Anyone in All Cash?

[calmloki]

Will cost you about $20-$30 one time to use option #7 on this page, assuming you don't qualify in any other way. Well worth it IMO.

https://www.penfed.org/howToJoin/overview.asp

 

[Pete]

I have been exploring the possibility of going all cash, even though I am years away from early retirement. Are any of you retirees all cash right now?

Many of us in this forum were led here by early retirement books that touted the efficient market theory and suggested investing broadly in cheap index funds. It's very possible we're biased.

There is no shame in playing it safe. Many people are. All the big mutual funds have their treasury funds closed because so many people are trying to get in...into funds that don't pay enough to cover the fees...losing money for safety. What do they know? There have been times recently that cash would've been a great position.

For the moment deflation seems to be ruling. They're giving stuff away in all the stores I visit. My verizon cell phone bill went down 25%. Union grocery stores are getting crushed by tough competition forcing prices down. Dollar menus are expanding. 4 dollar prescriptions, 6 dollar electric can openers, 10 dollar toasters, 40 dollar vacuum cleaners, I got net flix for 8.99 a month..... I just bought a brand new 3000 dollar racing bike for 1000. I'm not affraid of inflation yet...there will be a time though.

"I" savings bonds bonds are paying 3.36% right now, and all the CD's people have suggested here look pretty good to me.

 

[Hamlet]

Coke is paying 3.3%
McDonald's is paying 3.4%
J&J is paying 3.1%
Exxon is paying 2.6%
P&G is paying 2.8%
Kraft is paying 4.1%
Walmart is paying 2.0%

I just can't get excited about buying CD's when the most stable companies in the world pay comparable current rates, have a strong history of increasing those payments over the years, and currently get more favorable tax treatment to boot.

In 10 years, I suspect that a portfolio of strong, dividend paying companies will give you more income than a portfolio of CD's, but to each their own.

 

[floatingdoc]

Yes that is true however, I don't have principle risk.

 

[Jay_Gatsby]

Coke is paying 3.3%
McDonald's is paying 3.4%
J&J is paying 3.1%
Exxon is paying 2.6%
P&G is paying 2.8%
Kraft is paying 4.1%
Walmart is paying 2.0%

I just can't get excited about buying CD's when the most stable companies in the world pay comparable current rates, have a strong history of increasing those payments over the years, and currently get more favorable tax treatment to boot.

In 10 years, I suspect that a portfolio of strong, dividend paying companies will give you more income than a portfolio of CD's, but to each their own.

Except when the favorable tax treatment of dividends goes poof.

 

[freebird5825]

what is COLA'd? thanks

COLA = Cost of Living Allowance
It is applied to pensions, i.e. increased annually by some percentage for the increase in the cost of living. I forget the exact datum used, perhaps the Consumer Price Index CPI ?

A generic definition is found here...
http://en.wikipedia.org/wiki/Cost_of_living

In the particular context of Social Security...
http://www.ssa.gov/OACT/COLA/latestCOLA.html