Huge amount of money in savings?

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Rasputin
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Re: Huge amount of money in savings?

Post by Rasputin » Mon Nov 06, 2017 4:34 pm

Salvatore Lovinello wrote:
Mon Nov 06, 2017 4:29 pm
That should read single account. A family of four could theoretically insure up to $1 million. This is possible though multiple accounts, ie; my account, my spouses account, first child's account, second child's account and all the combinations of joint and custodial accounts.
Sounds unlikely to me, and your examples seem to on a per depositor basis.

In the UK we have £80k per client per institution, or did last time I looked, so the limit applies to all accounts at any one bank.

Salvatore Lovinello
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Re: Huge amount of money in savings?

Post by Salvatore Lovinello » Mon Nov 06, 2017 4:43 pm

Rasputin wrote:
Mon Nov 06, 2017 4:34 pm
Salvatore Lovinello wrote:
Mon Nov 06, 2017 4:29 pm
That should read single account. A family of four could theoretically insure up to $1 million. This is possible though multiple accounts, ie; my account, my spouses account, first child's account, second child's account and all the combinations of joint and custodial accounts.
Sounds unlikely to me, and your examples seem to on a per depositor basis.

In the UK we have £80k per client per institution, or did last time I looked, so the limit applies to all accounts at any one bank.
https://www.fdic.gov/deposit/deposits/b ... glish.html

According to this site the total for a family of four is $3.5M
https://www.marketwatch.com/story/how-f ... 9172519053

franks59
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Re: Huge amount of money in savings?

Post by franks59 » Mon Nov 06, 2017 4:52 pm

Rasputin wrote:
Mon Nov 06, 2017 4:23 pm
No, I think he has that covered with his precious metals. Gold I'm sure would still have exchange value. Could he keep it safe though??

Bury a small amount under a large number of different trees, is my advice. Just don't lose the map. Or train a team of squirrels to bury and retrieve it on command.
Can't eat gold. Too soft to use in arrowheads.

Frank

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Re: Huge amount of money in savings?

Post by franks59 » Mon Nov 06, 2017 4:53 pm

Salvatore Lovinello wrote:
Mon Nov 06, 2017 4:29 pm
That should read single account. A family of four could theoretically insure up to $1 million. This is possible though multiple accounts, ie; my account, my spouses account, first child's account, second child's account and all the combinations of joint and custodial accounts.
I think we're saying the same thing.
From the FDIC website:
All single accounts owned by the same person at the same bank are added together and insured up to $250,000.
Frank

Salvatore Lovinello
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Re: Huge amount of money in savings?

Post by Salvatore Lovinello » Mon Nov 06, 2017 4:59 pm

"Can't eat gold. Too soft to use in arrowheads.

Frank"

Funny you say that. I once asked an economics professor if gold was the best hedge against a complete breakdown of society. His answer was guns. Because with guns he can take my gold or anything else he wanted...

Rasputin
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Re: Huge amount of money in savings?

Post by Rasputin » Mon Nov 06, 2017 5:15 pm

Salvatore Lovinello wrote:
Mon Nov 06, 2017 4:43 pm
Rasputin wrote:
Mon Nov 06, 2017 4:34 pm
Salvatore Lovinello wrote:
Mon Nov 06, 2017 4:29 pm
That should read single account. A family of four could theoretically insure up to $1 million. This is possible though multiple accounts, ie; my account, my spouses account, first child's account, second child's account and all the combinations of joint and custodial accounts.
Sounds unlikely to me, and your examples seem to on a per depositor basis.

In the UK we have £80k per client per institution, or did last time I looked, so the limit applies to all accounts at any one bank.
https://www.fdic.gov/deposit/deposits/b ... glish.html

According to this site the total for a family of four is $3.5M
https://www.marketwatch.com/story/how-f ... 9172519053
Ah - different meaning of 'single'. To me it means 'any one account' but under the FDIC definition it is essentially an account held in an individual's sole name. Still important to realise that it applies to all single accounts at any one bank, though.
franks59 wrote:
Mon Nov 06, 2017 4:52 pm
Rasputin wrote:
Mon Nov 06, 2017 4:23 pm
No, I think he has that covered with his precious metals. Gold I'm sure would still have exchange value. Could he keep it safe though??

