With expected interest and dividends from stocks and bonds I should be able to go 14 yrs. without selling equities. We'll have to see how this works out in the current environment.
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OT question
Old 10-29-2008, 07:40 PM   #25
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OT question

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Originally Posted by rickier55 View Post
Thanks for posting the question. It clears up some of the things I didn't understand when folks talked about "cash".

I keep three "buckets" I guess of cash (in savings accounts). These buckets are mainly for major expenses or emergencies, Car (either for major repair or down payment if it gets big enough - Home repair (major appliance - or furnace repair, roof etc - and Travel ).

I feed these accounts monthly. And I haven't actually included them as part of my "portfolio". And when I figure my expencses, I include an amount in expenses to feed these buckets.

In my portfolio I have about 30% bonds (government) and about 70 equites (various).

If I factor in my emergency cash into my portfolio, I'm probably looking at
Cash - 9%
Bonds - 26%
Stocks - 65%
( I just did some quick numbers and at beginning of year these percentages were 4%, 18% and 72%)

But I don't plan to change how i'm looking at my cash - I know I'm going to need this cash and it probably won't be something I can put off - if my furnace breaks - I'll need to fix it, if my car breaks - I need to fix it(or buy a new one)- So I don't really count this cash as part of my portfolio, or count it as available for balancing my portfolio.

But - hearing how folks account for the "cash" part of the portfolio is informative.

Not sure if it's pertinent to the discusion, but I do have a COLA'd pension that covers 90% of my expenses.

Rick
OT question- how did your equities only go down 8% with the markets of 2008? I would have expected equities to drop more than this. Asking to learn. thx.
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Old 10-29-2008, 07:41 PM   #26
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I probably have about 15 years worth of cash in various currencies, getting a variety of yields. I move them around, generally based on the various Central Banks' interest policy directions. Works for me.
This sounds like an interesting alternate path. What are the mechanics of doing this? Do you use Everbank or have accounts in the various countries whose currencies you hold?

Ha
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Old 10-29-2008, 07:45 PM   #27
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I consider cash and bonds to be very different and used for different reasons.

I am also still accumulating, so most of this is based on my plan, not current reality.

5 years expenses in cash or TIPS. The biggest risk here is needing money NOW and inflation.
Another 5 years expenses in bonds. Because of interest rate risks and trends, this value may fluctuate.

10 years expenses will always be in cash or bonds. I could see adding to cash and lowering bonds to 4-3-2 years expenses if bonds are going up in value (interest rates trending downward).
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Old 10-29-2008, 07:50 PM   #28
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I have 11 consecutive years in fixed( fixed annuities). The good news is that I missed both the DotCom mess and this latest mess. The bad news is I only made one birdie today
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Old 10-29-2008, 08:19 PM   #29
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This sounds like an interesting alternate path. What are the mechanics of doing this? Do you use Everbank or have accounts in the various countries whose currencies you hold?

Ha
Ha,

I have accounts offshore (chose your definition). For US citizens, that is probably more difficult, however the concept remains the same. I am not familiar with Everbank, but if they grant you access to a variety of currencies, you should be able to replicate the model.

If you have ice in you veins (literally), Iceland just raised interest rates by 6% to 18%. That's one heck of a CD if it pays back.
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Old 10-29-2008, 08:41 PM   #30
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I've heard a lot of folks on this board talking about having 5 years in cash, but I have yet to hear anyone talk about having 5 years in bonds. Which surprises me since most experts on asset allocation advise putting the bulk of your non-equity holdings in bonds, not cash.

So all you folks who said you have 5 years in cash, do you really mean cash (e.g. CDs, saving account, money market) or do you mean bonds (duration longer than a few months)?
I really mean cash.

Musing about this - - a person could have five years' in cash, and still have the bulk of their non-equity holdings in bonds, if they have a conservative enough AA.
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Old 10-29-2008, 08:58 PM   #31
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I really mean cash.

Like paper? in the matress?
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Old 10-29-2008, 08:59 PM   #32
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I am sure Dex is absolutely right on this one, as I sold 1/2 of my VWEHX last week.
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Old 10-29-2008, 09:08 PM   #33
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Like paper? in the matress?
Like Vanguard Money Market funds, right now, plus a little in the bank. Like CD's, at some point in the near future, tentatively.

As far as paper type cash (looking in my wallet), nope.
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Old 10-29-2008, 09:32 PM   #34
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Like paper? in the matress?
It so happens I read about the following info in BusinessWeek, 11/3/08.

Sales of home safes were up significantly last month, as reported by SentrySafe, a safe maker, and by Home Depot. Apparently, people have been hoarding cash. This is further collaborated by the Federal Reserve reporting a rise of $21B of cash in circulation.

Has anyone read reports of increased gun sales, and lead?

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As far as paper type cash (looking in my wallet), nope.
Same as you, I have little cash in my wallet. Are we too trusting in the financial system?

