Author Topic: Professor has $1million in a BOFA Checking account  (Read 5517 times)

senecando

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Professor has $1million in a BOFA Checking account
« on: February 18, 2014, 11:09:11 AM »
http://www.fool.com/investing/general/2014/02/16/man-pulls-1-million-from-bank-of-america-but-compl.aspx

What? I guess he might have a hundred million in stocks somewhere, but it still seems insane to me to give BOFA a million bucks to look after.

(Maybe it's a BOFA savings account. In my experience, there is no real difference between the two, aside from the fact that the savings account is more restricted. Maybe the interest rate is four millionths of a percent higher.)

(This could maybe be in another section.)
« Last Edit: February 18, 2014, 11:14:33 AM by senecando »

Jamesqf

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Re: Professor has $1million in a BOFA Checking account
« Reply #1 on: February 18, 2014, 11:26:15 AM »
Yeah, if he keeps $1 million in a checking account, we already know he's an idiot :-)

frugalecon

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Re: Professor has $1million in a BOFA Checking account
« Reply #2 on: February 18, 2014, 12:40:02 PM »
Yeah, if he keeps $1 million in a checking account, we already know he's an idiot :-)

But that raises the question of how much in relatively liquid cash is sensible to keep around. I have about $120k, about 3/4 in CDs of various maturity and about 1/4 in shorter term savings. It only generates a few thousand dollars/year in interest, but it means I can easily buy a car with cash if need be, or pay for major home repair (new roof), or even buy a piece of undeveloped land if I want to (thinking ahead to where I might want to live after I retire). Or, heaven forbid, manage an unexpected spell of unemployment.

Most of my savings are in stocks, but I sleep better with some cash.

Jamesqf

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Re: Professor has $1million in a BOFA Checking account
« Reply #3 on: February 18, 2014, 03:28:46 PM »
But that raises the question of how much in relatively liquid cash is sensible to keep around.

Depends on your definition of 'liquid'.  For me, it's the next couple of months mortgage & bills in checking/savings, plus around $15K in a fairly stable growth/income fund.  I think that's more than most should have, but I'm self-employed and monthly income varies a lot.  Unexpected expenses are why they make '0% interest for the next year or so' credit cards :-)

Albert

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Re: Professor has $1million in a BOFA Checking account
« Reply #4 on: February 18, 2014, 03:48:38 PM »
Not particularly smart sitting on such a large amount of cash, but still I bet he is doing better financially than >95% of retirees.

chucklesmcgee

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Re: Professor has $1million in a BOFA Checking account
« Reply #5 on: February 19, 2014, 01:06:17 PM »
Yeah, if he keeps $1 million in a checking account, we already know he's an idiot :-)
...but it means I can easily buy a car with cash if need be, or pay for major home repair (new roof), or even buy a piece of undeveloped land if I want to (thinking ahead to where I might want to live after I retire). Or, heaven forbid, manage an unexpected spell of unemployment.

Most of my savings are in stocks, but I sleep better with some cash.

$120k in index funds can be easily liquidated and transferred to your checking account in 3-4 days. I don't understand your reasoning. Are you going to buy a car or a piece of land tomorrow? If not, why keep $120k in accounts that are losing value? Nothing you mentioned requires cash immediately and you're paying a big price for that.

dragoncar

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Re: Professor has $1million in a BOFA Checking account
« Reply #6 on: February 19, 2014, 01:35:03 PM »
I'll put this here (again) http://gawker.com/5816745/this-100-million-atm-receipt-will-make-you-hate-yourself

Liquid cash depends completely on what you plan to do with it.  If you are waiting for the real estate deal of a lifetime, having $1 million in checking can make sense. 

Fireman

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dragoncar

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