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Old 11-22-2010, 10:11 AM   #1
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Fixed incomes

Hi all:

This question may have been asked before but beside CD which is currently at next to nothing. I have about 200K cash that I want to put to work.

What type of investments do you recommend that can generate 3 to 5 percent return and distributed quarterly with minimum risk.
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Old 11-22-2010, 10:17 AM   #2
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Originally Posted by huusom View Post
Hi all:

This question may have been asked before but beside CD which is currently at next to nothing. I have about 200K cash that I want to put to work.

What type of investments do you recommend that can generate 3 to 5 percent return and distributed quarterly with minimum risk.
Look at preferred stock. You can put 1/2 of what you have at risk in preferred stocks and the other 1/2 in safe cds, that would put your overall rate of return into the range you are looking for.
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Old 11-22-2010, 10:56 AM   #3
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150K Penfed 7 yr @ 3.49%, 25K AWF (pays monthly), 25K in T or VZ or AEE or FE or any utility that pays 5-6%. You can also sell covered options on the utility to increase return a little.
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Old 11-22-2010, 01:35 PM   #4
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What type of investments do you recommend that can generate 3 to 5 percent return and distributed quarterly with minimum risk.
I think you need to clarify to us posters what you mean by "minimum risk"-- do you mean "no volatility" or "insured by the FDIC" or "AAA rated" or "I need the principal back by a certain date"?

With the info you've provided, I'd recommend the PenFed 7-year CD. I'm not sure you can arrange quarterly distributions (perhaps monthly?) but they might be able to work that out by e-mail.
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Old 11-22-2010, 02:42 PM   #5
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[QUOTE=Nords;1003604With the info you've provided, I'd recommend the PenFed 7-year CD. I'm not sure you can arrange quarterly distributions (perhaps monthly?) but they might be able to work that out by e-mail.[/QUOTE]

Is PenFed open to anyone or do you have to be employed, past or present, by the federal government?
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Old 11-22-2010, 02:47 PM   #6
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Aaron, do a forum search on Penfed membership. We've discussed how anyone can join at least a dozen separate times.
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Old 11-22-2010, 03:26 PM   #7
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Well might wish in part to consider a fund, like VFICX, Vanguard Intermediate Investment, which is paying 4.53%, has average credit per Morningstar as A and average bond duration of 5.4 years. I have Penfed CDs and they tend to be competitive rates. If buy long term can also sell and pay penalty. Anyhow, hope this helps for your consideration.

Bob
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Old 11-22-2010, 04:58 PM   #8
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Is PenFed open to anyone or do you have to be employed, past or present, by the federal government?
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Aaron, do a forum search on Penfed membership. We've discussed how anyone can join at least a dozen separate times.
Well, REWahoo!, as a fellow moderator emeritus yourself, you know that nobody reads the f#$%in' FAQs, or searches for keywords in previous threads, let alone reads our posts PenFed membership is open to anyone who meets their criteria or makes a one-time contribution to certain non-profit associations:
https://www.penfed.org/howToJoin/overview.asp
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Old 11-22-2010, 05:05 PM   #9
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Hello Huusom - have you thought about municipal bonds ?

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What type of investments do you recommend that can generate 3 to 5 percent return and distributed quarterly with minimum risk.
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Old 11-22-2010, 05:30 PM   #10
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I take calculated risk. I'm into MLPs.
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Old 11-22-2010, 07:25 PM   #11
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I take calculated risk. I'm into MLPs.
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Old 11-23-2010, 08:23 AM   #12
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Well might wish in part to consider a fund, like VFICX, Vanguard Intermediate Investment, which is paying 4.53%, has average credit per Morningstar as A and average bond duration of 5.4 years. I have Penfed CDs and they tend to be competitive rates. If buy long term can also sell and pay penalty. Anyhow, hope this helps for your consideration.

Bob
I try to find the early withdrawal penalty for PenFed CD's. I believe you have to log in to your account to get this information and I am not a member (yet). Can anybody help please.
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Old 11-23-2010, 10:04 AM   #13
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Hello Huusom - have you thought about municipal bonds ?
I'm open to all suggestions. My main reason for this is post is for me see if I can generate enough reqular income from my cash in order to ER in a couple of years without loss of principle. I understand there risks in any type of investments but I dont want to take too much chance with the stock market.

