rawraw, drop a link homie.
^this. drop a link. I googled it but couldnt find it
Banks giving out a guaranteed 5% in a low interest environment seems really fishy to me… What is Barclays upto? Maybe theyre raising money for a new internal hedge or figuring out ways to fuck up libor again, im flabbergasted…
I anything I would assume it’s limeted to 1 year, basically a $250 promotion to open an account at Barclays.
Neither could I. Speaking of account bonuses I got a thing in the mail from Chase, $150 bonus for opening a new savings acct and putting $10k in there for 90 days.
I just read the “just graduated from college” part. First I’d pay off my student loans, then I’d buy a house - cash. That’s probably take me down to about $500k.
Then I’d put the rest in a couple fairly conservative high-yield muni funds and yield 4.5%. That’d give me $1,875 a month tax-free and no debt.
Couldn’t live like a king, but enough to pay the bills and a nice supplement to whatever entry level job I found.
Come on, you’d rather buy a house cash, and use the extra in 4.5% munis, than get a 80% LTV, 3.5% interest rate mortgage, and then invest that leftover 80% equity into the 4.5% munis as well? You get to pay the mortgage with the munis and pocket the extra 1%. Also you’d get the mortgage interest benefit on the tax returns.
I understand it’s $1 million free cash we have, but let’s not get silly about things.
Okay guys, I’ll spread the knowledge. It is a convoulated way to get it and is designed for the underbanked. If you don’t use the paypal card (and only get it to get the account), you avoid the fees and get the bank account. Since we aren’t underbanked and lets hope financially savy, we get to reap the benefits from them charging tons of fees to CvM’s homies. I pour out liquor for them.
http://www.fatwallet.com/forums/finance/1168417/
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You aren’t charged the $5 monthly fee unless you have a card balance or use their debit card.
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ACH funds to the card, transfer all the funds on the 4th day to Bancorp
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Then you can ACH in and out.
I’m still currently experimenting with the limits. I just got the card this week.
Here is the Paypal card: https://www.paypal-prepaid.com/prepaid-debit-card/applyNow.m?AID=Refer2PayPal&uref=6292376425
Whats up with people wanting to buy a house straight cash right out of college, there has to be better things you could do with the cash
Yes, yes I would. I abhor debt.
Those HY munis aren’t without risk. They have a tendency to lose double-digits in a year. That 4.5% doesn’t look as attractive when your base gets knocked out from under you. That is, if you have debt. If you don’t, you can rest - fairly - easy that those munis will revert to par. Munis hardly default and a good muni fund always makes money over a rolling 2-3 years. Being debt free allows one the flexibility required to weather the storm.
I know I should always invest when my expected return is greater than my cost of borrowing, but in real life it doesn’t always make sense.
Point taken.
I was really surprised you didn’t say gold or silver.
Touche, I didn’t see you said funds… I thought you would just invest directly in the bonds themselves. My fault.
Reading comprehension fail.
I am a fan of buying hard assets (i.e. real estate). The problem is, around here, houses are like $1 million. So, if you use Chad’s money to buy a house, your asset allocation is ridiculously overweight in real estate. From an asset allocation perspective, it’s probably not optimal. Now, if I had $5 million or so, I’d say no problem.
Plot twist - the house is solid silver.
I would first purchase a house cash, After that I would probably have about 550k left.
55% US Equity Index
5% Cash
15% Fixed Income
15% Gold
10% - actively-managed stocks
“Graduated from college” implies you can do asset-only (not ALM) allocation.
“Invest it today” means this is not buy-and-hold, you will switch if something better comes along.
In that case I’d go with some naive diversification:
12.5% VEA or equivalent (eg SCHF) - developed equity
12.5% VWO (or SCHE) - emerging equity
25% US large-cap - any S&P 500 or Russell 1000 or anything that contain top 100 US companies by market cap
25% Berkshire Hathaway (yep, right now, too cheap not to buy inspite of having gone up in tandem with S&P. Buffett in today’s interview dropped broad hints all over the place.)
25% real estate (leveraged, so at 20% equity you can buy $1.25 million, pay about 4% on the $1m debt or about $40K by using about $10K dividends from ETFs and $30K from rental on real estate.) - Preferably in California and Florida, you can’t afford too close to the coast, but you can and should definitely buy quality RE that will be next in line to come back once the beachfront guys have come back.
0 bonds - right now
0 PM - right now