Help, I’m in a Money Market and I can’t get out!

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Creditcardguy
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Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
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ruralavalon
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Re: Help, I’m in a Money Market and I can’t get out!

Post by ruralavalon »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
More information is needed: Asking Portfolio Questions. Tax bracket, debt, desired asset allocation, other investments, etc.?

I savings bonds immediately come to mind, for safety. "The composite rate for I bonds issued from May 2021 through October 2021 is 3.54 percent. This rate applies for the first six months you own the bond." Treasury Direct.

"Purchase limits - $10,000 maximum purchase [per person] in one calendar year, with an additional $5,000 in paper I Bonds per Social Security number using your IRS tax refund." $20k now to I Bonds, another $20k in January 2022, plus $5k from any tax refund. The rest in Vanguard Short-Term Treasury Fund Admiral Shares (VFIRX) ER 0.10% or Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX) ER 0.07%.
Last edited by ruralavalon on Sun Oct 17, 2021 9:31 am, edited 1 time in total.
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MotoTrojan
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Re: Help, I’m in a Money Market and I can’t get out!

Post by MotoTrojan »

Money market is a sure-thing ~2% annual loss due to inflation. US treasuries or high-quality corporate bonds will get you closer to 2% but only with significant duration exposure (interest rate sensitivity). Equities would be my bet, combined with shorter-duration bonds, ideally treasuries. Maybe you can determine an % equity she is comfortable with and put the rest in short-duration treasury fund (or even MM if she prefers)? Then the Q is what equity funds... I personally would want to be in value products with some ex-US exposure, but I am biased...
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Kenkat
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Kenkat »

You are probably going to have to take some risk to make 2-4%.

I Bonds, as mentioned above, would be an option. Rates are good right now but you are limited to $10,000 in purchases per person per year ($20,000 for you and your spouse).

A high yield savings account would at least be an improvement over the money market; those are in the 0.4-0.5% range currently.

From there, maybe something like Target Retirement 2030, Lifestrategy Conservative Growth or Wellesley Income might be a conservative way earn additional return - of course with more risk. You would also have to consider taxes with an all-in-one fund
Ed 2
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Ed 2 »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Hello. Tell your wife that you lose 3-4% on inflation actually this year and probably 2-3% following years by keeping all this money on money market. If you actually that risk averse you should put 20K into IBonds this year at least.
Last edited by Ed 2 on Sun Oct 17, 2021 8:52 am, edited 1 time in total.
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Rob5TCP
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Rob5TCP »

Well start with 20k now and 20k in January in Government I bonds -- about as secure as you can get.
Plus look at depositaccounts.com -- many deals over 1% for 3-5 yr cd's and .5 - .6 on money market
accounts. Maybe could take 20% of your money and put that in something a bit riskier but with
better long term returns.
aristotelian
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Re: Help, I’m in a Money Market and I can’t get out!

Post by aristotelian »

Short term corporate bond fund like VCSH or QLTA, or put $100k in total stock index fund with the rest staying in money market or savings?
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Creditcardguy
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

Kenkat wrote: Sun Oct 17, 2021 8:47 am You are probably going to have to take some risk to make 2-4%.

From there, maybe something like Target Retirement 2030, Lifestrategy Conservative Growth or Wellesley Income might be a conservative way earn additional return - of course with more risk. You would also have to consider taxes with an all-in-one fund
Can I do the Target Retirement 2030 and others in a taxable account, or is it just for retirement accounts? Wife may go for that. :beer
cjcerny
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Re: Help, I’m in a Money Market and I can’t get out!

Post by cjcerny »

High yield savings account is the first leap up from where you are now. Zero risk if you stay under the FDIC limit. Short term treasuries are the next leap from there. Mostly short term treasuries plus maybe 10-30% stock is the next leap after that.

