Comments on: What To Do With $75,000? Ask the M-Network http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/ Thu, 18 Mar 2010 08:58:58 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Erik http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-38173 Erik Mon, 09 Feb 2009 23:58:39 +0000 http://financefreelancelife.com/?p=1292#comment-38173 I would implement a combination of high interest reward checking account (you can do a search through CheckingFinder.com to find the highest rates), reward savings, and possibly a CD (but with the rates dropping like crazy you may want to consider 2 reward checking accounts (typically have $25K limit). Here are a few: Florida Central Credit Union 6.01 First Robinson Savings Bank 6.01 Union State Bank/Bank of Atchison 6.01 Communications Federal Credit Union 5.25 Connexus Credit Union 5.15 Keystone Bank 5.15 First New England Federal Credit Union 5.15 Three Rivers FCU 5.01 Legence Bank 5.01 Community Bank of Pleasant Hill 5.01 Community Bank of Raymore 5.01 United Heritage Credit Union 5.01 I would implement a combination of high interest reward checking account (you can do a search through CheckingFinder.com to find the highest rates), reward savings, and possibly a CD (but with the rates dropping like crazy you may want to consider 2 reward checking accounts (typically have $25K limit).

Here are a few:
Florida Central Credit Union 6.01
First Robinson Savings Bank 6.01
Union State Bank/Bank of Atchison 6.01
Communications Federal Credit Union 5.25
Connexus Credit Union 5.15
Keystone Bank 5.15
First New England Federal Credit Union 5.15
Three Rivers FCU 5.01
Legence Bank 5.01
Community Bank of Pleasant Hill 5.01
Community Bank of Raymore 5.01
United Heritage Credit Union 5.01

]]> By: Carol http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-37738 Carol Thu, 05 Feb 2009 01:29:26 +0000 http://financefreelancelife.com/?p=1292#comment-37738 A fee only financial adviser agrees with Kristy that iBonds are not a bad investment right now. As for MAKING money, that's debatable but they aren't doing too bad right now and would be a safe option. Besides, he can only buy $10,000 per calendar year (if he's married, double that) so it could form part of his plan. From a recent article: The interest rate on I Bonds has two parts: a fixed rate that is assigned at purchase for the life of the bond—this rate is reset for new purchases every six months—and the inflation rate, which is reset every six months for all i bonds, new and exisiting. The fixed rate on new purchases is currently 0.7%. The current inflation rate, based on changes in the consumer price index for urban consumers, is 4.94%. So the composite rate, or the sum of the fixed and variable rates, is 5.64%. These rates are available through April. A fee only financial adviser agrees with Kristy that iBonds are not a bad investment right now. As for MAKING money, that’s debatable but they aren’t doing too bad right now and would be a safe option. Besides, he can only buy $10,000 per calendar year (if he’s married, double that) so it could form part of his plan. From a recent article:

The interest rate on I Bonds has two parts: a fixed rate that is assigned at purchase for the life of the bond—this rate is reset for new purchases every six months—and the inflation rate, which is reset every six months for all i bonds, new and exisiting. The fixed rate on new purchases is currently 0.7%. The current inflation rate, based on changes in the consumer price index for urban consumers, is 4.94%. So the composite rate, or the sum of the fixed and variable rates, is 5.64%. These rates are available through April.

]]> By: mrsmicah http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-37022 mrsmicah Wed, 28 Jan 2009 01:57:38 +0000 http://financefreelancelife.com/?p=1292#comment-37022 @Personal Finance Ology, that sounds like a fun way to use the money but unfortunately it's not very low-risk. If the questioner is set for life, then it certainly could make his life a bit more exciting @Kristy, the reason I recommend fee-only is that they've got less reason to steer you wrong. Free isn't bad, but if you have to spend a lot of time working out what's good and what's trying to make them money, it's a lot of stress and potential for sub-par investing you could avoid. @Tom (comment 3) I'm not really up-to-speed on specific bonds right now, so I definitely recommend that anyone get all the details before investing. @Tom (comment 4), I guess we all want a guaranteed investment where our money can grow substantially. The problem is that most of those are scams...only banks have insurance. It seems their rates weren't high enough. @Personal Finance Ology, that sounds like a fun way to use the money but unfortunately it’s not very low-risk. If the questioner is set for life, then it certainly could make his life a bit more exciting

@Kristy, the reason I recommend fee-only is that they’ve got less reason to steer you wrong. Free isn’t bad, but if you have to spend a lot of time working out what’s good and what’s trying to make them money, it’s a lot of stress and potential for sub-par investing you could avoid.

