A Financial Review this Morning (Completed)

[FinanceDude]

No, I'm serious! (heh)

I guess if I answered the customer service number at VG or Fido, I'd then be a good advisor?

 

[twaddle]

I'm impressed that you can get 5.71% on laddered CDs over 7 years, how did you do that? Maybe it doesn't matter, since your expenses are so low and you don't need to draw them down. But I've been looking to ladder CDs over 7 years, and even with 6% 7 year PenFed CDs, if I spread them equally over those 7 years the first few years kill me with low return.

I assume R Wood picked up a slug of the 6.25% CD's from PenFed earlier this year, but you can fill in the lower rungs with pretty high rates if you spread them across banks:

CD Thread, Post The Best Rates You Can Find Here!

 

[FinanceDude]

I assume R Wood picked up a slug of the 6.25% CD's from PenFed earlier this year, but you can fill in the lower rungs with pretty high rates if you spread them across banks:

CD Thread, Post The Best Rates You Can Find Here!

Yup, the Fed may raise rates late next year, it depends on the mysterious "Bernanke algorithm".......

 

[OAG]

Just for everyone's information. On how you get all those CD's and that rate. Those 62 CD's have been purchased over the last 10 years. Many of them have been allowed to just roll over at maturity, if the interest rate is good. Also they are at 3 Credit Unions and 1 Bank (Capital One has 10 year CD's; and some time back the rates were good). And yes much of it is at PENFED, and all of the IRA (Traditional and ROTH) are paying 6.25% from now to maturity in 2013. PENFED allowed me me to redeem all of the IRA CD's, without penalty, in late 2006, and then purchase new 7 year CD's at 6.25%. (I think they have changed this policy since then).

One method I have used over the years is that when good rates come about, is to pull interest off of lower rate CD's and then purchase a new CD at the higher rate (usually putting some new money into the pot to increase the size of the new CD). I never redeem a CD early and pay a penalty.

The "ladder" is a little skewed as a true 7 year ladder would be about 14% maturing every year. This one is very heavily weighted to years 6 and 7 (thank you PENFED) with 62% maturing in those two years; which I consider good, at least in the current rate environment.

Hey Nords: I know you were joking about 700 $1K applications at PENFED. I like CD's but not that much. You are right but I can never get enough cash together to take advantage of NFCU's well rated CD's. Just got a couple of Variable Rate ones there currently; but still hopeful.

 

[73ss454]

I guess if I answered the customer service number at VG or Fido, I'd then be a good advisor?

Perfect! I know someone at Vanguard and I think I can put a good word in for you.

 

[Nords]

Hey Nords: I know you were joking about 700 $1K applications at PENFED.

Ya know, if I made that comment in a wardroom full of nuclear submariners they'd all be nodding their heads, thinking "Yeah, I'm so there" and calculating how fast they could punch through the 700 applications. Ideally on a Saturday night so that it wouldn't interrupt their workweek.

No doubt one of us would volunteer to develop a procedure which we could then use as an audit guide to monitor each others' optimum performance of the application process.

But that's just me. And I'm lazier now, so I have our CDs denominated in increments between $5-$10K, about what I'd expect to need to tide us over a cashflow constriction. I think NFCU's asking too much to expect me to commit $20K at once but if they're paying stupidly high rates then I'd sure think hard about it.

Every time I seem to be on the path to a perfectly-incremented CD ladder of 3-, 5-, or 7-year certificates rolling over at 3-6 month intervals, someone puts up an unbelievable offer that causes me to shuffle cash around and disrupt the whole plan...

 

[audreyh1]

Listen - you really did them a big favor. It's great that the head guy was there. I bet they really learned something - especially about their competitive situation.

They should have taken you out to lunch!

Audrey

 

[OAG]

Listen - you really did them a big favor. It's great that the head guy was there. I bet they really learned something - especially about their competitive situation.

They should have taken you out to lunch!

Audrey

Lunch? When we left my wife said "Cheap Bas****'s -- did not even offer coffee". My response was "Well Honey, after all it is a Bank!"

 

[FinanceDude]

Perfect! I know someone at Vanguard and I think I can put a good word in for you.

No thanks, I'm overqualified.......

 

[mn54]

It just shows you get what you paid for with a "free" review, a sales pitch for their products. How do you keep track of all those cd's?

 

[OAG]

It just shows you get what you paid for with a "free" review, a sales pitch for their products. How do you keep track of all those cd's?

Excel Spread Sheet. Sub-totaled by institution, and totaled. Right to left for each CD -- ID (CD Number), CU or Bank, Owner (DW or myself), Purchase Date, CD Type (IRA by type or Ownership (JNT, IO or POD)), Term in months, Current Value (Updated Monthly from CU/Bank Statements - all on-line date), Maturity date, APY, APR, Annual Earnings, Monthly Earnings, Monthly withdrawals (if any), Net Monthly Earnings, Total Earnings (to maturity), Days to Maturity, and finally Maturity Value. Keeps it pretty simple and easy to update a couple of other fields (current date and year end date) provide some basis to calculate other "nice to know" stuff. Also maturity date allows you to build a ladder chart to see actual maturities by future year. Really pretty simple and can be printed (in somewhat small, but readable print) on two Landscaped pages.