Credit cards, savings accounts, CDs…

[SDS]

With all of the interest rate changes, I’m looking to shuffle some things around. There are savings accounts with interest rates between 3.5 to 5%. You can get a six month CD for 5%. Cashback credit cards can be had with 2% on everything rewards.

 

Has anyone started to take advantage of this? Does anyone have a good card set up?

[muppy]

what you are mentioning here read as very smart investment strategy.

 

I'm assuming that the lower yield but guaranteed CD rate offset more volatile uncertain return in your portfolio.

 

I like the 2% rewards on credit card purchases  Travel Rewards FTW are especially appealing

 

My families strategy is to

 

#1 Pay off Credit cards and keep balance as low as possible. Credit bureaus love that

 

#2. The ideal scenario is to use any credit card. But then pay it off in full every month. Which frees money up for gain instead of paying credit card companies interest.

 

I guess it depends on your income and how many resources are realistically available at any given time

 

we have a great financial guy who manages our portfolio (and at a deep discount)  because we referred he clients in the past as well as 2 company changes in 2 years in which we followed him to the new company. I'll ask him.  Keep him on his toes type question 🙂

 

No specifics in answer to your do I have any good card set ups question today. But I hopefully will soon.  It' an interesting thought  

 

m

Edited April 24, 2023 by muppy

[SDS]

5 minutes ago, muppy said:

what you are mentioning here read as very smart investment strategy.

 

I'm assuming that the lower yield but guaranteed CD rate offset more volatile uncertain return in your portfolio.

 

I like the 2% rewards on credit card purchases will help offset the interest charges THEY charge if you keep a balance. The set up of THAT strategy I think might not work for me personally

 

My families strategy is to

 

#1 Pay off Credit cards and keep balance as low as possible. Credit bureaus love that

 

#2. The ideal scenario is to use any credit card. But then pay it off in full every month. Which frees money up for gain instead of paying credit card companies interest.

 

I guess it depends on your income and how many resources are realistically available at any given time

 

we have a great financial guy who manages our portfolio (and at a deep discount)  because we referred he clients in the past as well as 2 company changes in 2 years in which we followed him to the new company. I'll ask him.  Keep him on his toes type question 🙂

 

No specifics in answer to your do I have any good card set ups question today. But I hopefully will soon.  It' an interesting thought  

 

m

I think you misunderstood the question. I’m really talking about the different products that are out there now and if people are starting to take advantage of them. 

 

Capital one 360 performance savings account offers a 3.5% rate. Wells Fargo active cash card gives 2% back on everything, however that companies full of thieves. CIT offer is a 5% six month CD. 
 

This could mean real money compared to the 0.1% types of rates we have been getting for 10 years.

[muppy]

5 minutes ago, SDS said:

I think you misunderstood the question. I’m really talking about the different products that are out there now and if people are starting to take advantage of them. 

 

Capital one 360 performance savings account offers a 3.5% rate. Wells Fargo active cash card gives 2% back on everything, however that companies full of thieves. CIT offer is a 5% six month CD. 
 

This could mean real money compared to the 0.1% types of rates we have been getting for 10 years.

Yes well in any case  the 0.1% number is almost zero so any amount higher clearly an improvement. I'll get back to you with a better answer. And maybe you will get more informed answers from posters.

Edited April 24, 2023 by muppy

[LeviF]

CDs nuts lmao

[WhoTom]

Several years ago we opened a high-yield savings account with Citizen's Access, a fully-online bank. (It's affiliated with a brick-and-mortar bank, though, and it's FDIC insured.) At the time, the rate was 2.5%. We put most of our savings there, and then bought two five-year CDs at 3.5%. Over the first couple of years, the savings interest rate kept decreasing, reaching a low of 0.4% before rebounding. (Still a ton better than our credit union, but disappointing.) The current rate on the savings account is 4.75%.

 

Our Chase Visa card has 1% cash back on every purchase, and 5% on select purchases. The "select" category rotates every three months. In the summer, it's gasoline purchases. If you take your refund in form other than cash (Amazon gift card, etc.), then you get more money than the points would indicate.