To be specific, I need to generate around 3K per month to live reasonably well (not much but I'm not a big spender). How much principle do I need to generate this kind of incomes?

Thanks,
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Old 11-23-2010, 12:15 PM   #14
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I try to find the early withdrawal penalty for PenFed CD's. I believe you have to log in to your account to get this information and I am not a member (yet). Can anybody help please.
*Sigh*. Here, let me search PenFed's website for the phrase "early withdrawal". Oh, there it is! Subparagraph "h" on page 2 of this PDF:
https://www.penfed.org/pdf/accountsforms/688.pdf

Hey, mods... how 'bout a FAQ Archive post with links to the membership criteria for PenFed, USAA, and NFCU. We could also include links to the early-redemption penalties for the CDs of those fine institutions.

Or, heaven forbid, we turn the FAQ Archive (which apparently hardly anyone bothers to read) into a E-R.org wiki like the Bogleheads have done with their info.
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Old 11-23-2010, 05:20 PM   #15
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*Sigh*. Here, let me search PenFed's website for the phrase "early withdrawal". Oh, there it is! Subparagraph "h" on page 2 of this PDF:
https://www.penfed.org/pdf/accountsforms/688.pdf

Hey, mods... how 'bout a FAQ Archive post with links to the membership criteria for PenFed, USAA, and NFCU. We could also include links to the early-redemption penalties for the CDs of those fine institutions.

Or, heaven forbid, we turn the FAQ Archive (which apparently hardly anyone bothers to read) into a E-R.org wiki like the Bogleheads have done with their info.
I appreciate your help (despite your sarcasm ). I actually searched the PenFed website before the original posting but it kept asking me to log in.
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Old 11-23-2010, 10:44 PM   #16
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To be specific, I need to generate around 3K per month to live reasonably well (not much but I'm not a big spender). How much principle do I need to generate this kind of incomes?

Thanks,
if i understand your question you want to generate $36,000 per year from fixed income which is $3k per month? at 3%, and you'll be hard pressed to find much higher yield short of junk bonds which i would not suggest, you need $1.2 million and of course you have taxes on that $3k so if you need $3k after taxes then it's a higher amount. hope that is helpful.
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Old 11-24-2010, 07:06 PM   #17
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I try to find the early withdrawal penalty for PenFed CD's. I believe you have to log in to your account to get this information and I am not a member (yet). Can anybody help please.
I logged in but did not see it. Maybe on original documents or I just did not readily locate. Of course the info. may change too. But I googled and this link should give you some information. Said basically Penfed has average penalty of about 6 month interest for long term CDs. But again things always change. Here is link,
Comparing CDs with Different Early Withdrawal Penalties

Bob
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Old 11-24-2010, 08:07 PM   #18
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I appreciate your help (despite your sarcasm ). I actually searched the PenFed website before the original posting but it kept asking me to log in.
We'll get back to you on the sarcasm after you've boosted your post count by a couple orders of magnitude and answered this question a few dozen more times...

Mods, is there a discussion going on about adding a PenFed thread to the FAQs, or creating a wiki?
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Old 11-24-2010, 08:11 PM   #19
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I logged in but did not see it. Maybe on original documents or I just did not readily locate. Of course the info. may change too. But I googled and this link should give you some information. Said basically Penfed has average penalty of about 6 month interest for long term CDs. But again things always change. Here is link,
Comparing CDs with Different Early Withdrawal Penalties

Bob
Thanks, Bob.
the link Nords posted answer the questions. The penalty is 12 month for 7 year certificates and 6 months for up to 5 year certificates.
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Old 11-25-2010, 12:21 AM   #20
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Hello Huusom, According to State municipal bonds are offering decent rates now - USATODAY.com the average rate for munis is about 2.7%, therefore you would need $1.3m to generate 36k income. Does this help ?

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To be specific, I need to generate around 3K per month to live reasonably well (not much but I'm not a big spender). How much principle do I need to generate this kind of incomes?

Thanks,
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