Bury a small amount under a large number of different trees, is my advice. Just don't lose the map. Or train a team of squirrels to bury and retrieve it on command.
Can't eat gold. Too soft to use in arrowheads.

Frank
Yeah but the end of the banking system is not the end of trade. You can swap your gold for food and weapons, but you do have the problem of keeping it safe. For that you really want, um, a bank.

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Andrew Fryer
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Re: Huge amount of money in savings?

Post by Andrew Fryer » Mon Nov 06, 2017 6:35 pm

5-10 years back one of the American big names (Soros?) pointed out that the total amount of gold in the world was worth about 6 trillion dollars, but if you had 6 trillion dollars to invest, you could buy half of all the USA's farmland and/or the world's top 25 oil companies, or use your imagination. Why would anyone want to invest in gold?
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Casey
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Re: Huge amount of money in savings?

Post by Casey » Mon Nov 06, 2017 7:31 pm

I didn't say it was a good idea to sink your entire net worth in gold, only that it has a role to play as just about the only traditional safe haven asset that is not currently in a bubble. My allocation to metals is 15%, which is probably way too high for most people. I keep them, and cash also, for the day the worm turns and all those luscious farmlands and vibrant oil stocks get cheap again.

One fascinating thing I've found about metals is how strongly, even emotionally, people react to the subject both pro and con. My working hypothesis is it's because they can be seen as an expression of distrust or a "vote against the system," whatever you perceive that system to be. At a certain level they can represent a challenge to an entire worldview, which some take more to heart than others. That's my theory anyway.

Oh and I have assumed the OP has no consumer, student or other unproductive debt. Getting rid of that would be job #1 in my book.

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Steve Kutzer
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Re: Huge amount of money in savings?

Post by Steve Kutzer » Mon Nov 06, 2017 7:35 pm

Toss it into some CDs that don't have a terribly long maturity period, then you can be more thoughtful about where to invest.
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Mike Steede
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Re: Huge amount of money in savings?

Post by Mike Steede » Tue Nov 07, 2017 12:39 am

glassynails wrote:
Sat Nov 04, 2017 7:52 am
Hello.

I inherited a HUGE amount of money! Of course we all know that HUGE is relative, but it's close to six figures and to me that's a pretty large amount. Anyways, what's better than simply throwing it into a savings account? I'd rather not risk any of it at this moment. What's the next best besides a savings account? I mean as far a risk vs interest.
A high quality guitar built by a well known luthier is a safe bet for one and won't hurt your portfolio and not likely to depreciate, won't need gas and only the occasional free tune-up by your luthier. If I inherited that kind of money I wouldn't go whole hog and buy a bunch of guitars, but I wouldn't feel guilty about dropping 10-12 grand on a truly superior instrument that I'll enjoy for the rest of my life. Go for it! The rest? Throw it in a growth fund, or blue-chip stock like bank or insurance stock, better yet - eliminate any outstanding debt and get rid of your interest payments.
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rikart
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Re: Huge amount of money in savings?

Post by rikart » Tue Nov 07, 2017 2:04 am

Yep, you need an independent financial adviser. Shares, stocks, bonds, equity, guitar, yacht, real estate, commercial enterprise, pension, football team, cryogenic insurance, Greek island, Beatles copyright etc., are some of the choices you might make. In order to help you decide what is a priority as time goes by (needs differ over time), you have to assess what kind of investor you are, from conservative / risk adverse to adventurous / highly speculative, a novice or experienced investor, and all shades in between. This is the starting point prior to making any important financial decision. A financial adviser has a check list of questions that will be asked of you to find out exactly these things. This information is essential in forming an opinion as to how you might be advised for what works best for your needs. Then, it is a matter of considering how to balance / juggle the options that then exist in accordance with the criteria that have been set, based on those needs. Your financial adviser will then be able to help you make those choices.
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Mike Steede
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Re: Huge amount of money in savings?