 

If you're interested in safe long-term investments, think about an I-Bond. https://keilfp.com/blogpodcast/i-bond-rate-november-2022-may-2023/

 

[SDS]

56 minutes ago, WhoTom said:

Several years ago we opened a high-yield savings account with Citizen's Access, a fully-online bank. (It's affiliated with a brick-and-mortar bank, though, and it's FDIC insured.) At the time, the rate was 2.5%. We put most of our savings there, and then bought two five-year CDs at 3.5%. Over the first couple of years, the savings interest rate kept decreasing, reaching a low of 0.4% before rebounding. (Still a ton better than our credit union, but disappointing.) The current rate on the savings account is 4.75%.

 

Our Chase Visa card has 1% cash back on every purchase, and 5% on select purchases. The "select" category rotates every three months. In the summer, it's gasoline purchases. If you take your refund in form other than cash (Amazon gift card, etc.), then you get more money than the points would indicate.

 

If you're interested in safe long-term investments, think about an I-Bond. https://keilfp.com/blogpodcast/i-bond-rate-november-2022-may-2023/

 

not really thinking about long-term investments, just every day money management. I’ve looked at that citizens savings account. I have one now that can be converted into a much better rate at the same bank, it’s just not the absolute best right that’s out there right now.
 

I think I’m leaning towards getting one card for every day purchases at 2% and 1 or 2 more that hits groceries, restaurants, and dining. You can’t really get all three at the same time. The Wells Fargo one looks like it’s the most straightforward but I’ve been waiting to get away for that company for years after all the consumer fraud that occurred a few years ago. Citibank has a 2% card to that fits, but the Wells Fargo one has a $200 introduction offer and why would I not want $200? That’s right. Because I hate these people. Lol

[ICanSleepWhenI'mDead]

Flat 2% back on all purchases with no annual fee:

 

https://www.nerdwallet.com/reviews/credit-cards/fidelity-rewards

 

You can set up a Fidelity "cash management account" to accept the 2% cash back each month.  The cash back money doesn't need to stay in that account for any specific length of time.  You can set it up so that you can make an online transfer from the Fidelity "cash management account" to your checking account at any bank you choose whenever you want.

[Guffalo]

I am not an expert by any means, but I too have watched the various offerings from the banks and we started to try to fine tune how we were holding our cash assets. For CDs, we recently moved on from our money market accounts to take advantage of the higher rates on CDs. We have set up a ladder approach by creating a series of 3, 6 and 12 month CDs to allow for some flexibility. If rates get better, we can roll them over to new rate, whereas if it drops, the funds can be allocated elsewhere. 

 

As someone mentioned before, I bonds also seem like a great investment although you can only allocate 10K per year, But you can create various accounts for the wife and kids ( 10K each). Its a good way to put some cash away for the kids.

[Augie]

We keep excess cash at Barclay’s and transfer chunks in or out as needed. I haven’t looked at the current rates, but figure the rising tide will raise all ships, to some degree. We haven’t done anything different regarding credit cards. Chase Sapphire is the daily use card.

 

When we moved about a year ago we wanted to just pay for the house with cash. That has an enormous appeal to it. But we listened to the less emotional advisors around us and took a modest mortgage. That 30 year loan under 3% is looking pretty attractive right now. As someone recently said to me, not everybody loves their house, but a lot of people in recent years are LOVING their mortgage!  

[zevo]

11 hours ago, SDS said:

With all of the interest rate changes, I’m looking to shuffle some things around. There are savings accounts with interest rates between 3.5 to 5%. You can get a six month CD for 5%. Cashback credit cards can be had with 2% on everything rewards.

 

Has anyone started to take advantage of this? Does anyone have a good card set up?

Ive been taking advantage of offers for years. Ive opened and closed several credit cards over the years and utilizing them for their cash back bonuses when the spend criteria was met. minimal effort and have earned thousands. I've slowed down quite a bit and use a Wells Fargo active cash for unlimited 2 % for all purchases. We also use an amex blue preferred which gives up 6 % back on groceries and 3% on gas. Those have been the go to cards. As far as savings accounts go pretty much any will have 3.5% and up. I use discover savings that gives 3.75% return currently but you can do better than that.