From my own personal experience, it is very difficult to get the risk adverse to take any risk. I wasn’t successful at affecting any change. There is some down to earth discussion of inflation out there that might do the trick. The Index Card is a great book. Suze Orman’s The Ultimate Retirement Guide for 50+ also has a very simple explanation of why fighting inflation is so important.
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Kenkat
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Kenkat »

Creditcardguy wrote: Sun Oct 17, 2021 9:00 am
Kenkat wrote: Sun Oct 17, 2021 8:47 am You are probably going to have to take some risk to make 2-4%.

From there, maybe something like Target Retirement 2030, Lifestrategy Conservative Growth or Wellesley Income might be a conservative way earn additional return - of course with more risk. You would also have to consider taxes with an all-in-one fund
Can I do the Target Retirement 2030 and others in a taxable account, or is it just for retirement accounts? Wife may go for that. :beer
Yes, you just have to realize that they will hold bonds that will kick off distributions that will be taxable. This is true of any taxable investment, including your current money market.

There are more conservative options in the Target Retirement series as well - there is nothing to say the one to pick has to match up with your “planned” retirement date.
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Creditcardguy
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

cjcerny wrote: Sun Oct 17, 2021 9:01 am High yield savings account is the first leap up from where you are now. Zero risk if you stay under the FDIC limit. Short term treasuries are the next leap from there. Mostly short term treasuries plus maybe 10-30% stock is the next leap after that.

From my own personal experience, it is very difficult to get the risk adverse to take any risk. I wasn’t successful at affecting any change. There is some down to earth discussion of inflation out there that might do the trick. The Index Card is a great book. Suze Orman’s The Ultimate Retirement Guide for 50+ also has a very simple explanation of why fighting inflation is so important.
Yes, her parents put their savings CD’s at 8-10% in the 1980’s but refused to invest in the stock market when CD’s dropped. We’re going to meet with a financial planner, I’m hoping hearing it from somebody else might loosen her up a little, Happy wife, happy life.
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Brianmcg321
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Brianmcg321 »

Vanguard Life Strategy Conservative Growth

https://investor.vanguard.com/mutual-fu ... view/vscgx
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dukeblue219
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Re: Help, I’m in a Money Market and I can’t get out!

Post by dukeblue219 »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Don't overlook that this is really a relationship question, not a financial question.

Her preference matters as much as yours. If she doesn't want to take any risk then you may have to deal with it.
Blue456
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Blue456 »

Creditcardguy wrote: Sun Oct 17, 2021 9:00 am
Kenkat wrote: Sun Oct 17, 2021 8:47 am You are probably going to have to take some risk to make 2-4%.

From there, maybe something like Target Retirement 2030, Lifestrategy Conservative Growth or Wellesley Income might be a conservative way earn additional return - of course with more risk. You would also have to consider taxes with an all-in-one fund
Can I do the Target Retirement 2030 and others in a taxable account, or is it just for retirement accounts? Wife may go for that. :beer
I would consider putting portion of money into Target Retirement Index Fund
- 50% money market* (every year transfer 20K into I-Bonds)
- 50% VTINX (Vanguard Target Retirement Index)*

*Keep in mind that VTINX lost in 2008 17% of its value, recovered in about 18 months.
Doctor Rhythm
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Doctor Rhythm »

Creditcardguy wrote: Sun Oct 17, 2021 9:00 am
Kenkat wrote: Sun Oct 17, 2021 8:47 am You are probably going to have to take some risk to make 2-4%.

From there, maybe something like Target Retirement 2030, Lifestrategy Conservative Growth or Wellesley Income might be a conservative way earn additional return - of course with more risk. You would also have to consider taxes with an all-in-one fund
Can I do the Target Retirement 2030 and others in a taxable account, or is it just for retirement accounts? Wife may go for that. :beer
Target date funds can be held outside of retirement accounts. There are tax-efficiency issues, since they will hold increasing amounts of fixed income, but that’s the same situation you’re in now with a money market. A TDF 2030 probably has somewhere between 60-70% stock, so it’s not “low risk” in the sense your wife is likely thinking. Even a “conservative growth” fund is around 40%.

