Money Market Questions.

[Total Sign]

Keep hearing about the "record high money market accounts." Thinking of putting some money into them, hear around 5%.

 

Now, I know 0 about any of this. Always liked keeping cash in a safe, and out of the banks.

 

What questions do I need to ask?

 

Any right amount of time? Don't see myself needing the amount I will put into it for a while.

 

If I get a 1 year account, I can't touch it for a year basically right? Will I lock in the 5% rate? What if rates go up or down?

[iwishiwascool]

Always liked keeping cash in a safe, and out of the banks.

 

Worst.idea.evar.

 

At your age it would be a good start to get a Roth IRA going. It is a post tax retirement investment but you avoid tax on it when you use it post retirement age. You can often use it to help buy your first home in the future if need be.

 

Im no financial advisor but I can refer you to mine if you are interested.

[Total Sign]

Send me his number.

 

Thanks

[mmrmnhrm]

Look into something like a Capital One high yield savings (http://www.capitalone.com/savings/) account. Money Market accounts are *mostly* like savings accounts, with a handful of added rules that change depending on the bank. They're great for "fun" accounts, emergency savings, and general slosh for things like car/house down payments. However, for medium-term (where you won't touch it for *AT LEAST* three to five years) growth, the stock market is almost always better than what a bank can offer you. And for really long-term (as in retirement), iwishiwascool is dead on... Roth IRA ftw. You can have one of those in addition to any 401k/403b (or state plan like PERS and STRS) your employer may offer (you are participating in that too, right?).

[iwishiwascool]

Send me his number.

 

Thanks

 

Her number.

 

[smokinHawk1647545499]

And for really long-term (as in retirement), iwishiwascool is dead on... Roth IRA ftw. You can have one of those in addition to any 401k/403b (or state plan like PERS and STRS) your employer may offer (you are participating in that too, right?).

worst idea evar to drop your own money into those., unless your employer is matching your contribution, its a waste, so much better things you can do with money to make it grow. most those will only get you 7% on a great year and when you figure in taxes and inflation your making very little from it, now that 7% is if its a great year and the stock market doesnt bear.

 

first thing id ask the financial planner is how much she makes from her investments each year, most are just sales people and have no clue on what the're doing, besides ripping you off.

[iwishiwascool]

worst idea evar to drop your own money into those., unless your employer is matching your contribution, its a waste, so much better things you can do with money to make it grow. most those will only get you 7% on a great year and when you figure in taxes and inflation your making very little from it, now that 7% is if its a great year and the stock market doesnt bear.

 

first thing id ask the financial planner is how much she makes from her investments each year, most are just sales people and have no clue on what the're doing, besides ripping you off.

 

 

My favorite type of arguer is the one who bashes your idea with contrived "facts", no proof, and no alternate solution to the question other than "There are so much better things out there".

 

I’ve seen more than 18% growth in my IRA this year which would be by most accounts a bad market year.

 

Just because there are bad apples in the industry, it doesn’t mean that you should pack up your shit and give up on the notion of paying someone to professionally manage your investments.

 

This would be a good place for you to inform the masses what other kind of investments would offer the tax advantages, long-term benefits, AND monetary return on investment... Or you could just drop your knife and get out of this gun fight.

[Stallion Motorsports1647545491]

Watch out for money market accounts that have "limited access". Most are set-up with a 3-5 withdrawl per month, unlimited deposits. If you think you need more than 3-5 withdrawls, watch out for the fees.

 

There are some high interest CD's out now days too. so if you don't need access to the money for 6-12 months, check those out.

 

ex. I will use Ohio Savings Bank, because they advertise in the Dispatch everyday about the "great" CD rates they offer.

Ohio Savings 12 month CD (min. $1000) annual percent 5.5% rate 5.355%

Most Money Markets are at about 4-4.25%

 

tom

[T Rex]

My favorite type of arguer is the one who bashes your idea with contrived "facts", no proof, and no alternate solution to the question other than "There are so much better things out there".