[SDS]

2 hours ago, zevo said:

Ive been taking advantage of offers for years. Ive opened and closed several credit cards over the years and utilizing them for their cash back bonuses when the spend criteria was met. minimal effort and have earned thousands. I've slowed down quite a bit and use a Wells Fargo active cash for unlimited 2 % for all purchases. We also use an amex blue preferred which gives up 6 % back on groceries and 3% on gas. Those have been the go to cards. As far as savings accounts go pretty much any will have 3.5% and up. I use discover savings that gives 3.75% return currently but you can do better than that.

yeah. I’m looking at a bunch of the same ones you mentioned. It really looks like you need three credit cards to cover all your bases if you want to maximize your returns. Like maybe one for gas and groceries, one for restaurants, and one for everything else. the rewards can really be substantial. 

[sherpa]

I took over as Treasurer of our Volunteer Fire Dept. They were keeping their cash reserves in the checking account bank's proprietary money market fund, which was yielding about 1% at the the time, now 3%, but not competitive.

I transferred half those  reserves into a 6 month cd at 4.75% and a one year at 4.95%.

The other half of the funds, which we desired to be more liquid, I moved into the Schwab Value Advantage Money Fund, (SWVXX), which has a current yield of 4.66%, completely liquid.

 

That fund is also where I keep our personal family cash in our trading account. 

 

Yields have certainly moved up rapidly with the past many months of Fed hikes. 

[Punching Bag]

Banks and credit card companies know who we are.

 

We almost never have a balance on a credit card and not paid credit card interest in over 10 years with one exception and this affected my wife being able to get a credit card at PNC Bank.   I told my wife to get a credit card in her own name for security in case I am not available but they refused her for her credit profile did not match customers they were seeking since she has not carried a balance and was rejected.  When I found out this I immediately went to the bank and closed all accounts telling representative "their lending profile did not match banks we were seeking since we had over $100K in assets in bank but refused to issue her a credit card.  I received two calls after this one was bank manager who was there when I closed accounts and the other was a corporate VP trying to get me to return saying "representative did not explain correctly why we denied credit card request but we corrected issue".   PNC later merged with another "equal bank" Suntrust we had account with creating Truist but we have not closed any accounts yet. We did notice that none of the personnel from the PNC branch are working at local Truist bank branch.

 

Our exception was when bank Chase changed billing period and coincidently also did not send statement to us in time.

We immediately paid everything owed including what not owed yet but due next month for it is only interest free if you pay balance completely.

We told bank issue and that we did not know about change but they stated we still owed money on interest so we told them we were closing credit card and closed all of the liquid account (those not tied to a CD.  Amount was miniscule but the principle remains - we do not remain with financial institutions which make mistakes and fail to correct them.   

 

We paid a credit card balance with another bank once which was $10.14 cents and bank only took out $10 and sent us statement saying we owed $0.14.  We sent back to them copy of their check showing it was for full amount (before era of digital checks)  expecting them to correct it and next statement they sent us statement stating interest on the $0,14 AND a non-payment fee of $25.  We immediately went to bank, paid of credit card and non-payment fee and disputed the charges however.  Bank manager said it was put of his hands and that non-payment fee was clearly listed in plain written terms ignoring that it should have been corrected by bank.  He stated that we should have paid the $0.14 amount and then disputed it.   We closed bank account and when we did that they required us to provide written reason why so we wrote on form 'Asinine bank manager" then his name.  He stated that was not a proper response and we stated based on plain written instructions there is nothing wrong.

 

 

Currently for our "liquid assets" we use a variety of financial institutions including Discover, HSBC, M&T Bank, Capital One, Truist, Burke and Herbert as well as two credit unions Apple and Andrews FCU.   We mix short term CDs with longer term ones with minimum early termination lost of interest. Local bank branches have been closing down to save money and as HSBC and Capital One make it less convenient to bank we reduce use of those institutions.  We have found that locally best rates for CDs have been at the two credit union and have best services,  Apple CU in particular provides a financial advisor who will help with your planning even if you do not open investments with them.