As always, use caution when speaking with the “advisor”, especially if they recommend anything you hadn’t considered before or that wasn’t suggested here.
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KingRiggs
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Re: Help, I’m in a Money Market and I can’t get out!

Post by KingRiggs »

Make sure that “advisor” isn’t really a “salesman”.

And if you hear the words “Variable annuity”, run away FAST!
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JoeRetire
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Re: Help, I’m in a Money Market and I can’t get out!

Post by JoeRetire »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Ask your wife what "minimal risk" means to her. Without some risk, you likely can't get 2-4%.
- Online high-yield savings?
- CDs?
- Something with some risk?

It's important to keep your spouse happy, so that you can be happy too.
Last edited by JoeRetire on Mon Oct 18, 2021 6:21 am, edited 3 times in total.
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nix4me
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Re: Help, I’m in a Money Market and I can’t get out!

Post by nix4me »

Vanguard Wellesley fund.

Or

20% VTI
80% VUSB
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Toons
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Toons »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
10 Years??
Vanguard Balanced Index Fund
Put it in a drawer
Reinvest for 10 years
You will be rewarded
:wink:
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ApeAttack
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Re: Help, I’m in a Money Market and I can’t get out!

Post by ApeAttack »

I-Bonds are perfect, as others have mentioned. You can get up to 20k with right away, and another 20k as early as January.

Consider starting off small with putting 10-20% of the 500k in something other than the MM account. Then check how the wifey feels after a month.
May all your index funds gain +0.5% today.
bradinsky
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Re: Help, I’m in a Money Market and I can’t get out!

Post by bradinsky »

You should be able to get about 2 1/2% if you purchase a multi-year guaranteed annuity (MYGA) from an “A” rated insurance company. Check out Blueprint Income or Stan the Annuity Man. Search MYGA in the box above.
Katietsu
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Katietsu »

A no vote for target date 2030. Vanguard target date 2030 is 65% equities. I am relatively risk adverse. I am about your age. I do not even have my retirement accounts at 65% equities. I would be upset if my husband proposed we took money that I wanted safe in a money market and put it in VTHRX. It would also be unsettling to me personally and would not pass the sleep well as night test. Besides, the 2030 fund presumes you will need just a small part of the investment in 2030. If you might need a large part of this then, it would not be matched to your time frame.

I am lucky to be hanging on to some 3% CDs locked in just before the interest rate drop. Some will be expiring soon, I will probably be stuck with 0.5% HYSA. Still better than the essentially zero that I get from my local bank where a keep a chunk of cash that I know I can get to in 15 minutes. I know that 2 to 4% with low risk is only available in my frozen TIAA account.

Sometimes, I think I am an outlier on BH. However, stay around enough and you will find that BH forum members with HYSAs and CDs for a potion of their assets are not unusual.

That said, I am not suggesting that it would be wrong to have a conversation about options other than the money market. But think of the impact on your wife and/or your relationship if your $500k is worth $300 k two years from now and choose the discussion and path carefully. (Aside: My spouse’s first CD from his summer earnings was in a 16% CD.)
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Re: Help, I’m in a Money Market and I can’t get out!

Post by wetgear »

Creditcardguy wrote: Sun Oct 17, 2021 9:00 am
Kenkat wrote: Sun Oct 17, 2021 8:47 am You are probably going to have to take some risk to make 2-4%.

From there, maybe something like Target Retirement 2030, Lifestrategy Conservative Growth or Wellesley Income might be a conservative way earn additional return - of course with more risk. You would also have to consider taxes with an all-in-one fund
Can I do the Target Retirement 2030 and others in a taxable account, or is it just for retirement accounts? Wife may go for that. :beer
Vanguard Target Retirement 2030 is ~ 67% stocks, it's a great fund for many (myself included) but not low risk. You probably also don't want to hold it in a taxable account.
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Re: Help, I’m in a Money Market and I can’t get out!

