Help, please! Where should we put the money from our house sale?

[sam kane]

We signed papers to sell our house yesterday and it is supposed to close Friday. If it closes we will have a bit less than 100k to keep somewhere. Most homes around us still cost 800k to over a million (SF Bay Area), so we are renting. Where is the safest place to put it? USAA savings bank? Some say treasuries, but others say they are not safe.

We decided to sell in July, in part, because of everything I read here about the coming economic collapse in September. Thanks to you all for the warning, you are amazing.

[tblue]

1. Buy Euros.

[gateley]

9. Somebody told me yesterday that Euros aren't all that great right now--

So if you're going to move your money into another currency, I'd check with an expert on this.

And, they always recommend gold and silver.

it's scary -- we're at a point where we don't know what is going to happen in the future. I'm almost glad I don't have to make a decision like you do -- good luck!

[Kittycat]

2. FDIC insured banks are covered up to 100K

[Myrina]

3. ... in a box under your mattress.

:hi:

[jojo54]

6. My sentiments exactly!!

[gateley]

10. But when you pull out your box of $1000 in a year or two, it might only

be worth $500.

[Myrina]

18. ... or it might be toilet paper ... but ...

... i'd rather at least have toilet paper then have the bank close and i see it on the news ...

[gateley]

24. Agree. nt

[sandnsea]

32. Same as when you pull it out of the bank

Unless they stop printing money just in time to bail on FDIC. Why not make some money in some foreign markets instead of watching your money lose value, and you know full well it's going to.

[sandnsea]

4. Foreign currencies, markets, gold, silver n/t

[gateley]

11. I think that's the route I'd take if I had the money --

I don't feel confident in any US backed ANYTHING. I'd take my money elsewhere -- out of the country.

[truedelphi]

23. Unless you really undertand foreign markets, I'd say platinum, silver, or gold.

[haele]

5. Local Credit Union. I'm not familiar with the ones in your area, though.

A Credit Union is usually the safest place to "park" it for a while, as they usually have more stringent lending practices, take less risks and invest locally rather than nationally/internationally where there's more risk. Many have low or no-fee accounts that are so similar to the big banks that you won't notice a difference in service. You might want to check some reviews online to find the best one.

Haele

[Warpy]

7. Insured CDs are a good bet

as are the clunky old savings bonds. What you want for a modest amount of money is something that will give you some interest (even though it's far below inflation right now) and that is insured.

Stuffing it in the mattress pays you nothing. While metals like gold generally hold their value through inflation or deflation, they also tend to be thief magnets. Safe deposit boxes aren't that safe, since the gummint has had a habit in the past of declaring emergency and raiding them for gold and other metals.

Your best bet is in hoping the system holds together enough for an insured account or insured bonds to stay solvent. My guess is that they will.

Good luck to all of us. We're living in interesting times.

[nykym]

8. If you do not need the mone

for say 10 years or so take a look at zero coupon bonds.

[Zenlitened]

12. FDIC-insured accounts at two or three banks/credit unions.

I'm assuming this is money you'll need for short-term living expenses.

So the issue, IMO, is preserving the money and your easy access to it.

FDIC insurance is the only way to ensure preservation of capital. (If FDIC fails, there'll be no such thing as "capital" for a good while!)

But the FDIC can take as long as it wants to re-unite you with your money if your bank fails. That's never been an issue before, but these days, who knows?

That's why I suggest splitting the cash up between two or three banks/credit unions. Then, from that starting point, decide whether savings accounts are good enough, or a mix of savings accounts, short- and longer-term CD's, etc.

You might not earn as much interest, but keeping hold of what you've got -- and being sure you can get at it when you need to -- seems to be the top priority in this climate, IMO.

[yellowdogintexas]

19. Credit Unions definitely the way to go, split up as prior poster stated.

have some readily available to assist you if the profit from the sale causes you to have to pay more income tax for 2008, put the rest in various CD or other safe items unless you really need it to be more liquid.

[TomInTib]

13. I buy old guitars

Martins, mostly, because you can always find an idiot with money who wants to brag about how he paid $80K for a guitar.

[iamahaingttta]

21. I knew I liked you, Tom!

I buy all kinds of old, weird instruments.
Don't have anything worth 80K, however.
The average is probably more like 80$

As strange as this may sound, the "best" investment is in T-bills. Helps keep the money in the country, and bolsters the dollar. Send your money out of the country, and the dollar weakens. That's my 2 cents, and that's all it's worth...

[TomInTib]

22. The $80 stuff is the best.

I bought one of my favorite guitars, a George Washburn "New Model", for $60 in 1968. It is the only one known to still inhabit the original tooled leather coffin case.

And it is not for sale.

I would love to see your collection.

Tom

[gravity]

14. In a bank

Put it in a savings account and you will be fine. Most of these fears are irrational. If you have over 100k, spread your money out over a number of banks. Treasuries and insured CDs are completely safe too.