 

We owe nothing on house, cars or anything else other than taxes and revolving credit card balances for more than 10 years,

 

We have rebate credit cards and I find American Express the best for they will fight for customers on lemons and I use the rebates to maintain my Hilton points.

[Punching Bag]

Another thing to look are Treasury I bonds.

 

https://www.treasurydirect.gov/

Rate Change Deadline: To receive the current 6.89% rate for I Bonds in TreasuryDirect, you must complete your purchase by 11:59 p.m. Eastern Time on Thursday, April 27. Learn More.

 

I Bonds:

https://www.treasurydirect.gov/savings-bonds/i-bonds/

[boyst]

Fidelity money market account drawing just under 5% interest if you got $10k to invest it's liquid vs invested. 

[Nextmanup]

On 4/24/2023 at 4:57 PM, Augie said:

We keep excess cash at Barclay’s and transfer chunks in or out as needed. I haven’t looked at the current rates, but figure the rising tide will raise all ships, to some degree. We haven’t done anything different regarding credit cards. Chase Sapphire is the daily use card.

 

When we moved about a year ago we wanted to just pay for the house with cash. That has an enormous appeal to it. But we listened to the less emotional advisors around us and took a modest mortgage. That 30 year loan under 3% is looking pretty attractive right now. As someone recently said to me, not everybody loves their house, but a lot of people in recent years are LOVING their mortgage!  

This makes sense, you would think.

But I had a savings account with Capital One that was still paying the good old .3% interest a while ago.  It began life as ING Orange and was the highest paying interest rate savings account on the planet when I opened it.

 

So I go to the Capital One website to play with my account and notice that they are doing a big push to get people to open up new savings accounts---at 3.5% interest.   I look at my account (as a long time "valued customer") and assume I am getting that new rate automatically.  NOPE! 

 

I immediately opened the new account at 3.5%, and transferred the max they would allow at account start up.  After a few days I could get the rest in there, then I closed the old account that paid .3% .

 

The rising tide may not raise all ships. 

 

I am investigating other accounts as you hear that some pay 5%.  The ones that are actually paying 4 or 4.5 or 5, and don't have strings attached, are few and far between, and tend to come from weird places I have never heard of.  Not sure I want to open those.

 

I am about to open another one at 4% though.  It's not as simple as putting all the money in 1 account that pays the highest, b/c I'm over the FDIC insurance limits and need to diversify.

 

 

[SDS]

37 minutes ago, Nextmanup said:

This makes sense, you would think.

But I had a savings account with Capital One that was still paying the good old .3% interest a while ago.  It began life as ING Orange and was the highest paying interest rate savings account on the planet when I opened it.

 

So I go to the Capital One website to play with my account and notice that they are doing a big push to get people to open up new savings accounts---at 3.5% interest.   I look at my account (as a long time "valued customer") and assume I am getting that new rate automatically.  NOPE! 

 

I immediately opened the new account at 3.5%, and transferred the max they would allow at account start up.  After a few days I could get the rest in there, then I closed the old account that paid .3% .

 

The rising tide may not raise all ships. 

 

I am investigating other accounts as you hear that some pay 5%.  The ones that are actually paying 4 or 4.5 or 5, and don't have strings attached, are few and far between, and tend to come from weird places I have never heard of.  Not sure I want to open those.

 

I am about to open another one at 4% though.  It's not as simple as putting all the money in 1 account that pays the highest, b/c I'm over the FDIC insurance limits and need to diversify.

 

 

same exact story. Started with the ING account, went to capital one, got shafted with 0.3%. Now I’m in the process of moving out. I wouldn’t have looked into this if they just gave me the 3.5% and now they will be losing all my business because because they gave me incentive to look for something else.

[Augie]

2 hours ago, Nextmanup said:

This makes sense, you would think.

But I had a savings account with Capital One that was still paying the good old .3% interest a while ago.  It began life as ING Orange and was the highest paying interest rate savings account on the planet when I opened it.

