Author Topic: Where to stash 300k for 6-12mo  (Read 1482 times)

Jrobin276

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Where to stash 300k for 6-12mo
« on: August 06, 2017, 09:53:14 PM »
Like it says on the lid: unexpected inheritance, needs stashed (in Australia) for 6-12mo while we work out a longer term plan. (No debt a all, nothing desperate needs fixed; separate retirement, separate emergency fund). Any recommendations?


radram

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Re: Where to stash 300k for 6-12mo
« Reply #1 on: August 06, 2017, 10:33:48 PM »
Don't know anything about the Australian options.  Here in the US, I would go with a short term CD from a bank.

Are you eligible for this:
https://australia.deposits.org/deposits/ubank/

If so, the 6 month and 1 year are paying the same (2.71 %).  I would put it there.

The CD's here are paying 1.4% for a 1 year CD.

CrispySub

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Re: Where to stash 300k for 6-12mo
« Reply #2 on: August 07, 2017, 01:06:53 PM »
I am also not sure about the Australian aspect, but if in the US, I would:

Put $100,000 in StreetShares Veteran Bond.  It pays 5% interest accumulated daily (and has a bonus of $1000 for 100k). If you withdraw before 12 months, you face a 1% fee (essentially the bonus).  At 6 months, that is 2.5% return on your investment and 12 months is a 6% return.

I would put the other $200k into Motif Investing.  Scroll through the community Motifs and find a low volatility bond or stock mixture motifs to your liking.

You could also set some aside to make your home more energy efficient (solar panels, heater, etc.)

If it truly is long term investments you are looking for, you could always buy parts of the New Zealand forest for lumber yield in a decade or two.

2Birds1Stone

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Re: Where to stash 300k for 6-12mo
« Reply #3 on: August 07, 2017, 02:05:27 PM »
I am also not sure about the Australian aspect, but if in the US, I would:

Put $100,000 in StreetShares Veteran Bond.  It pays 5% interest accumulated daily (and has a bonus of $1000 for 100k). If you withdraw before 12 months, you face a 1% fee (essentially the bonus).  At 6 months, that is 2.5% return on your investment and 12 months is a 6% return.

I would put the other $200k into Motif Investing.  Scroll through the community Motifs and find a low volatility bond or stock mixture motifs to your liking.

You could also set some aside to make your home more energy efficient (solar panels, heater, etc.)

If it truly is long term investments you are looking for, you could always buy parts of the New Zealand forest for lumber yield in a decade or two.

This product looks very interesting, why wouldn't everyone jump on for a guaranteed 6% ROI in 12 months?!?!
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arcyallen2

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Re: Where to stash 300k for 6-12mo
« Reply #4 on: August 07, 2017, 07:30:55 PM »
The ONLY thing I'd do with that money is a cash/equivalent/money market, or a CD. Do not buy any stock or bond based investments! They can and will fluctuate, and you'll be a bit "unhappy" if the next 6-12 months brings you anything less than 0% returns. No matter how solid a stock/bond investment seems, it's intended as a long term investment.

"This product looks very interesting, why wouldn't everyone jump on for a guaranteed 6% ROI in 12 months?!?!" - as soon as you ask yourself that question, you should know to proceed reeeeaaal slowly.

Mr. Green

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Re: Where to stash 300k for 6-12mo
« Reply #5 on: August 08, 2017, 09:53:37 AM »
"This product looks very interesting, why wouldn't everyone jump on for a guaranteed 6% ROI in 12 months?!?!" - as soon as you ask yourself that question, you should know to proceed reeeeaaal slowly.
+1.

My first thought was "Red flag!"
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pumpkinlantern

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Re: Where to stash 300k for 6-12mo
« Reply #6 on: August 08, 2017, 10:25:03 AM »
Agree with above.

Cash equivalent with interest that will guarantee/insure the principal.  Money market fund, high interest savings, GIC, etc.  6 months is too short for anything else.

CrispySub

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Re: Where to stash 300k for 6-12mo
« Reply #7 on: August 08, 2017, 01:11:49 PM »
I am also not sure about the Australian aspect, but if in the US, I would:

Put $100,000 in StreetShares Veteran Bond.  It pays 5% interest accumulated daily (and has a bonus of $1000 for 100k). If you withdraw before 12 months, you face a 1% fee (essentially the bonus).  At 6 months, that is 2.5% return on your investment and 12 months is a 6% return.

I would put the other $200k into Motif Investing.  Scroll through the community Motifs and find a low volatility bond or stock mixture motifs to your liking.

