5 ms·

Where should one keep their money besides a bank? Investment vehicles? Somewhere else?

antonius 13y ago
Depends on how you handle your finances and carry risk. If you keep 100% of your short-term assets in a bank and it goes under, under Canadian banking rules (where I'm from), only $100,000 is covered by the government. Same goes with investing all your money into a specific stock, if the stock performs poorly, your net worth takes a hit.
- marcomassaro 13y ago
  Agreed - so that begs the question: where does somebody who is making 500k or even a million per year keep their money to 1) have it easily accessible for purchasing things and 2) safe?
  - sukuriant 13y ago
    Define "easily accessible". Does a few days later count? If so, the stock market isn't a bad place for money
  - mikeryan 13y ago
    FDIC insurance is generally on a per-bank basis. You could have multiple accounts across banks each up to $250k. Generally though there's things like Brokerage Accounts etc which offer higher levels of insurance (SIPC) and easy mechanisms to spread monies across several banks and account services (CDARS for CDs and MMAX for money market accounts). At that point hopefully you have someone managing your money wisely to help navigate these kinds of things.
orik 13y ago
Always have some cash. You'll never know when you'll need it.
- big_maybe 13y ago
  Like for when you sever a finger in a kitchen accident and the surgeon won't agree to re-attach within the 6-hour window of feasibility unless you pay him up front in cash. (Really happened).
  - orik 13y ago
    You probably won't ever see this but I'd love to hear this story if you do see it!
wonderyak 13y ago
Keeping money in a bank is 'ok' until you hit the insured limit. 'Safe' stocks (utilities, etc), precious metals and real estate are all nominally safe investments as well.
this_user 13y ago
Depends on what your objectives are. If you would like to increase the interest received on your money, then holding a portfolio of value stocks or an index ETF will outperform your bank account by a large margin over time. This takes very little effort, but will suffer from the occasional (large) drawdown that you have to sit out or this strategy won't work. If your primary objective is capital conservation then buying high quality debt of countries would be a good idea. Singapore or Switzerland are good candidates if you consider it a real possibility that the US could default on its obligations. Otherwise you could hold Treasury bills and roll them over once they mature or you could use an ETF like SHY that holds short-term Treasury bonds. You could also buy precious metals if you are convinced that civilisation is going to end in the foreseeable future. Drawbacks are fluctuating prices and the complete lack of interest payments.
- sliverstorm 13y ago
  Weren't we talking about liquid assets? I don't count ETF's as liquid. Even if you can buy/sell them freely, have you ever actually tried to take money out of a brokerage? "Liquid" is the last word I would use.

Depends on how you handle your finances and carry risk. If you keep 100% of your short-term assets in a bank and it goes under, under Canadian banking rules (where I'm from), only $100,000 is covered by the government. Same goes with investing all your money into a specific stock, if the stock performs poorly, your net worth takes a hit.

marcomassaro 13y ago
Agreed - so that begs the question: where does somebody who is making 500k or even a million per year keep their money to 1) have it easily accessible for purchasing things and 2) safe?
- sukuriant 13y ago
  Define "easily accessible". Does a few days later count? If so, the stock market isn't a bad place for money
- mikeryan 13y ago
  FDIC insurance is generally on a per-bank basis. You could have multiple accounts across banks each up to $250k. Generally though there's things like Brokerage Accounts etc which offer higher levels of insurance (SIPC) and easy mechanisms to spread monies across several banks and account services (CDARS for CDs and MMAX for money market accounts). At that point hopefully you have someone managing your money wisely to help navigate these kinds of things.

orik 13y ago

Always have some cash. You'll never know when you'll need it.

big_maybe 13y ago
Like for when you sever a finger in a kitchen accident and the surgeon won't agree to re-attach within the 6-hour window of feasibility unless you pay him up front in cash. (Really happened).
- orik 13y ago
  You probably won't ever see this but I'd love to hear this story if you do see it!

wonderyak 13y ago

Keeping money in a bank is 'ok' until you hit the insured limit. 'Safe' stocks (utilities, etc), precious metals and real estate are all nominally safe investments as well.

this_user 13y ago

Depends on what your objectives are. If you would like to increase the interest received on your money, then holding a portfolio of value stocks or an index ETF will outperform your bank account by a large margin over time. This takes very little effort, but will suffer from the occasional (large) drawdown that you have to sit out or this strategy won't work. If your primary objective is capital conservation then buying high quality debt of countries would be a good idea. Singapore or Switzerland are good candidates if you consider it a real possibility that the US could default on its obligations. Otherwise you could hold Treasury bills and roll them over once they mature or you could use an ETF like SHY that holds short-term Treasury bonds. You could also buy precious metals if you are convinced that civilisation is going to end in the foreseeable future. Drawbacks are fluctuating prices and the complete lack of interest payments.

sliverstorm 13y ago
Weren't we talking about liquid assets? I don't count ETF's as liquid. Even if you can buy/sell them freely, have you ever actually tried to take money out of a brokerage? "Liquid" is the last word I would use.