 

So I go to the Capital One website to play with my account and notice that they are doing a big push to get people to open up new savings accounts---at 3.5% interest.   I look at my account (as a long time "valued customer") and assume I am getting that new rate automatically.  NOPE! 

 

I immediately opened the new account at 3.5%, and transferred the max they would allow at account start up.  After a few days I could get the rest in there, then I closed the old account that paid .3% .

 

The rising tide may not raise all ships. 

 

I am investigating other accounts as you hear that some pay 5%.  The ones that are actually paying 4 or 4.5 or 5, and don't have strings attached, are few and far between, and tend to come from weird places I have never heard of.  Not sure I want to open those.

 

I am about to open another one at 4% though.  It's not as simple as putting all the money in 1 account that pays the highest, b/c I'm over the FDIC insurance limits and need to diversify.

 

 

 

1 hour ago, SDS said:

same exact story. Started with the ING account, went to capital one, got shafted with 0.3%. Now I’m in the process of moving out. I wouldn’t have looked into this if they just gave me the 3.5% and now they will be losing all my business because because they gave me incentive to look for something else.

 

I don’t sit in the room as they make those pricing decisions, but that sounds like an AWFUL plan to pay 0.3% in the current market. That is not just low, that is PISS ME OFF low. I looked up our Barclays account and I believe it’s paying 3.8%. (My wife handles most of the investment stuff, so I had to check.) If you are getting 4% or 4.25%, I’m OK with that. I’m not chasing every penny on a regular basis, but 0.3% in this market is how you get people to commit to never doing business with you again. Great, you made a little bit more off of me for a little while, but you lose in the long run. 

 

There is a gas station on a great corner right by my house. They routinely charge 40-70 cents/gallon more than multiple stations a mile in any direction. People fill up with gas there all day long. Again, I don’t need the BEST deal, but this feels like an insulting stupidity tax. I wouldn’t buy a bottle of water from them if I was thirsty. 

 

 

[SDS]

1 minute ago, Augie said:

 

 

I don’t sit in the room as they make those pricing decisions, but that sounds like an AWFUL plan to pay 0.3% in the current market. That is not just low, that is PISS ME OFF low. I looked up our Barclays account and I believe it’s paying 3.8%. (My wife handles most of the investment stuff, so I had to check.) If you are getting 4% or 4.25%, I’m OK with that. I’m not chasing every penny on a regular basis, but 0.3% in this market is how you get people to commit to never doing business with you again. Great, you made a little bit more off of me for a little while, but you lose in the long run. 

 

There is a gas station on a great corner right by my house. They routinely charge 40-70 cents/gallon more than multiple stations a mile in any direction. People fill up with gas there all day long. Again, I don’t need the BEST deal, but this feels like an insulting stupidity tax. I wouldn’t buy a bottle of water from them if I was thirsty. 

 

 

I doubt I would’ve made the effort to move from 3.5% to 4.75%, even if I did look into it. But it’s like if I’m going through all of the aggravation to open up a new account and then close my current one, I might as well take the best offer I can find. That is not with capital one.

[Nextmanup]

On 4/27/2023 at 12:05 PM, SDS said:

same exact story. Started with the ING account, went to capital one, got shafted with 0.3%. Now I’m in the process of moving out. I wouldn’t have looked into this if they just gave me the 3.5% and now they will be losing all my business because because they gave me incentive to look for something else.

The moment my ING Orange (from Holland) turned into Capital One, I was pissed off and knew it wouldn't end well.  I'm moving on as well, ultimately.  

 

To Augie: it's not that Capital One was actively modifying my account in this market to pay .3%.  It's just that this is what it was from another time and they never actively modified it to give me more money.

Maybe that is equally outrageous!  I was pretty pissed when I noticed my rate was not the going rate.

 

I'm going to look into Barclay's based on your comments!

 

 

[Punching Bag]

2 hours ago, Nextmanup said:

The moment my ING Orange (from Holland) turned into Capital One, I was pissed off and knew it wouldn't end well.  I'm moving on as well, ultimately.  