 

I’ve seen more than 18% growth in my IRA this year which would be by most accounts a bad market year.

 

Just because there are bad apples in the industry, it doesn’t mean that you should pack up your shit and give up on the notion of paying someone to professionally manage your investments.

 

This would be a good place for you to inform the masses what other kind of investments would offer the tax advantages, long-term benefits, AND monetary return on investment... Or you could just drop your knife and get out of this gun fight.

 

You make it sounds like 18% is a bad year?! Thats a pretty good year considering the market these days.

 

IwishIwascool, is on the right track for young people. We don't realize the importance of saving our OWN money. With big companies dropping off their severince(sp) pay and retirement programs WE, the employees must take it into our own hands.

 

Im gonna go out on a limb and say that ANY 401k or IRA that your company offers, even without a match, DO IT, and do it as quickly as possible. Time is your friend in your retirement fund.

 

Now, if you are looking for something stable with little to no risk, buy a 5 or 10 year treasury bond. I only recommend this because you are talking little to no risk.

 

If you want a better return, more risk involved, on something shorter talk to a financial advisor or if you are ambitious and want to try something else open an ameritrade, etrade, or schwab account and start trading online.

 

I've taken my own 401k and rolled it into an IRA, not a Roth IRA, and have been using Schwab to trade with it. I didn't fair as good as iwishiwascool though. Only 16%

 

Edit: Money markets are the same thing as a savings account w/ a little higher interest and not FDIC insured!

 

How come you don't like putting your money in banks anyway?

[mmrmnhrm]

I was going to flame smokinHawk mercilessly, but it's already been started. I'd just love to know how you came up with only getting 7% in a "great" year, when since 1926, the S&P 500 (grand-daddy of all market indicies) have had an *average* return of 11% (http://www.fool.com/school/basics/basics01.htm). And take a look at that year... it INCLUDES the Great Depression!! The guys getting 18%? They're doing *very* well for themselves, and I wish you good luck trying to come up with a *LEGAL* way to beat that sort of return without having a lot of free time to devote to research.

[Total Sign]

You make it sounds like 18% is a bad year?! Thats a pretty good year considering the market these days.

 

IwishIwascool, is on the right track for young people. We don't realize the importance of saving our OWN money. With big companies dropping off their severince(sp) pay and retirement programs WE, the employees must take it into our own hands.

 

Im gonna go out on a limb and say that ANY 401k or IRA that your company offers, even without a match, DO IT, and do it as quickly as possible. Time is your friend in your retirement fund.

 

Now, if you are looking for something stable with little to no risk, buy a 5 or 10 year treasury bond. I only recommend this because you are talking little to no risk.

 

If you want a better return, more risk involved, on something shorter talk to a financial advisor or if you are ambitious and want to try something else open an ameritrade, etrade, or schwab account and start trading online.

 

I've taken my own 401k and rolled it into an IRA, not a Roth IRA, and have been using Schwab to trade with it. I didn't fair as good as iwishiwascool though. Only 16%

 

Edit: Money markets are the same thing as a savings account w/ a little higher interest and not FDIC insured!

 

How come you don't like putting your money in banks anyway?

 

I do not have a company offered 401k.

 

Will look into CD accounts tomorrow.

 

I just don't trust the banks. Dont know why, just dont. Trying to get over it, actually making money (1.14% vs 5%) may change my mind.

[mmrmnhrm]

AR, why is it you don't trust the banks? Just on account of the absolutely shitty interest they pay on savings or something else? I'd also suggest you (and anybody else new to investing) to spend a lot of time reading Motley Fool (http://www.fool.com). They do a great job of bringing things down to an understandable level, and while there's often a pitch for one of their newsletters, their free content is well worth the time spent, ESPECIALLY their "Fool's School" series.

