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Re: Savings?
Old 07-09-2004, 11:16 AM   #81
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Re: Savings?

Just keep this in mind with regards to MM funds.

Several times in the past the "unthinkable" occurrence of a MM fund devaluing the principal below a dollar has happened, and the fund owners dug into their own pockets to mask the situation and maintain the appearance of near zero risk.

Some economic projections are getting kicked around talking about the extreme debt, variable rate loans, and whatnot perhaps producing another shortage of cash and conditions that might put some pressure on that "maintaining a dollar as a dollar" in MM funds. Presumably the fund folks will do what they can to maintain the principal, as they have in the past.

Presumably.

And of course, depending on who you talk to, the time of day, and phase of the moon, you will have all sorts of lively discussion on whether we ever did or ever will again see markdowns on MM principal.
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Re: Savings?
Old 07-09-2004, 01:46 PM   #82
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Re: Savings?

Quote:
OK, I am going to max out my 403b first. *I was told I can contribute $13,000 a year, but I forgot to ask whether that was including what my employer was contributing or just what I was contributing. *Do you guys know?
In 2004 it's safe to go with $13,000 (as long as you earn that much). However, $13,000 is not the limit for many people. If you'll be 50 by 12/31/2004 the limit is $16,000. If you also qualify for the 15 year rule, you can contribute as much as $19,000. The absolute limit is $19,000, not $13,000.
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Re: Savings?
Old 07-09-2004, 03:00 PM   #83
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Re: Savings?

Well, that's a good to know thing about money market mutual funds, but given the extreme unlikiness of it, it wouldnt be a factor I would give much weight. I think its as you said, that the only rare times that a MM mutual fund "should" have dropped below $1, the fund company padded the drop. In other words, it never has happened in practice (to the investment holder).

We're only talking about a few K dollars for an emergency fund anyway, not a place to park major cash, so. And by emergencies, i means those that actually have a reasonable chance of occurring.
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Re: Savings?
Old 07-09-2004, 03:36 PM   #84
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Re: Savings?

Quote:
KB: *If I was making 75K I would consider myself rich, so you can see why ER doesn't seem like an option for me
If I ever made that much in a year, I'd feel rich too! Never did, never will, doing just fine. But I still managed to sock it away and leave what many consider early (52). You are doing just fine

Quote:
Posted by: Maggie D Posted on: Jul 8th, 2004, 11:04pm -- I was told I can contribute $13,000 a year, but I forgot to ask whether that was including what my employer was contributing or just what I was contributing. *Do you guys know?
When I was contributing to a 457, the maximum allowable limit included what the county & I put in. *

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Re: Savings?
Old 07-10-2004, 06:27 PM   #85
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Re: Savings?

http://www.fdic.gov/bank/analytical/...051904fyi.html
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Re: Savings?
Old 07-10-2004, 11:16 PM   #86
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Re: Savings?

Another choice to keep Emergency cash.

http://www.gmacfs.com/notes/demand/

I keep my cash here, it pays 2.5% and only checks of 250.00 or more can be written. *They used to be closed, requiring a referral from a member....but I don't see that mentioned any longer.

I've had an account there for years and even ING can't beat their rates. *They also have Smart Notes, which seem to be similar to Treasury notes.
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Re: Savings?
Old 07-11-2004, 02:40 AM   #87
 
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Re: Savings?

A plug for GMAC, a monster of a company with whom
I've had numerous dealings. They are 100% with me so far. Very impressive. If I get to a point where I can no longer get 3% promo rates for liquid funds, I will check out their rates. I would be really comfortable with them.

John Galt
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Re: Savings?
Old 07-11-2004, 07:50 AM   #88
 
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Re: Savings?

The GMAC Demand Notes are only available to the employees and retirees of General Motors/GMAC and their subsidiaries and their immediate family members (spouse, children, [siblings], parents and [grandparents]), GM Dealers and their employees, GM Stockholders, GM Suppliers/Vendors and their employees, and current customers of GMAC and its subsidiaries.

So this is not for everyone

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Re: Savings?
Old 07-11-2004, 03:04 PM   #89
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Re: Savings?

Maggie,
GMAC Demand notes used to require a referral and they would solicate referrals by paying the referring member. I believe they discontinued that. I found in the investment section the download of the aplication and it asks where people heard about the Notes.

I'll call on Monday and find out if it's open and report back
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Re: Savings?
Old 07-12-2004, 10:44 AM   #90
 
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Re: Savings?

I downloaded the application for the GMAC Demand Notes and it asks for eligibility and the choices are:

1. Salaried employee of GM/GMAC
2. Hourly employee of GM.GMAC
3. GM Dealer Employee
4. GM Dealer
5. Retiree of GM/GMAC or subsidiaries
6. GM stockholder
7. Immediate family member or eligible emplyee or retiree
8. Emplyee of GM/GMAC subsidiary
9. Customer of GM/GMAC or subsidiary
10. Vendor/affiliate of GM/GMAC or subsidiary
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Re: Savings?
Old 07-12-2004, 01:08 PM   #91
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Re: Savings?

Buy one share of GM for $44. Now you're a stockholder and qualify!
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Re: Savings?
Old 07-12-2004, 02:54 PM   #92
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Re: Savings?

I called this morning and Maggie is right. *They are not accepting any referrals..... *Only what Maggie listed.

Sorry about the misinformation. * *For years they were solicating new accounts...........Guess they got enough.
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Re: Savings?
Old 07-13-2004, 07:53 AM   #93
 
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Re: Savings?

I think I'll just buy CDs as a short term investment. I don't need to get at that money right away, so I think I'll do like 5 year CD. Is that a good option? Is 4.7% interest rate good? Does it matter whether it is from a bank located in my state or not?
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Re: Savings?
Old 07-13-2004, 08:04 AM   #94
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Re: Savings?

4.7 is good and bank location isnt relevant.

Two tips: check the policy for interest rate return if you pull your money out of the cd sooner than the full 5 years. I saw one cd yesterday that had you paying back the last six months interest, and I saw another that had you paying back half the TOTAL interest paid.

The first one isnt too bad. If you bail on the cd six months into the third year, you get two years worth at the full rate. If you did the same with the other, you'd get half of 2 1/2 years worth of interest. Not so good.

Its also a good idea to not buy one big cd, but to buy a bunch at the minimum amount so if you need to cash one in, you dont take the interest rate whack on the whole balance.
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: Savings?
Old 07-13-2004, 08:12 AM   #95
 
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Re: Savings?

Thanks for the advice. I am 100% sure that I will not need to take that money out
Anything else I should consider?
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Re: Savings?
Old 07-14-2004, 07:31 PM   #96
 
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Re: Savings?

is this a good offer?

http://www.capitalone.com/investment...20&source=4200
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Re: Savings?
Old 07-14-2004, 08:04 PM   #97
 
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Re: Savings?

Hi Maggie. The offer seems a bit fuzzy to me on the details of the "bump". Also, last time I checked, 4.33%
was not a great rate on a 5 year CD. Otherwise, I see nothing wrong with the concept.

John Galt
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Re: Savings?
Old 07-15-2004, 05:19 AM   #98
 
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Re: Savings?

Yesterday, when I checked it was 4.81%, so I guess it changed already :-/
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Re: Savings?
Old 07-15-2004, 05:27 AM   #99
 
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Re: Savings?

Is 2.1% a good rate for savings account?
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Re: Savings?
Old 07-15-2004, 11:09 AM   #100
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Re: Savings?

I think 2.1 is a good rate for savings. ING pays that right now and it's better than my credit union's savings rate.
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