Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-30-2008, 08:01 AM   #41
Recycles dryer sheets
In-control's Avatar
 
Join Date: Mar 2007
Posts: 319
I have 5 years in laddered CD's @ between 5-5.5% yield. I split the remainder 50/50 between VG Bond Index and High Yield for my bond portion. The rest are VG stock funds. One consideration with a bond fund is that the priciple can go down, my two bond funds are down. The 5 years of cash in CD's that are FDIC insured is really my operating $. The $ I yield from my non cd investments build my laddered CD's.

Also - I like to sleep at night and the 5 year CD ladder really smooths out the market variations!
__________________

__________________
Just Trekking thru!
In-control is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-30-2008, 10:20 AM   #42
Full time employment: Posting here.
 
Join Date: Feb 2008
Posts: 920
You guys and gals with CD ladders did you start 'em by buying CDs of 1,2,3,...n years and say presto I've got a CD ladder or did you build 'em over many years with all longer maturity instruments until enough rungs?
__________________

__________________
tuixiu is offline   Reply With Quote
Old 10-30-2008, 10:29 AM   #43
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by Fastfade View Post
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
Maybe you'd make more birdies if you changed your username to Slowdraw
__________________
FIRE'd@51 is offline   Reply With Quote
Old 10-30-2008, 11:19 AM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by redduck View Post
I am sure Dex is absolutely right on this one, as I sold 1/2 of my VWEHX last week.
I'm buying more of it - I don't have much investment cash remaining.

My plan is to use the dividends to buy mutual funds that don't pay monthly dividends e.g. small cap value stocks. It isn't much money but it should help my portfolio recover faster.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 10-30-2008, 11:27 AM   #45
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by haha View Post
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
Look at fxa, fxe, fxc etfs
Good charts
Forex Street. The Foreign Exchange Market
News
RatesFX - Daily foreign exchange rates, information about currencies and currency markets

Do your research.
I've noticed that the prime mover in FX is the anticipation of the direction in interest rates and the relative values.
Also, some currencies influenced by commodities in addition to interest rates - AUD, CAD
I'm looking at the area around the 2001 lows as buying points.
What's good about them is that you are earning interest on the investment.
Don't trade in and out of them. Try to find the long term trend.

My purchase idea is:
1st
AUD
CAD
commodities turn around and catch Asian economy turn around
Euro - interest rate
UK pound - interest rate - this will need to come down a lot before I buy it.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 10-30-2008, 11:32 AM   #46
Full time employment: Posting here.
Ronnieboy's Avatar
 
Join Date: Feb 2008
Posts: 646
I am guessing multiple banks/credit unions are used to stay under the $100k limit on accounts? If you consider $50k as 1 year expenses and you have 5+ years worth of 'cash' in CD's that is $250k+ that has to be split between 3 financial institutions?
__________________
I don't want to spend my entire life at work. I deserve more. - Want2retire aka W2R
Ronnieboy is offline   Reply With Quote
Old 10-30-2008, 11:36 AM   #47
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 1,760
Quote:
Originally Posted by Ronnieboy View Post
I am guessing multiple banks/credit unions are used to stay under the $100k limit on accounts? If you consider $50k as 1 year expenses and you have 5+ years worth of 'cash' in CD's that is $250k+ that has to be split between 3 financial institutions?
I be tempted to split between 5 institutions so I stay below the 100K limit (two CD's plus interest at one bank will exceed the limit).

-- Rita
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 10-30-2008, 11:46 AM   #48
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
Quote:
Originally Posted by Ronnieboy View Post
I am guessing multiple banks/credit unions are used to stay under the $100k limit on accounts? If you consider $50k as 1 year expenses and you have 5+ years worth of 'cash' in CD's that is $250k+ that has to be split between 3 financial institutions?
Not true. 100K in DW, 100K in Self, 100K DW POD to 3 kids, 100K Self POD to 3 kids and IRA DW about 100K, IRA Self about 150K total 650K single institution ALL FDIC. Pull interest monthly and either spend it or on-line transfer it to another institution.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 10-30-2008, 01:07 PM   #49
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
Quote:
Originally Posted by tiuxiu View Post
You guys and gals with CD ladders did you start 'em by buying CDs of 1,2,3,...n years and say presto I've got a CD ladder or did you build 'em over many years with all longer maturity instruments until enough rungs?
I built mine up over the years.

Originally was aiming for a 'maturity date' of 2008 (planned to retire in March 2008 with 30 years service). Plan was for ~$5000/year from each of five $20,000 CDs.

I retired rather suddenly in December 2004. This December's CD is $10,000 (plus 5 years of interest of 3.75%). I don't have the cash to boost it to $20,000.