Post by Mike Steede » Tue Nov 07, 2017 2:42 am

rikart wrote:
Tue Nov 07, 2017 2:04 am
Yep, you need an independent financial adviser. Shares, stocks, bonds, equity, guitar, yacht, real estate, commercial enterprise, pension, football team, cryogenic insurance, Greek island, Beatles copyright etc., are some of the choices you might make. In order to help you decide what is a priority as time goes by (needs differ over time), you have to assess what kind of investor you are, from conservative / risk adverse to adventurous / highly speculative, a novice or experienced investor, and all shades in between. This is the starting point prior to making any important financial decision. A financial adviser has a check list of questions that will be asked of you to find out exactly these things. This information is essential in forming an opinion as to how you might be advised for what works best for your needs. Then, it is a matter of considering how to balance / juggle the options that then exist in accordance with the criteria that have been set, based on those needs. Your financial adviser will then be able to help you make those choices.
The above is good advice. BUT - depending on where you live there is a big question regarding your 'adviser's' true intentions... here in Canada, an adviser does the above quoted things, an advisor spelt 'or' promotes the financial institutes' interests firstly... In the above quoted, please note the referral to 'independent' financial adviser... don't get sucked in by the 'advisor' down at your local bank or other financial institution, not the same animal.
http://www.moneysense.ca/save/investing ... r-adviser/
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Tubbers
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Re: Huge amount of money in savings?

Post by Tubbers » Tue Nov 07, 2017 7:54 am

I currently have 3 figures in my savings. :?
Help!

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Andrew Fryer
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Re: Huge amount of money in savings?

Post by Andrew Fryer » Tue Nov 07, 2017 12:31 pm

Casey wrote:
Mon Nov 06, 2017 7:31 pm
gold...[is]...not currently in a bubble.
I find this a very curious assertion. I'd have thought a bubble was defined by having the yield lower than some certain defined amount (internet company, value = a billion, yield = the bedsit-dwelling owner's social security check - classification, bubble). The point about that farmland and the oil companies is that 6 trillion in them yields hundreds of billions. 6 trillion in gold yields zero. But I'm no economist, so I won't speculate further. I have a vague idea the the entire diamond industry is a bubble and always has been, but the diamond cartels have somehow kept it afloat by dodgy means over the decades, mainly by restricting supply, I think.
Oh and I have assumed the OP has no consumer, student or other unproductive debt. Getting rid of that would be job #1 in my book.
Yes, people forget about this - a debt is a negative investment (and a very bad one), as the interest rate is always higher than if you are saving money. If you had a debt of 100,000 and you won 100,000, you'd be best off just sinking the lot in the debt, unless you can invest it at a better rate than you are paying for the debt,
1975 Calatayud y Gisbert, Yamaha CG131S.

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Casey
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Re: Huge amount of money in savings?

Post by Casey » Tue Nov 07, 2017 4:12 pm

I'm not a finance professional at all, just some random person working hard to understand it after having his net worth cut in half in 2000 after the dot-com bubble and again in 2008 after the housing bubble while relying on the advice of financial professionals the whole time.

The definition of bubble that resonates with me is when asset prices rise significantly faster than wages & income. Whether the asset itself throws off income isn't centrally relevant to that question as we saw in the US residential housing market, which is made up of houses that present interest and maintenance costs to homeowners rather than income. While it is true that gold is often leased between the largest players in the financial system and technically would throw off income in that scenario, I view gold held by individuals as more of an insurance policy than an investment. Similar to cash if not exactly the same. Viewed in that light it would be really nice if gold goes nowhere, since a world where gold explodes higher is a world with lots of crazy stuff happening that scares the pants off of people.

The majority of my savings are in brick and mortar commercial real estate, which does throw off income, but it's no panacea. Let interest rates normalize and real estate values likely fall hard and fast. If the real estate is mortgaged your bank could get spooked if the value drops below the indebtedness and could require additional cash or other collateral from you, or even call the note in extreme cases. Tough spot to be in, and that's not even accounting for the pressure on brick and mortar prices flowing from slowdowns in retail.

Until maybe 5-6 years ago I always thought economics and finance were boring and wanted no part of it. I've been surprised to discover how fascinating it can be, especially in facing the hard, honest questions you have to ask yourself in making such deeply personal decisions about what on earth you should do with your life's savings.

Anyway I agree with you about diamonds, something about them has always seemed "off" to me, kind of sketchy and illicit. Walking through the diamond district in Manhattan creeps me out every time. Even when I was a kid I always thought it was just some dumb rock, which or course I know is the way a lot of people feel about gold as well.

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