[zeitgeist57]

Make sure if you have any cash to put into savings accounts that you review paying off debt first, IMHO. If the only debt you have out (car loans, home mortgages, student loans) are all less than the rate of return on your investment, then you're good.

 

A 12-month, 5.5% CD for $1000 is no good to you if you're paying 18% every month for $1000 in credit card exposure.

[smokinHawk1647545499]

My favorite type of arguer is the one who bashes your idea with contrived "facts", no proof, and no alternate solution to the question other than "There are so much better things out there".

I’ve seen more than 18% growth in my IRA this year which would be by most accounts a bad market year.

Just because there are bad apples in the industry, it doesn’t mean that you should pack up your shit and give up on the notion of paying someone to professionally manage your investments.

This would be a good place for you to inform the masses what other kind of investments would offer the tax advantages, long-term benefits, AND monetary return on investment... Or you could just drop your knife and get out of this gun fight.

i wont bring a knife to this gun fight, im bringing a nuke.

looking at several investment vehicles the one that brings the most to the table would be real estate. when comparing cash on cash returns and other benifits real estate can outperform stocks and other investment vehicles over ten times over. though its not for the faint of heart, but are stocks when you give your money to some investment firm or watered done mutial fund that you hold and pray it does well, and when you find out if or not it has done well its to late to recoop your losses.

all the investment books and advisors ive talked to have stated for long term stock you can expect 7-10% average growth over the lifetime, sure some will do better and some will do worse, but its a proven fact that monkeys can pick better stocks then most finiacial advisors. how do you structure yourself to do the high end of the averages? most finacial advisors are sales men, good luck finding one that practices what he preaches

my 401k growth is a joke, the way i have it diversified alows stediy growth, but its very slow do to the market ups and downs. ive been contributing in it for about 8 years (6% at 50% match) and only have like 33k in it. I dont think its going to allow me to retire how i want to.

I'll tell you guys straight up, I plan on retiring in 10 years with a $200k a year retirement plan thats indexed toward inflation with only $10k initial investment, can your roths, 401k's and money market accounts do that

[T Rex]

Smokin, I agree with a lot of what you said except for 2 points.

 

Real Estate is going to take a MASSIVE shit here in about 5-8 months. You can already tell by just picking up a Columbus Real Estate Magazine. Houses that where going for 400k+ are going for almost 300k. Ask Chris Green about his neighborhood and all the POS that bought houses up there and are now defaulting on their loans cause they have a house that isn't worth what they paid for it.

 

Never invest money and leave it there. That is the biggest mistake anyone can make, and unfortunatly our generation has been brought up with "buy and hold" mentality. We need to "Buy and Research." Its a simple fact that a stellar company isn't always going to be stellar. Change is the nature of everything.

 

AR I don't care to much for CD's either but, if you have good advice from someone in the buisness then go for it.

 

I guess my other question is Banks issue CD's, for not trusting banks you are still investing in them. Here is some info on CD's (Although Im sure you have researched them) http://banking.about.com/od/cds/a/bankcdrates.htm

 

I hope this helps. Im not trying to start a pissing match, just trying to share my own personal knowledge. Im still new at this game though, only started a year ago.

[El Karacho1647545492]

Take all your money and invest it in one company, like American Airlines. Be sure to take out a loan of at least $100,000 and invest it on margin. In fact, if you can mortgage a house that'd be ideal. This is the foolproof way to become a gazillionaire.

[excell]

Ask Chris Green about his neighborhood and all the POS that bought houses up there and are now defaulting on their loans cause they have a house that isn't worth what they paid for it.

 

*sigh*

[T Rex]

Take all your money and invest it in one company, like American Airlines. Be sure to take out a loan of at least $100,000 and invest it on margin. In fact, if you can mortgage a house that'd be ideal. This is the foolproof way to become a gazillionaire.

 

LMAO!!!! bwahahahahahahahahahahahahah

 

Sorry Chris, Ive heard from one of my friends that houses up in Powell are starting to get hit hard. You are the only one that I know that lives up there right now.