@Tom (comment 3) I’m not really up-to-speed on specific bonds right now, so I definitely recommend that anyone get all the details before investing.

@Tom (comment 4), I guess we all want a guaranteed investment where our money can grow substantially. The problem is that most of those are scams…only banks have insurance. It seems their rates weren’t high enough.

]]> By: Tom http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-37006 Tom Tue, 27 Jan 2009 21:38:24 +0000 http://financefreelancelife.com/?p=1292#comment-37006 Whoa, no banks?!? Jeeze, no banks, no mutual funds... only want to make money not lose it - I guess that rules out equities since he could very likely lose money. I guess that leave bonds and possibly credit unions. Could maybe get a CD, Reward Checking, or savings/money market account at a credit union that pays 3-5%. That might be too bankish. Any business idea will have risk. Real estate investing has risks too. As far as direct lending I wouldn't go near prosper or anything like that. Seriously, why no banks? Do credit unions count? Whoa, no banks?!?
Jeeze, no banks, no mutual funds… only want to make money not lose it – I guess that rules out equities since he could very likely lose money.

I guess that leave bonds and possibly credit unions. Could maybe get a CD, Reward Checking, or savings/money market account at a credit union that pays 3-5%. That might be too bankish.

Any business idea will have risk. Real estate investing has risks too. As far as direct lending I wouldn’t go near prosper or anything like that.

Seriously, why no banks? Do credit unions count?

]]> By: Tom http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-37005 Tom Tue, 27 Jan 2009 21:18:39 +0000 http://financefreelancelife.com/?p=1292#comment-37005 I-bonds would be an awful place to put your money. The current fixed part of the interest rate is 0% the rest is based on the consumer price index = inflation. This is the part that varies and is currently 5.64%. They use the previous 6 months of data to determine the inflation interest rate. In september the CPI was 218.7 and last month it was 210.2, so there would have to be some pretty decent inflation between now and march to get anything above 0% on I-bonds for the next 6 months. If you don't mind a little hassle, then do the reward checking account route. You should be able to make 5%, but you have to make like 20-30 debit card transactions/month. Apart from that you're looking at 4% max in a CD or savings account. I-bonds would be an awful place to put your money. The current fixed part of the interest rate is 0% the rest is based on the consumer price index = inflation. This is the part that varies and is currently 5.64%. They use the previous 6 months of data to determine the inflation interest rate. In september the CPI was 218.7 and last month it was 210.2, so there would have to be some pretty decent inflation between now and march to get anything above 0% on I-bonds for the next 6 months.

If you don’t mind a little hassle, then do the reward checking account route. You should be able to make 5%, but you have to make like 20-30 debit card transactions/month. Apart from that you’re looking at 4% max in a CD or savings account.

]]> By: Kristy @ Master Your Card http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-36956 Kristy @ Master Your Card Tue, 27 Jan 2009 06:21:30 +0000 http://financefreelancelife.com/?p=1292#comment-36956 I bonds have a pretty decent interest rate right now, but they'll be resetting in May, so there's no telling where they'll go from there. Something else to consider are muni bonds - depending on what investment vehicles you currently have - as they are safe and have some tax sheltering to them. I think the best advice is to speak to a financial advisor - and not even one you have to pay for. Your local bank or credit union should have planners on hand that you can speak to for no fee. They may try to sell you their product, but it's not required for you to see them. Just let them know upfront what you're interested in and that should take care of it! Good luck! I bonds have a pretty decent interest rate right now, but they’ll be resetting in May, so there’s no telling where they’ll go from there.

Something else to consider are muni bonds – depending on what investment vehicles you currently have – as they are safe and have some tax sheltering to them.

I think the best advice is to speak to a financial advisor – and not even one you have to pay for. Your local bank or credit union should have planners on hand that you can speak to for no fee. They may try to sell you their product, but it’s not required for you to see them. Just let them know upfront what you’re interested in and that should take care of it!

Good luck!

]]> By: Personal Finance Ology http://financefreelancelife.com/2009/01/26/what-to-do-with-windfall/#comment-36911 Personal Finance Ology Mon, 26 Jan 2009 18:29:00 +0000 http://financefreelancelife.com/?p=1292#comment-36911 I say figure out a hobby you really enjoy doing and then try to make a business around it. It will give you something to do and could potentially be profitable. That's my game plan for retirement. I say figure out a hobby you really enjoy doing and then try to make a business around it. It will give you something to do and could potentially be profitable. That’s my game plan for retirement.

]]>