Where to Invest Money Right Now?

[LeeLau]

Just the TIPS.

Its just an ETF investing in inflation adjusted US Treasuries. It's not a play.

edit. Was for CascadeLuke.

The ETF has dividends of about 7% ie matching inflation. That's a nice buy and hold holding.

You can treat it as a 1 year hold and buy it at 110, collect the dividend and then sell it in a year by selling calls against your ETF holdings which pays out another 4%. That's not terrible.

[jm2e]

You can treat it as a 1 year hold and buy it at 110, collect the dividend and then sell it in a year by selling calls against your ETF holdings which pays out another 4%. That's not terrible.

Nothing underscores my complete ignorance of financial logistics more than this.



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[4matic]

Nothing underscores my complete ignorance of financial logistics more than this.

Consider yourself lucky.

You don’t have to be a member of Treasury.Gov to hold your paper with the TIP etf either. With treasury.gov survivors can only access the asset through treasury.gov.

[4matic]

Can you spell out the TIPS play? I’m a jong thats needs a place to go. Lately been staggering CDs at around 4.85

That’s pretty good return and easy. Going elsewhere requires more careful consideration and planning. The I-bond yield could fall off a cliff in the next year whereas you’re locked in on the cd. They both have some illiquidity.

[easyrdr]

Do you guys have any thoughts to share about lending money to friends/family for the purpose of buying property? "Hard money loan" is the common parlance. I guess my main question would be how to secure the loan and how durable any claim one might have to the property would be with a promissory note.

It can work.........but it can also get complicated quickly. The key is to draw up a good contract. A good friend couldn't get approved for a mortgage due to going through foreclosure back in 07/08 crisis. I bought the house he wanted then sold it to him on a 5 year term (me acting as the bank). He made all the payments plus interest for my troubles. At the end of 5 years he qualified for a mortgage and bought it for what he owed. I was protected because those 5 years I owned the house (even though he was making the payments) and if shit hit the fan I could always sell it. Even though it went okay it definitely put a strain on our relationship during that time. I'm not sure I would do it again.

[lowsparkco]

In Oregon a licensed mortgage broker has to write the paper for a hard money loan. Ultimately I think I would use an attorney. Most hard money lenders require substantial down payments and won’t loan on anything they don’t want to take back. Rates around here are usually about 12% and are interest only with the balloon due at 3 to 5 years. So, it’s kind of a bridge product to get someone to a place they can secure a better loan.

Easy’s situation was probably easier to execute but depending on tenant rights in your state could get dicey if the relationship comes off the rails.

[ghosthop]

We are (slowly) getting our shit together and looking at life insurance.

One guy is really trying to sell us on term life as a non-taxed bucket. Wants us to lock in a rate now to use in a few years when we are maxing 401/403 and IRA. Gave us the pitch tonight, sent over a ton of specifics afterwards I need to look through this weekend. Anyone use this as part of their pie?

[Garbowski]

I just bought a bunch of term to cover the family.

Why would shorter term CDs have better rates now?

https://www.capitalone.com/bank/cds/online-cds/

[Mustonen]

The yield curve is inverted. https://www.bloomberg.com/markets/ra...nment-bonds/us

Typically that screams recession. Right now I think it just screams that nobody really knows what the fuck is going to happen.

[jackstraw]

The yield curve is inverted. https://www.bloomberg.com/markets/ra...nment-bonds/us

Typically that screams recession. Right now I think it just screams that nobody really knows what the fuck is going to happen.

Not typically, every single time. Could take a year or more and we went inverted in July. But yeah, the only constant is change, so who the hell knows, we are certainly overdue for a correction based on historical trends.

[Mustonen]

Not typically, every single time. Could take a year or more and we went inverted in July. But yeah, the only constant is change, so who the hell knows, we are certainly overdue for a correction based on historical trends.

I say typical because “every single time” feels too predictive, given what’s going on right now. But I truly don’t pretend to prognosticate, I’m just here for the ride.

[Timberridge]

I think orange juice futures are ready to scream higher.

[Nobody Famous]

I just bought a bunch of term to cover the family.

Why would shorter term CDs have better rates now?

https://www.capitalone.com/bank/cds/online-cds/

5.00% APY on an 11 month CD is as good as it gets right now.

[sirbumpsalot]

5.00% APY on an 11 month CD is as good as it gets right now.

5% on both 6 month and 1yr T-bills/bonds which are state tax free...saving you middle class 7-figure income folks up to 13% if you live in CA or perhaps certain counties in OR.

[Nobody Famous]

5% on both 6 month and 1yr T-bills/bonds which are state tax free...saving you middle class 7-figure income folks up to 13% if you live in CA or perhaps certain counties in OR.

Nice. I see the weeks upper range on 6 month is just slightly above 5.0%.

Any insights on how to get in on this so exchange, trade and admin feeds don't eat up the slight advantage over a straight 5.000% CD from Capital One?

[sirbumpsalot]

Nice. I see the weeks upper range on 6 month is just slightly above 5.0%.

Any insights on how to get in on this so exchange, trade and admin feeds don't eat up the slight advantage over a straight 5.000% CD from Capital One?