 

To Augie: it's not that Capital One was actively modifying my account in this market to pay .3%.  It's just that this is what it was from another time and they never actively modified it to give me more money.

Maybe that is equally outrageous!  I was pretty pissed when I noticed my rate was not the going rate.

 

I'm going to look into Barclay's based on your comments!

 

This is very common with financial institutes valuing external money more than internal.  I saw one report on a bank in that bank was losing as much old money as new money obtained but it failed to point out many of the customers were transferring money out in order to be able to utilize new promotions.   The problem with that is sometimes when customers take it out intending to put it back in they find another rate even better than promotion rate.

[EmotionallyUnstable]

SoFi savings account is 4.2% APY, requiring a direct deposit though. 

 

Opened one a few months back to stash  some emergency funds. So far so good. 

[Augie]

On 4/28/2023 at 2:24 PM, Limeaid said:

 

This is very common with financial institutes valuing external money more than internal.  I saw one report on a bank in that bank was losing as much old money as new money obtained but it failed to point out many of the customers were transferring money out in order to be able to utilize new promotions.   The problem with that is sometimes when customers take it out intending to put it back in they find another rate even better than promotion rate.

 

I managed retail bank branches for years. You ALWAYS have the rate shoppers who want a little extra on a CD rate “or else”, or a free safe deposit box. “I have $100K in here, I deserve a free SD box!”  Yeah, well we have people with millions who pay for their boxes.

 

What banks want is as many products or relationship ties as they can get in a household. It’s easy to move your money market and never come back. Have your checking and credit cards, with auto-pay bills and direct deposit set up? That move just became much less likely. 

 

 

.

 

.

Edited April 30, 2023 by Augie

[jkeerie]

My first credit card was Discover...right out of college eons ago.  I think they were the first one to offer a cash back bonus.  They have the 5% categories that change quarterly that I take advantage of.  I have since acquired other cards, all offering a cash back bonus.  I select which card to use based on which is most advantageous, always paying them off each month.

 

Discover was also one of the first to offer online savings accounts as well.  Years ago I was earning better than 3% on my savings.  They also had a 5% CD that I took advantage of.   When Ally came about, I moved my online savings there.  Their rate was slightly better at the time but mainly I had more flexibility in how I could structure beneficiaries.  When interest rates dropped, their rate would drop...but never to the pittance you get at your local bank.  As rates have increased, they have raised their rates again.  Right now they are just under 4%.  Very easy to do business with as well (both them and Discover).  Easy to set up and move money as needed.

 

Quite honestly, I don't know why folks don't take advantage of savings mechanisms and avenues that have been available for a long time.

Edited April 30, 2023 by jkeerie

[Royale with Cheese]

I have an investment question for those who might know.  @Augie I think this is your field.

 

So I have a Traditional IRA account that I completely forgot.   My first job in 2008 is when I opened it because that company didn't have a 401K.

I got a letter in the mail that my account was moved and currently has roughly $16,000 in it.

 

I have a 401K now so I'm not really concerned with this IRA account...I view it as house money.  

 

I'm thinking about cashing this out and use it to invest...aggressively invest in something like stocks.  I believe I would have a 10% penalty along with my tax bracket....I'm probably looking around a total of 40% hit?  So roughly $10,000 after all this?

 

I'm not cashing this out to buy a car or anything like that....I would use it to invest.

 

Anyone have thoughts on this?  

 

[billsfanmiamioh]

25 minutes ago, Royale with Cheese said:

I have an investment question for those who might know.  @Augie I think this is your field.

 

So I have a Traditional IRA account that I completely forgot.   My first job in 2008 is when I opened it because that company didn't have a 401K.

I got a letter in the mail that my account was moved and currently has roughly $16,000 in it.

 

I have a 401K now so I'm not really concerned with this IRA account...I view it as house money.  

 

I'm thinking about cashing this out and use it to invest...aggressively invest in something like stocks.  I believe I would have a 10% penalty along with my tax bracket....I'm probably looking around a total of 40% hit?  So roughly $10,000 after all this?

 

I'm not cashing this out to buy a car or anything like that....I would use it to invest.