Post by RyeBourbon »

dukeblue219 wrote: Sun Oct 17, 2021 9:27 am
Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Don't overlook that this is really a relationship question, not a financial question.

Her preference matters as much as yours. If she doesn't want to take any risk then you may have to deal with it.
Consider it money well spent.
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ruralavalon
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Re: Help, I’m in a Money Market and I can’t get out!

Post by ruralavalon »

RyeBourbon wrote: Sun Oct 17, 2021 4:58 pm
dukeblue219 wrote: Sun Oct 17, 2021 9:27 am
Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Don't overlook that this is really a relationship question, not a financial question.

Her preference matters as much as yours. If she doesn't want to take any risk then you may have to deal with it.
Consider it money well spent.
Happy wife, happy life.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Marseille07
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Marseille07 »

ruralavalon wrote: Sun Oct 17, 2021 5:03 pm
RyeBourbon wrote: Sun Oct 17, 2021 4:58 pm
dukeblue219 wrote: Sun Oct 17, 2021 9:27 am
Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Don't overlook that this is really a relationship question, not a financial question.

Her preference matters as much as yours. If she doesn't want to take any risk then you may have to deal with it.
Consider it money well spent.
Happy wife, happy life.
I don't know, the hubby seems frustrated. If it is mutual, they need to find a middle ground such as investing 250K instead of 0K or 500K.
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Kenkat
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Kenkat »

For those suggesting Target Retirement 2030 is too aggressive (you may be correct):
“Kenkat” wrote:There are more conservative options in the Target Retirement series as well - there is nothing to say the one to pick has to match up with your “planned” retirement date.
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Re: Help, I’m in a Money Market and I can’t get out!

Post by egrets »

"Happy wife, happy life."

Isn't it about time to retire this sexist expression?
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Creditcardguy
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

Thanks everyone very helpful. :sharebeer
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Stinky »

bradinsky wrote: Sun Oct 17, 2021 3:14 pm You should be able to get about 2 1/2% if you purchase a multi-year guaranteed annuity (MYGA) from an “A” rated insurance company. Check out Blueprint Income or Stan the Annuity Man. Search MYGA in the box above.
+1
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Re: Help, I’m in a Money Market and I can’t get out!

Post by fposte »

egrets wrote: Sun Oct 17, 2021 6:00 pm "Happy wife, happy life."

Isn't it about time to retire this sexist expression?
"Happy spouse, happy house"?
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Re: Help, I’m in a Money Market and I can’t get out!

Post by muffins14 »

Just try 50 % equities and 50% intermediate treasuries
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nisiprius
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Re: Help, I’m in a Money Market and I can’t get out!

Post by nisiprius »

One of the things that might be worth trying is to make sure your wife has looked at the actual growth charts of pure stock funds, pure bond funds, and various balanced funds. It probably won't work, but try it.

Don't just show her this chart, take her to the live link where she can run the mouse back and forth along the curves and see the dollar numbers go up and down.

Image

Green is stocks.
Yellow is the Vanguard LifeStrategy Conservative Growth Fund.
Red is the Vanguard LifeStrategy Income Fund.
Blue is the Vanguard Total Bond Market Index Fund.

The point is to show her, quantitatively, what it means to say "bonds are riskier than a bank account, yes, but not as risky as stocks." And that "The Vanguard LifeStrategy Income Fund had ups and downs, yet, and fell as much as -16% in 2008-2009. But as you see it was mostly up, particularly over longer periods of time."

In other words, try to get out of the black-and-white distinction, risky and safe, and into trying to form ideas about how risky various kinds of investment are.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
000
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Re: Help, I’m in a Money Market and I can’t get out!

Post by 000 »

Talk to your wife about inflation risk and risk of not having enough to meet your goals.
hudson
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Re: Help, I’m in a Money Market and I can’t get out!