You could also set some aside to make your home more energy efficient (solar panels, heater, etc.)

If it truly is long term investments you are looking for, you could always buy parts of the New Zealand forest for lumber yield in a decade or two.

This product looks very interesting, why wouldn't everyone jump on for a guaranteed 6% ROI in 12 months?!?!

The veteran bond product is not guaranteed.  Reading the website, it's essentially the same thing as lending club.  You provide loans for veteran own businesses.  It's not FDIC insured.  I wouldn't do this.

It isn't quite lending club as you are not providing loans to anyone.

The bonds are to the company which then use the funding (along with other funding sources) to back a variety of short term loans on preferred small businesses (some Veteran SMBs get preferential treatment in numerous areas, especially government services and typically have a higher success rate than non-Veteran businesses). The terms of repayment are not based upon any one, group of, or even all of their loans, but the company this self. So if every business does not pay their loans, StreetShares still owes the interest payments. The company also has a provisional fund set aside to stabilize or ensure a lower risk of complete failure.

In short, we get 5% returns on a vetted vet investment that yields the company >9% backed by a provisional fund as an "insurance like policy".  The company is relatively new, just like most companies trying to apply the JOBS act or prepare for the future vice more traditional financial services.  So no, it isn't like lending club.

mjr

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Re: Where to stash 300k for 6-12mo
« Reply #8 on: August 08, 2017, 02:00:24 PM »
6-12 months is pretty short.  You're talking Term Deposit here - you'll get 2.5%, maybe 3%.

Indexer

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Re: Where to stash 300k for 6-12mo
« Reply #9 on: August 08, 2017, 08:04:11 PM »
+1 to putting is in a money market or penalty free CD with a good interest rate.


Quote from: CrispySub
Put $100,000 in StreetShares Veteran Bond.  It pays 5% interest accumulated daily (and has a bonus of $1000 for 100k). If you withdraw before 12 months, you face a 1% fee (essentially the bonus).  At 6 months, that is 2.5% return on your investment and 12 months is a 6% return.

If something seems to good to be true... it is. This is especially true in the investing world where everyone is competing for the best risk adjusted return. Look at it from the other side. WHY would they pay 6% on something low risk? Safe short term investments are paying 1-2%, 2-3% if you look at high quality intermediate term bond funds. If this StreetShares was low risk they would have an easy time finding investors at 3% or 4%. Hell, institutional investors would drop billions in something low risk paying 3-4% right now. The fact that they are paying 6% means the smart money said NO at 3%, NO at 4%, and NO at 5%. 6% is a higher yield than many high yield(JUNK) bond funds. I would treat the risk on this the same as a high yield bond paying 6%. Sure it could be a small part of a well diversified portfolio, but it is not somewhere I would park 100k for 6-12 months.

Anon in Alaska

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Re: Where to stash 300k for 6-12mo
« Reply #10 on: August 11, 2017, 04:33:02 AM »
Like it says on the lid: unexpected inheritance, needs stashed (in Australia) for 6-12mo while we work out a longer term plan. (No debt a all, nothing desperate needs fixed; separate retirement, separate emergency fund). Any recommendations?

Can you make up your mind any faster? If you can get 1.25 from a CD and 5.25% in a real investment than you're loosing 4% a year every day you don't invest it. That's an opportunity cost of $12,000 a year, or $32.85 a day.
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Freshwater

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Re: Where to stash 300k for 6-12mo
« Reply #11 on: August 15, 2017, 01:31:54 AM »
Sorry only just saw this - if you put Australia in the title Aussies will find it more easily :)

Citibank have a 3% offer on their 6 month TD at the moment (new business only). That's the best rate out there for short term deposits. Other than that, look at bonus interest rates on online saver accounts. I'm sure I saw one somewhere that offered 2.9 or 3% for four months. My bank CUA will give 2.75% if you deposit a regular amount. Also - look at Ratesetter P2P. Their one month loan pays about 4% - the catch is that a one month loan can be up to 2 years (if there are no one month lenders to 'take over' the loan when your lending term is up) so I would only put a small amount.

ChpBstrd

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Re: Where to stash 300k for 6-12mo
« Reply #12 on: August 15, 2017, 12:24:38 PM »
I'm not sure I understand the reason for the timeframe. Do you need more time to make a decision about what to invest in or by longer-term-plan are you thinking about a charitable donation, foundation, endowment, gift, or small business? What's the acceptable level of risk? Also, you'd sit in cash if you didn't expect some ROI. How much ROI is worth the trouble?