 

Anyone have thoughts on this?  

 

Keep it invested and avoid the penalties & income tax 🤷🏻‍♂️

[Augie]

23 minutes ago, Royale with Cheese said:

I have an investment question for those who might know.  @Augie I think this is your field.

 

So I have a Traditional IRA account that I completely forgot.   My first job in 2008 is when I opened it because that company didn't have a 401K.

I got a letter in the mail that my account was moved and currently has roughly $16,000 in it.

 

I have a 401K now so I'm not really concerned with this IRA account...I view it as house money.  

 

I'm thinking about cashing this out and use it to invest...aggressively invest in something like stocks.  I believe I would have a 10% penalty along with my tax bracket....I'm probably looking around a total of 40% hit?  So roughly $10,000 after all this?

 

I'm not cashing this out to buy a car or anything like that....I would use it to invest.

 

Anyone have thoughts on this?  

 

 

To each their own, but I’m not paying penalties and taxes to free up that money (or what would be left of it). That should only be done in desperate circumstances, IMO. You are guaranteed a loss before you ever get started. 

 

By “invest” can I assume you mean in real estate? You can obviously keep it tax sheltered, avoid losing a big chunk of your asset and still “invest” in more traditional ways. But that’s just me. Do what makes you feel comfortable, and good luck! 

[Royale with Cheese]

1 minute ago, Augie said:

 

To each their own, but I’m not paying penalties and taxes to free up that money (or what would be left of it). That should only be done in desperate circumstances, IMO. You are guaranteed a loss before you ever get started. 

 

By “invest” can I assume you mean in real estate? You can obviously keep it tax sheltered, avoid losing a big chunk of your asset and still “invest” in more traditional ways. But that’s just me. Do what makes you feel comfortable, and good luck! 

 

I've been talking with some Financial Investors and they also advised against it as well.  They would have a financial plan if I moved forward with it to invest in stocks or other things that can make me money before I'm 59 and a half.

They won't get specific until I sign an agreement with them.

[Augie]

5 minutes ago, Royale with Cheese said:

 

I've been talking with some Financial Investors and they also advised against it as well.  They would have a financial plan if I moved forward with it to invest in stocks or other things that can make me money before I'm 59 and a half.

They won't get specific until I sign an agreement with them.

 

There should be an easy way to do that. Be careful what you are signing and agreeing to. You could just find a couple nice index funds and handle it without making it complicated or paying extra fees. What are they being paid, and for what service? The mutual funds will already have management fees built in. Do they want to get paid to pick those funds? Or do they want to go picking stocks for you? It’s hard to beat the market, so we are mostly un funds. 

[Royale with Cheese]

9 minutes ago, billsfanmiamioh said:

Keep it invested and avoid the penalties & income tax 🤷🏻‍♂️

 

That does seem like the most safe and logical plan.  I think I'm just being impatient but I also want to take a risk.

 

I'm kinda viewing it like it's free house money since I haven't done anything with it since like 2010.  

 

I currently have a 401K with my current company.  I own one condo that I'm renting out that I'm going to sell once my tenant moves out.

I keep researching articles on short term investing and covid slowed it down for a bit but its exploded since then and it's forecasted to continue the growth.

People are able working from home more and more and are helping the short term investment market.

 

I talked to a guy this weekend that is good friends with my brother.  He owns a cabin in North GA and it stays rented all year round.  Many people are from the city and just want to get out to somewhere peaceful to work for a bit.  A vacation without having to take vacation days from work.

 

He generates roughly $8,000 a month on average.  After all expenses paid out, he's netting about $3,000-$3,500 a month.  

 

This is what I'm working towards and something like this would be used towards my retirement instead of the IRA.

My assumption is the growth from the real estate would grow more than my IRA....which is why I'm willing to risk the IRA to invest in other entities.  

