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You should do some more research than simply reading whatever is posted on HN or just get a financial advisor because this is a failure in financial planning th

by slg 4y ago

You should do some more research than simply reading whatever is posted on HN or just get a financial advisor because this is a failure in financial planning that is causing you to miss a lot of potential growth. No individual who would miss $250k should have that much sitting as cash in a bank account unless they are planning to buy a house or other large purchase in the next couple of months. That money should be invested somewhere even if it is just all in short term CDs or bonds if you are an extremely risk-averse person.

ChancyChance 4y ago
You're probably right.
massysett 4y ago
It's not exactly "a lot" of potential growth. Yields on short-term investments have been so close to zero over the past several years that I'd argue it has not been worth the trouble to put the money into CDs or bonds. Only lately have yields on these investments been ticking significantly above zero. The extra burden - mental, accounting, tax compliance - of acquiring additional investments is worth something, and taking on that burden for measly returns may not be worthwhile. I'm only talking about short-term investments here. The whole point of short-term investments is that the principal needs to be relatively safe - but with that, the returns are meagre as well. Simply spreading it between multiple banks may be worth it.
- slg 4y ago
  Spreading your money between multiple banks creates similar mental, accounting, and tax burdens as a simple investment would. Plus my "a lot" comment wasn't specifically connected to short term CDs. If you are going to let money sit for years, short term investments like that are the worst for growth second only to keeping everything in cash. That approach should only be taken by the most risk-averse people or people who need liquidity. Even still, OP is probably missing out on 5-figure potential gains by just doing nothing with over $250k+ for years. "A lot" is relative, but that is decent money that OP is effectively losing.
  - deleted 4y ago
    [deleted]

by slg 4y ago

ChancyChance 4y ago

You're probably right.

massysett 4y ago

It's not exactly "a lot" of potential growth. Yields on short-term investments have been so close to zero over the past several years that I'd argue it has not been worth the trouble to put the money into CDs or bonds. Only lately have yields on these investments been ticking significantly above zero. The extra burden - mental, accounting, tax compliance - of acquiring additional investments is worth something, and taking on that burden for measly returns may not be worthwhile. I'm only talking about short-term investments here. The whole point of short-term investments is that the principal needs to be relatively safe - but with that, the returns are meagre as well. Simply spreading it between multiple banks may be worth it.

slg 4y ago
Spreading your money between multiple banks creates similar mental, accounting, and tax burdens as a simple investment would. Plus my "a lot" comment wasn't specifically connected to short term CDs. If you are going to let money sit for years, short term investments like that are the worst for growth second only to keeping everything in cash. That approach should only be taken by the most risk-averse people or people who need liquidity. Even still, OP is probably missing out on 5-figure potential gains by just doing nothing with over $250k+ for years. "A lot" is relative, but that is decent money that OP is effectively losing.
- deleted 4y ago
  [deleted]