I thought I read about a poster here withdrawing extra cash to pad his wallet just in case, maybe a month ago.
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Old 10-29-2008, 09:42 PM   #35
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MM and cd's. $15 in my billfold and $8.26 of change in a jar....
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Old 10-29-2008, 09:58 PM   #36
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Cash Cow

I was up at the ranch this week and there was an article in the local paper there about a 90 something year old man who took his $100,000 plus stash out of the bank and bought a home safe. Depression era man.

Well, the overall property got raided by the dope police. Caught the young ones and confiscated his cash. Paper said the D.A. refuses to look at his bank withdrawal receipt to prove where it came from. I hope they can settle that, seems a shame.

I used to keep quite a bit of cash in the house. I had a stack of hundred dollar bills. Every time I would sell an old car or boat or something I would get more hundreds from the buyers.

It finally became too much. I was way over the $10,000 limit at which banks report your deposit to the IRS looking for criminals. So, I went to several banks and deposited it. I remember a young teller gave out an, "Oh, God" or something when I plunked down a bundle.

Not safe to have too much laying around. My neighbor told my wife "I run a deep keel". Has some gold in his back yard. Too deep a keel for me.

boont
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Old 10-29-2008, 10:22 PM   #37
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....

It finally became too much. I was way over the $10,000 limit at which banks report your deposit to the IRS looking for criminals. So, I went to several banks and deposited it. I remember a young teller gave out an, "Oh, God" or something when I plunked down a bundle.
.....
Actually the filing of a CTR for 10k plus deposits isn't what attracts the notice of the Feds. Banks file thousands of CTR's a day nationwide as a routine. No big deal.

It's when someone has obviously structured deposits to avoid the filing of a CTR that attracts attention. Structuring deposits to avoid the requirement to fill out a CTR is a felony and easy to prosecute regardless of whether the source of the funds was legitimate or illegitimate.
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Old 10-29-2008, 11:47 PM   #38
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"Actually the filing of a CTR for 10k plus deposits isn't what attracts the notice" Texarkandy

Well, I'm glad to hear that. I assumed that if a person came in with a huge pile of grungy looking stacks of one hundred dollar bills, that person would be likely mistaken for a drug dealer.

I do know that many people in shady businesses have to pay to launder money.

Years ago, I lived in the marina section of San Francisco. Very expensive, even then. I often wondered how my neighbors afforded to live there. Then one day the newspaper had an article about a raid on a nearby house. Among other things they found piles of cash and a bill counting machine.

Every after, I always wanted to have enough cash laying around to need a bill counting machine. Well, as the market sinks, I'm getting there. Even at, soon to be, zero interest rates.

My old boss, now worth about four billion dollars (I think it's more since he has no debt) has an original cartoon painting of Scrooge McDuck over his fireplace, money bags and all. Lucky man.


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Old 10-30-2008, 05:44 AM   #39
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Interesting short pdf on money laundering flags (OCC Treasury): http://www.occ.treas.gov/bsa/documen...posit_Acct.pdf
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Old 10-30-2008, 06:48 AM   #40
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"Actually the filing of a CTR for 10k plus deposits isn't what attracts the notice" Texarkandy

Well, I'm glad to hear that. I assumed that if a person came in with a huge pile of grungy looking stacks of one hundred dollar bills, that person would be likely mistaken for a drug dealer.

I do know that many people in shady businesses have to pay to launder money.

Years ago, I lived in the marina section of San Francisco. Very expensive, even then. I often wondered how my neighbors afforded to live there. Then one day the newspaper had an article about a raid on a nearby house. Among other things they found piles of cash and a bill counting machine.

Every after, I always wanted to have enough cash laying around to need a bill counting machine. Well, as the market sinks, I'm getting there. Even at, soon to be, zero interest rates.

My old boss, now worth about four billion dollars (I think it's more since he has no debt) has an original cartoon painting of Scrooge McDuck over his fireplace, money bags and all. Lucky man.


b.
Large sums of money (in the hundreds of thou or more) derived from illegal activity are traditionally laundered via business accounts to make them appear to be legitimate sources of income & CTR's are filed. You don't care if a CTR is filed when you are trying to make the $ look like they are from a legit source. No respectable money launderer would attempt to avoid CTR requirements.
(& if anyone ever suggests it to you, I suggest you shop around & find yourself a better money launderer )

It's generally smaller sums that are "smurfed" into deposits of less than 10k to avoid the CTR requirement.

A customer as you described with "grungy looking stacks of hundred dollar bills" would likely have an SAR filed by the bank with FINCEN. That's what would alert the feds - not the CTR. Banks are generally alert to & file SAR's on "smurfers" too. (the bank won't tell you if they've filed an SAR on you)

While still practiced, a lot of that stuff is more & more becoming "old hat" & things have become more sophisticated among the big players in the profession. (internet, money cards, eft, etc)

But what the heck do I know .....
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