[The Jokeman]

If you can put as much into your 401k as possible, I put in 15% with my company matching 6%. I also started investing a separate account with a mutual funds broker when I was younger and just letting it build and build and add to it if/when see my savings is more than 4 months worth of mortgage payment. I then try to pay credit cards off before the interest starts toss in it's 2-3% cash back, also I use store credit cards on large purchases as often they'll let you go so many months without interest. I suppose I could put the savings into a CD to get more interest on my savings but meh ultimately that's too much work and want to ensure I have some cash on hand incase an emergency. 

[Jauronimo]

12 minutes ago, Royale with Cheese said:

 

I've been talking with some Financial Investors and they also advised against it as well.  They would have a financial plan if I moved forward with it to invest in stocks or other things that can make me money before I'm 59 and a half.

They won't get specific until I sign an agreement with them.

The money in your IRA should still be in whatever investment vehicle you chose when you set it up or last edited your allocation.  Its invested.  If you want this money in the same place as your current 401k for ease of managing, you can roll it to your new provider without tax consequences.  It is an easy process. 

[Royale with Cheese]

5 minutes ago, Augie said:

 

There should be an easy way to do that. Be careful what you are signing and agreeing to. You could just find a couple nice index funds and handle it without making it complicated or paying extra fees. What are they being paid, and for what service? The mutual funds will already have management fees built in. Do they want to get paid to pick those funds? Or do they want to go picking stocks for you? It’s hard to beat the market, so we are mostly un funds. 

 

It's a $1,250 a year to help me plan and advise on stocks.  

[Jauronimo]

3 minutes ago, Royale with Cheese said:

 

It's a $1,250 a year to help me plan and advise on stocks.  

Thats an absurd fee for $10,000.  12.5% is like 10x what admin fees should be.  These are closer to hedge fund fees 2% of AUM and a 20% carried interest.  

[Royale with Cheese]

2 minutes ago, Jauronimo said:

Thats an absurd fee for $10,000.  12.5% is like 10x what admin fees should be.  These are closer to hedge fund fees 2% of AUM and a 20% carried interest.  

 

It's $1,250 is for the advisement fee regardless if I use my IRA or not.  

 

If I'm going to play the stock and use my IRA to do it, I could just sign up for Etrade or Robin myself.

[Augie]

3 minutes ago, Royale with Cheese said:

 

It's a $1,250 a year to help me plan and advise on stocks.  

 

It depends on how much they are managing, but you need to consider what % of the account size that is. I see no need to take the risk of individual stocks. We used a guy once who picked stocks for us. He sucked. We couldn’t afford to let him near our money, despite his slick presentation. Mutual funds have built in fees, but are probably reasonable compared to that flat fee. 

 

When you get to bigger accounts (the wife’s bank has a $10 Mil minimum account size, recently raised from $5 Mil) they charge as a percentage of the account. If they grow the account, their fees go up. Lose money and it goes down. I’m not a big fan of trying to pick stocks or trying to time the market. We put it in solid funds and let it work without anxiety. 

[Royale with Cheese]

2 minutes ago, Augie said:

 

It depends on how much they are managing, but you need to consider what % of the account size that is. I see no need to take the risk of individual stocks. We used a guy once who picked stocks for us. He sucked. We couldn’t afford to let him near our money, despite his slick presentation. Mutual funds have built in fees, but are probably reasonable compared to that flat fee. 

 

When you get to bigger accounts (the wife’s bank has a $10 Mil minimum account size, recently raised from $5 Mil) they charge as a percentage of the account. If they grow the account, their fees go up. Lose money and it goes down. I’m not a big fan of trying to pick stocks or trying to time the market. We put it in solid funds and let it work without anxiety. 

 

So essentially, long term investing is probably the best and smartest path?

[Jauronimo]

1 minute ago, Royale with Cheese said:

 

It's $1,250 is for the advisement fee regardless if I use my IRA or not.  

 

If I'm going to play the stock and use my IRA to do it, I could just sign up for Etrade or Robin myself.

Fees are usually based on a % of assets invested and range from 0% to 2% depending on style of management (Active vs passive).  What does $1,250 get you? Sounds like a newsletter with their picks.

[Augie]

2 minutes ago, Royale with Cheese said:

 

So essentially, long term investing is probably the best and smartest path?

 

There’s always the OTB!  😋