[excell]

Sorry Chris, Ive heard from one of my friends that houses up in Powell are starting to get hit hard. You are the only one that I know that lives up there right now.

 

I live in Galloway.

 

But it's hit just as hard...

[iwishiwascool]

i wont bring a knife to this gun fight, im bringing a nuke.

looking at several investment vehicles the one that brings the most to the table would be real estate. when comparing cash on cash returns and other benifits real estate can outperform stocks and other investment vehicles over ten times over.

 

The fact that you think real estate (in this down turning market or any market) is the best place for a 19 year old to put a few extra thousand dollars negates your entire argument. The whole purpose of your statements very transparently geared towards the self aggrandizement of your financial pseudo-savvy.

 

There are many a folks that "plan" to have amazing retirement accounts with tiny initial investments that find themselves leaching off of social security as much as the next guy. I guess we'll find out in 10 years.

[mmrmnhrm]

Whatever smokinHawk is smoking, get me the hell away from it, cause it's done gone fried all his neuron. Real estate being the ultimate investment vehicle? Shit, he must work for the NAR, and actually believe the spin they push. You thought the tech bubble bursting was bad, this RE burst is going to be a hell of a lot worse for a whole lot more people.

[mmrmnhrm]

It's slightly past midnight, but what can I say... there's a cute girl running around in my head that won't let me sleep. So I decided to throw more ice on Hawk's blunt. Doing a Google search for just "average real estate returns", the very first hit turns up this: http://www.internet2.edu/~shalunov/stock-market/

 

For those without the patience to read the whole thing, here it is:

Average annual inflation 1913-2002: 4.240%

Average annual growth 1929-2002: 3.331%

Average real stock returns 1913-2002: 2.738%

Average real stock returns 1913-1991: 1.269% (this is for folks who think the tech boom was an anomaly, though I suppose if that were the case, the 1920s should also have been discounted)

Average real real estate returns 1975-2002: 0.635% (Housing numbers weren't collected before 1975)

 

So let's see here... Taking the crummy number, stocks do twice as well as real estate. Taking the good number, they're over four times as good. They both beat inflation (if they didn't, the number would have been negative), but I know where my money's going to grow

 

This public service announcement brought to you by, well, I'm not going to tell you her name

[smokinHawk1647545499]

ahahhhaa

 

i hope the real estate market crashes and crashes hard, that would allow for me to become richer faster. to bad you guys can only concieve making money in an Bull market.

 

T rex, definatly agree on keeping the money moving, doing that will keep your money value moving up instead of letting inflation eat away at it.

unfortunatly my 401k plan does not allow me to move my money around like i would like, instead it sits in a few watered down mutial funds, that does not increase more then inflation. i thinks its only about 1-2% higher then what was contributed, pretty sucky, when i retire id probably have to live like i was only on social securtiy (and ofcoarse that wont be there when i retire)

 

you need to open your mind a little bit and see the possiblities, the real estate investing has nothing to due with the values you are talking about. Im talking cash returns on cash put it, If it crashes i get more for my money, thats why i hope the market crashes hard, and your right it probably will drop soon, the number of houses forsale compard to buyers is awsome right now, i just hope interest rates stay low too.

and thats not even considering the tax benifits, think of making millions of legally tax free money. every dollar you earn, about $.50 gets taxed, id make that $ virtually tax free, legally ofcoarse.

 

if you guys think im nuts hey thats fine, just one thing.....picture my rollin'

[iwishiwascool]

Smart guy,

 

I am not negating the potential lucrative returns on real estate. I am closing on my first investment property shortly. Sometimes you have to put the situation before your ego and realize that the answer to his question is not what may have worked for you at 28 years old. He is 19, not working with a lot of money, and if he is looking at money markets I would surmise that high risk ventures are not what he is looking for. Realize that every thread is not an opportunity to flex your e-penis and you might actually bring something to the community... you idiot.

 

Love,

Ken