Did have ~$20,000 in MMA, but depleted that in 2007 with buying a car and boosting 2012 CD to $20,000.
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Old 10-30-2008, 01:33 PM   #50
Dryer sheet aficionado
 
Join Date: Apr 2006
Posts: 49
Quote:
Originally Posted by jIMOh View Post
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.
Yeah, those look strange. The answer is that my total portfolio (cash + bonds + stock) has decreased. BY a LOT. While the percentage of equites in my total only dropped by 7%, The value of my equities dropped around 44% year to date.

And I don't think anyone has ever learned anything from me about finances - it's not a subject in which I consider myself knowledgeble.

Rick
__________________
rickier55 is offline   Reply With Quote
Old 10-30-2008, 02:32 PM   #51
Recycles dryer sheets
In-control's Avatar
 
Join Date: Mar 2007
Posts: 319
Quote:
Originally Posted by tiuxiu View Post
You guys and gals with CD ladders did you start 'em by buying CDs of 1,2,3,...n years and say presto I've got a CD ladder or did you build 'em over many years with all longer maturity instruments until enough rungs?
I built the original 5 over time. It tock me ~ 3 years and I sold a bunch of stock options to accelerate it. This served to re-balance my portfolio. Now my portfolio funds about 80% of my needs and I need to earn the rest, since their will be little appriation of assets this year.

Once I committed to a 20%cash 40%bond and 40%stock allocation it all fell together nicely.
__________________
Just Trekking thru!
In-control is offline   Reply With Quote
Old 10-30-2008, 09:28 PM   #52
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
Quote:
Originally Posted by free4now View Post
My approach is to have 1 year in money market (Vanguard Prime) and 4-5 years in short term bonds funds (VFSUX). That way I have access to everything at a moment's notice if needed for rebalancing purposes, but I get the same return smoothing benefits as if I maintained a bond ladder.
I have the same plan, but once this mess settles down, I plan to use ST & MT treasuries & TIPS instead of ST corp bonds.
__________________
walkinwood is offline   Reply With Quote
Old 10-30-2008, 10:08 PM   #53
Thinks s/he gets paid by the post
DblDoc's Avatar
 
Join Date: Aug 2007
Posts: 1,224
Quote:
Originally Posted by walkinwood View Post
I have the same plan, but once this mess settles down, I plan to use ST & MT treasuries & TIPS instead of ST corp bonds.
I made that switch about 18m ago based on the advice of Swedroe, Swenson and others and have learned why that advice was/is good. Take your risk with equities and stick to gumint bonds. Unfortunately I only have access to bond funds so still have some NAV variability that I cannot control. For that reason I'm planning on cash + CD ladder for 4-5 years worth and the remaining fixed income in bond funds.

I'd still like to hear how people created their CD ladder. As mine will not be tax advantaged and I'm in a high marginal tax rate I'm loathe to create them until absolutely necessary.

DD
__________________
DblDoc is offline   Reply With Quote
Old 10-31-2008, 07:29 AM   #54
Recycles dryer sheets
In-control's Avatar
 
Join Date: Mar 2007
Posts: 319
Quote:
Originally Posted by DblDoc View Post
I made that switch about 18m ago based on the advice of Swedroe, Swenson and others and have learned why that advice was/is good. Take your risk with equities and stick to gumint bonds. Unfortunately I only have access to bond funds so still have some NAV variability that I cannot control. For that reason I'm planning on cash + CD ladder for 4-5 years worth and the remaining fixed income in bond funds.

I'd still like to hear how people created their CD ladder. As mine will not be tax advantaged and I'm in a high marginal tax rate I'm loathe to create them until absolutely necessary.

DD

I started to setup my portfolio w/o ladderd CD's, using bond funds, and quickly realized that the variabiltiy of bond funds made them bad choices for the cash source that needed to be guareenteed. Before I RE'd I rebalanced to have the 5 yr cd Ladder and am very thankful that I did. I don't really see anyother good choice, especially with FDIC insurance.
__________________

__________________
Just Trekking thru!
In-control is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
5-7 Years Expenses in Cash versus Rebalencing to Fixed AA Hydroman FIRE and Money 14 08-08-2007 05:04 PM
How many years of expenses in cash at retirement? Rich_by_the_Bay FIRE and Money 30 03-29-2007 07:52 PM
3-5 years cash in taxable or IRA? donheff FIRE and Money 10 03-12-2007 07:18 PM
How many years of expenses in cash Rich_by_the_Bay FIRE and Money 27 07-12-2006 02:52 PM
Would you tie up some cash for 7 years at 6%? ShokWaveRider FIRE and Money 7 01-02-2006 03:52 PM

 

 
All times are GMT -6. The time now is 10:52 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.