Do it on treasury direct or thru your broker under "CD/Bonds - New Auctions" Most of them do not charge a fee. 13 and 26 week auctions are monday morning so set up before 5:30am EST. Treasury direct pulls from your bank account and obviously brokerage pulls from cash account.

[4matic]

We are (slowly) getting our shit together and looking at life insurance.

One guy is really trying to sell us on term life as a non-taxed bucket. Wants us to lock in a rate now to use in a few years when we are maxing 401/403 and IRA. Gave us the pitch tonight, sent over a ton of specifics afterwards I need to look through this weekend. Anyone use this as part of their pie?

Why do you need LI?

[Nobody Famous]

We are (slowly) getting our shit together and looking at life insurance.

One guy is really trying to sell us on term life as a non-taxed bucket. Wants us to lock in a rate now to use in a few years when we are maxing 401/403 and IRA. Gave us the pitch tonight, sent over a ton of specifics afterwards I need to look through this weekend. Anyone use this as part of their pie?

Why do you need LI?

^ This. There are many life insurance options and everything depends on your situation.

Quick suggestion if you are thinking of LI. Talk to one really good financial advisor to discuss other options and to get a second opinion. "Really, very, very good" is key point here.

Then get a third opinion if the 1st guy (who sounds like LI sales guy) and 2nd opinion leave any room for doubt. Costs you nothing except your time before you commit to something.

[ghosthop]

Why do you need LI?

Immediate need is to provide for our infant son if something were to happen to one or both of us while we are building our nest egg.

Long term, this person is trying to sell us on the idea that the policy would be used similar to a Roth, his example had us allocating ~10% of our yearly post-tax dollars earmarked for saving/investing into the policy. Again, haven’t looked at the details but was told that the money could be invested in various Blackrock indexes of our choosing.

I agree that he is trying to sell us LI, he came recommended by friends. My preference would be to work with someone who we pay hourly rather than someone working on a commission basis but I don’t know. We are out of our element, do not have family who have navigated a situation like ours and I am often skeptical of our friends advice based on their spending habits. How do you go about finding a very, very good financial advisor?

[4matic]

You have a child is reason enough. I’m not sure an insurance policy is a good savings vehicle unless you have a lot of extra cash with no where else to put it. A term policy with a survivor benefit and investing the rest with or without an advisor is likely best. Look into robo advisory https://www.forbes.com/advisor/inves...robo-advisors/

Save the maximum you can in tax deferred accounts is probably your best advice. Next would be a 529 for the kid if you have the extra income.

You are young enough that a Roth makes sense but I don’t see the advantage other than liquidity if you need it.

[The Reverend Floater]

Interesting article in the WSJ for those with subscriptions.

It’s a Richcession, Not a Recession https://www.wsj.com/articles/its-a-r...aybook-ddffb60

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[Nobody Famous]

Interesting article in the WSJ for those with subscriptions.

It’s a Richcession, Not a Recession https://www.wsj.com/articles/its-a-r...aybook-ddffb60

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Here it is without paywall: https://archive.ph/Zauha

Tip: archive.ph works great for this.

[Nobody Famous]

... How do you go about finding a very, very good financial advisor?

No short, simple answer for this.

Maybe start a separate thread so this one stays on topic, and we might see some interesting replies.

[garyfromterrace]

Nothing underscores my complete ignorance of financial logistics more than this.



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My brother! I love you man.

[Kevo]

Immediate need is to provide for our infant son if something were to happen to one or both of us while we are building our nest egg.

Long term, this person is trying to sell us on the idea that the policy would be used similar to a Roth, his example had us allocating ~10% of our yearly post-tax dollars earmarked for saving/investing into the policy. Again, haven’t looked at the details but was told that the money could be invested in various Blackrock indexes of our choosing.

I agree that he is trying to sell us LI, he came recommended by friends. My preference would be to work with someone who we pay hourly rather than someone working on a commission basis but I don’t know. We are out of our element, do not have family who have navigated a situation like ours and I am often skeptical of our friends advice based on their spending habits. How do you go about finding a very, very good financial advisor?

I recommend reading this article about how to find a good advisor- https://www.whitecoatinvestor.com/ho...ncial-advisor/ an also this article- https://www.whitecoatinvestor.com/5-...-only-advisor/

Also, it sounds like you are being pitched on some kind of universal or whole life insurance product. No term life insurance should cost 20% of your pre-tax income. I recommend reading this article- https://www.whitecoatinvestor.com/de...ife-insurance/

Life insurance as an investment vehicle is almost always inappropriate. It's expensive, the fees are high, and you are almost always better off investing in retirement accounts or brokerage accounts.

Term life insurance is appropriate for most people with dependents, but it should be cheap.

As far as investing, general rule is to take advantage of tax advantaged accounts. For example, put in enough to get the full employer match in 401k or 403B type accounts, then move on it IRAs, then max out 401k, then 529 plans for kid's college, then invest in taxable brokerage.

Check out this flowchart for more details.

Beyond tax advantaged accounts, the other thing to consider is the costs associated with the funds that you invest in (expense ratios, load fees, etc). See this article about expense ratios and this article about other fees.

Best of luck.