Post by hudson »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
If munis fit your situation, VWIUX is paying out around 2%; the payout is slowly declining towards the SEC yield. There's much more to know.
High yield savings accounts are paying .5%; you would need at least two accounts to cover $500K.
Won't need for 10 years? A ten year individual TIPS. It's a treasury; it keeps up with inflation. There's much more to know.
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Ralph Furley
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Ralph Furley »

Do you have some debt you could pay down / pay off? That could be a guaranteed safe 2-4%.
Dontridetheindexdown
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Dontridetheindexdown »

hudson wrote: Sun Oct 17, 2021 7:18 pm
Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
If munis fit your situation, VWIUX is paying out around 2%; the payout is slowly declining towards the SEC yield. There's much more to know.
High yield savings accounts are paying .5%; you would need at least two accounts to cover $500K.
Won't need for 10 years? A ten year individual TIPS. It's a treasury; it keeps up with inflation. There's much more to know.
In reality, you can keep $500,000 in a single FDIC-insured account, with 2 names on the account.

We keep slightly less than that at a local bank, at .25%, so we "only" get $1250+ compounded interest/annum.

Yes, we could receive more at an on-line bank.

The difference is a rounding error compared with the variation in our net worth at the close of any trading day.

Maintaining funds at a local bank is "priceless" - we sleep well at night.

Some of the wealthiest people I have known were 100% cash.

The question I would pose - is your personal rate of inflation so high that a few thousand dollars, lost or gained. will make a difference in your life?
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Fortune
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Fortune »

Toyota IncomeDriver notes paying @ 1.35%
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Kenkat
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Kenkat »

fposte wrote: Sun Oct 17, 2021 6:23 pm
egrets wrote: Sun Oct 17, 2021 6:00 pm "Happy wife, happy life."

Isn't it about time to retire this sexist expression?
"Happy spouse, happy house"?
Happy husband, happy…umm…let’s see…hmmm - yeah, never mind.
TheDDC
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Re: Help, I’m in a Money Market and I can’t get out!

Post by TheDDC »

egrets wrote: Sun Oct 17, 2021 6:00 pm "Happy wife, happy life."

Isn't it about time to retire this sexist expression?
Hah! No never... those of us who know have the experience/scars to show for it.

OP: Put half in VTSAX/VTIAX and keep the rest in a HYSA or hustle for yield from new bank/brokerage account bonuses. It keeps your life interesting and you wife... happy.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks.
Robert20
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Robert20 »

Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Have you looked at Income ETFs?. JEPI/QYLD/XYLD/SWAN etc. These have downside protection with 5-10% dividends
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Creditcardguy
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Joined: Fri May 25, 2018 7:23 am

Re: Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

Robert20 wrote: Sun Oct 17, 2021 8:28 pm
Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Have you looked at Income ETFs?. JEPI/QYLD/XYLD/SWAN etc. These have downside protection with 5-10% dividends
No, I have lots of homework now.
Topic Author
Creditcardguy
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

Ralph Furley wrote: Sun Oct 17, 2021 7:32 pm Do you have some debt you could pay down / pay off? That could be a guaranteed safe 2-4%.
No debt, but this thread helped with another question I had. I was thinking about a “cash out” refi at 2% 15yr fixed to invest. No need getting a mortgage if I can’t convince the wife to invest any money. We’re overdue to see a financial planner or 3. I just don’t know who the “good ones” are and I’m paranoid. Seems the Boglehead crowd is the wisest group I’ve found.
WhiteMaxima
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Re: Help, I’m in a Money Market and I can’t get out!

Post by WhiteMaxima »

At&T stock pays 8.6% dividend and PE is just 8.
000
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Re: Help, I’m in a Money Market and I can’t get out!

