Author Topic: Putting money to work  (Read 3171 times)

fetch321

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Putting money to work
« on: July 23, 2016, 07:31:52 AM »
In this low interest rate environment where have you guys been putting money to get any rate of return.

Have about 60k languishing at Allay Bank at 1 percent that I would like to do something with.

As far as I see it potential options are:  more 1 percent, cds, bonds, vanguard fund of some kind, dividend etf like SPY.  Anything I'm missing here?

For vanguard my retirement accounts are in total stock index and interntional stock index.  Is there any vanguard fund I dont' know know about that produces a higher rate of return than that 1 percent I keep talking about yet at the same time is relatively stable, or should I just go with the standard total stock? Little nervous about hopping in.

For some reason have been intrigued by a dividend etf such as SPY.  This was based off reading blogs talking about the wonders of income streams, and also guys like Malkiel and Siegel have been recommending dividend aristocrat.  This might be a little irrational in that after having straight index in my retirement accounts, it was like I was feeling that I should do something different here.

Anyway, curious on thoughts of what you guys have been doing to get a better return.   


 

kpd905

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Re: Putting money to work
« Reply #1 on: July 23, 2016, 07:57:41 AM »
Do you need 60k in cash?  How many months of expenses is that for you?

markpst

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Re: Putting money to work
« Reply #2 on: July 23, 2016, 09:28:59 AM »
I don't see anything wrong with keeping money at Ally like that in that amount. I have money there as well. My plan for that money is to obviously keep some for emergency expenses, but also to "buy the dip" if the stock market should go down considerably.

I have $410K in investments and about $42K in money market accounts. I do need some of the money market funds to do some home remodeling in order to sell my house and then move somewhere smaller (1 bedroom apartment). I also have a 16 year old car that works fine, but I know it will need to be replaced someday.

Radagast

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Re: Putting money to work
« Reply #3 on: July 23, 2016, 04:59:52 PM »
If you are looking for a single Vanguard fund, the target retirement income and target allocation income (name?) funds, with 30% and 20% stocks respectively, are pretty stable while producing decent returns. You could argue that they are not tax efficient, but you will still be making more money usually, with little risk of significant loss.

Personally, I plan to save for a house by starting with 100% stocks (VTI, VEA,VWO) and use the value averaging strategy by buying or selling each of these to create a 2% real increase per quarter. The rest of the money I will put in treasury bonds, such that in about 8 years I will have a about 20% stocks and 80% bonds, but the stocks will have been purchased as efficiently as possible.

Retire-Canada

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Re: Putting money to work
« Reply #4 on: July 23, 2016, 05:46:59 PM »
Anyway, curious on thoughts of what you guys have been doing to get a better return.

What have I been doing to get a better return? Not holding any cash at all. I'm 100% stocks at the moment and my emergency fund is a $30K line of credit.

fetch321

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Re: Putting money to work
« Reply #5 on: July 24, 2016, 07:03:44 AM »
Thanks for the replies.  Every time I see that Ally statement was hoping to eke out a few extra percent.  Shows how effective the feds policy is where it's making me want to throw the money into the market.  Will probably put a small chunk into a dividend etf and let the rest sit.

kpd905 -- based on my families spending and how low we have expenses we only need about 20k for emergency fund. 

the_grillman

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Re: Putting money to work
« Reply #6 on: July 24, 2016, 04:40:56 PM »
It say it depends on how much effort you want to go to.

For simple bank account, there are a couple that are marginally higher interest rates than Ally (Incredible Bank).

There are some financial institutions (Consumers Credit Union) that give a up to 4.xx% but you have to jump through hoops (min# debit transactions, ATM transactions, direct ACH).

There used to be some pre-paid Visa/MC debit cards that came with a linked savings account that offered 5% on the first $5k.  They unfortunately just reduced it back to $1k but if you are interested, google NetSpend, Brinks Prepaid, or Mango Money and there are tonnes of websites with info about these.

okits

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Re: Putting money to work
« Reply #7 on: July 24, 2016, 08:29:55 PM »
What's your timeline like?  When do you need the $60k (is it a college fund?  House down payment?  Or just a chunk of your stash)?

My total portfolio distributes about 3%.  I'm confident that in the long term my initial investment in index ETFs will grow, so while the day-to-day value isn't very stable, I'm getting a lot better than 1% distribution (and no capital growth) for a (long-term) pretty safe bet.

fetch321

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Re: Putting money to work
« Reply #8 on: July 25, 2016, 07:21:17 AM »
Just part of stash.  College fund funded, and house paid off. 

Was looking at SDY this morning and it's almost up 15 percent for the year, so might be waiting for a dip if I do that one.

Heckler

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Re: Putting money to work
« Reply #9 on: July 25, 2016, 07:58:46 AM »
http://www.etf.com/SDY

Looking at that five year chart, youll be waiting a while for that dip. Put those lazy workers on the job!
« Last Edit: July 25, 2016, 08:09:53 AM by Heckler »

Fishindude

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Re: Putting money to work
« Reply #10 on: July 25, 2016, 08:15:48 AM »
I am in a similar scenario.  We carry no debt and feel like I already have plenty working in the stock market.  Don't feel great about putting more in stocks, however hate to just put in 1% CD's or savings accounts.   Really leaning towards some east to manage business investements