Post by 000 »

WhiteMaxima wrote: Sun Oct 17, 2021 8:41 pm At&T stock pays 8.6% dividend and PE is just 8.
I'm not sure a single stock is a good idea for a risk averse investor.
Topic Author
Creditcardguy
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Creditcardguy »

TheDDC wrote: Sun Oct 17, 2021 8:22 pm
egrets wrote: Sun Oct 17, 2021 6:00 pm "Happy wife, happy life."

Isn't it about time to retire this sexist expression?
Hah! No never... those of us who know have the experience/scars to show for it.

OP: Put half in VTSAX/VTIAX and keep the rest in a HYSA or hustle for yield from new bank/brokerage account bonuses. It keeps your life interesting and you wife... happy.

-TheDDC
I have VTSAX and have loved it of course. You like the international stock VTIAX? In any case total stock funds can’t really be considered low risk, even at 50/50. She ain’t gonna like it lol.
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arcticpineapplecorp.
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Re: Help, I’m in a Money Market and I can’t get out!

Post by arcticpineapplecorp. »

WhiteMaxima wrote: Sun Oct 17, 2021 8:41 pm At&T stock pays 8.6% dividend and PE is just 8.
even total bond market did better than AT&T over time (back to earliest date in portfolio visualizer based):

Image

source:
https://www.portfoliovisualizer.com/bac ... ion3_3=100

with AT&T you took much greater risk without getting the reward.

negative drawdown of -81.49%
worst year -64.33%
standard deviation 24.08%
sharpe and sortino ratios lower than the others (lower risk adjusted returns)
lowest CAGR.

what's not to love about AT&T?

did I forget to mention the stock, sector, size, style and country risk you'd take with a single stock??
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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arcticpineapplecorp.
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Re: Help, I’m in a Money Market and I can’t get out!

Post by arcticpineapplecorp. »

Ed 2 wrote: Sun Oct 17, 2021 8:49 am
Creditcardguy wrote: Sun Oct 17, 2021 8:25 am We sold a condo and have about 500k to do something with. My wife is ultra conservative and she’d be happy leaving it in a Money Market at .03% :( I’m 54 and plan to work about 5 more years. We wouldn’t need it for 10 years at the earliest. Maxed out the i401k already. Looking for something to make 2-4% with minimal risk. It’s tough because my wife is so risk averse. Any advice appreciated. :happy
Hello. Tell your wife that you lose 3-4% on inflation actually this year and probably 2-3% following years by keeping all this money on money market. If you actually that risk averse you should put 20K into IBonds this year at least.
better yet, since people don't seem to grasp percentages if you want to tell her the money or purchasing power she's losing then losing 3%-4% after inflation means your $500,000 is only worth $485,000-$480,000 at the end of the year. That's right, inflation cost you $15,000-$20,000 on that $500,000 sitting in the bank.

see if that motivates her instead.

nobody likes to lose money. but money in the bank doesn't "seem" like it's losing even though it is. Inflation is a hidden tax if you will. Its effects are not easily seen until you try to spend your money and understand you don't have as much as you thought you did.
Last edited by arcticpineapplecorp. on Sun Oct 17, 2021 9:03 pm, edited 2 times in total.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
Dottie57
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Re: Help, I’m in a Money Market and I can’t get out!

Post by Dottie57 »

egrets wrote: Sun Oct 17, 2021 6:00 pm "Happy wife, happy life."

Isn't it about time to retire this sexist expression?
I agree.
brad.clarkston
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Re: Help, I’m in a Money Market and I can’t get out!

Post by brad.clarkston »

I'm with your wife. I would not get crazy this late in life with the economy we have and the high flying stock market we also have.
Anything you do above I-Bonds and certificates is doubling the risk.

I would stop and really listen to your wife.

If it was my money and my wife I would:
  • buy the max in I-Bond's for both of you this year and next.
    build a certificate ladder.
    Keep $250k in a high yield account as liquid money.
70% AVGE | 20% FXNAX | 10% T-Bill/Muni
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