Buying euros, gold, or commodities are risky because they can go down in value. You risk losing money, so it isn't safe as putting it into a savings account. You can lose money under your mattress if someone steals it in your home so that isn't safe either.

[sandnsea]

15. Inflation can deflate value too

Keeping money in the US has no greater guarantee than foreign markets, not anymore.

[gravity]

31. The US has one of the, if not the most, stable economies in the world

and inflation is stabling with the slowing economy. There is still some risk of inflation, but it isn't any better than anywhere else in the world, or with any other asset class.

If your number one concern is not losing money, owning cash equivalents or US treasuries is the safest way to go. There is no need to complicate it.

[A HERETIC I AM]

28. A completely prudent and sound suggestion, Gravity. As always.

Put it in a savings account and you will be fine. Most of these fears are irrational. If you have over 100k, spread your money out over a number of banks. Treasuries and insured CDs are completely safe too.

Absolutely spot on correct. If you want to put a hundred grand somewhere and be able to find a hundred grand (and maybe a little more) in six months or a year, a plain old vanilla savings account at a major bank or a CD bought from one is perfectly safe. Treasuries are actually even safer, from a pure risk POV. Unless you have 10 or 30 years, stay with Treasury Notes, Bills, Zero's, Strips and Tips. Short maturities (2 years or less). The yield sucks right now but you will get your money back and a little more. It is important to keep in mind however, that Treasury Securities trade and their value will fluctuate with market forces. This price fluctuation becomes more pronounced the longer the maturity, but they absolutely will mature "at Par" and par is whatever the face value of the bond is (Usually $1,000.00). Even if you own a 6 month CD at a bank, if you could actually see it "Marked to Market" each day, you would be surprised how much the value can swing.

Buying euros, gold, or commodities are risky because they can go down in value. You risk losing money, so it isn't safe as putting it into a savings account. You can lose money under your mattress if someone steals it in your home so that isn't safe either.

Again, absolutely correct. It amuses me that the first response to this thread was "Buy Euros!". Speculating on currency is the LAST thing the inexperienced or novice investor should do. Ditto Precious Metals. There are even fewer that should be investing in Commodities in an unmanaged way. There are ways to invest in Commodities via ETF's and Closed End Funds, etc., that give you access to professional management, but it is still an extremely risky asset class.

[whosinpower]

16. gold

gold, gold, gold.

[Emillereid]

20. Do you have any idea why gold has been going down lately?

[Dover]

25. I can't say why, but it seems to follow oil prices.

But it's also probably manipulated. I think gold DID just go up as the market crisis occurred Sunday. So don't know if it's the best time to buy or not.

[Lefty48197]

37. Why gold has been dipping in price lately:

I personally think that there were signs that the American recession had bottomed out, and that we were about to enter a (slow) upturn that would eventually settle the mortgage/housing problems. Americans were feeling somewhat optimistic about the future of the economy, thus reducing demand for "panic investment" in gold.

I haven't looked at the gold/silver prices in the last couple of days, but there's a pretty good chance that both have spiked upwards, with this week's continued collapse of America's financial industry. Now, everyday citizens have again turned extremely pessimistic about the short term future of America's economy. Thus the crash in the market, and the likely return to "panic" investments.

[Broadslidin]

17. Might try keeping U.S. Treasury coupons in the 'soiled sock' located just inside your shoe.

Meyer Lansky III sez:
Forget Liechtenstein for awhile.
The I.R.S. is pokin' around.

Have a sufficient pile of cash stacked on the table...?

Nothing like the 'ol veteran, J.P. Morgan.
http://www.jpmorgan.com/pages/jpmorgan/private_banking/corporate_executives/protected_yourself

[screembloodymurder]

26. I'd look at energy stocks.

Specifically the natural gas stocks. They're way down from their highs.

[DemReadingDU]

27. If you have loans, you could pay them off

Or pay off half the loans, and put the rest in a CD, or Treasury Bill

[SahaleArm]

29. Pay off all your debt then use HSBC or Wells Fargo.

Wells pays out 2.71% APY for its Select Rate Savings.

HSBC pays out 3.25% APY for http://www.hsbcdirect.com/1/2/1/default/learn-more/osa?code=CSM0000481&WT.ac=HBUS_CSM0000481">Online Savings Account.

Both are FDIC insured.

Watch the Option and I/O ARM's blow up then buy something after it deflates by 30-40%.

[Dover]

30. Why Wells Fargo or HSBC over others?

Do you know something the rest of us don't?

[TransitJohn]

33. I'd put at least half of it away in

an insured CD, for at least a year, maybe two, until you figure out if you want to move away, or buy another property. An insured money market account through a credit union would give you some decent interest rates, approaching inflation, for the other half, and you'd have immediate access to it.

[TransitJohn]

34. Well, scratch my advice for money market account off

Would've edited my post but editing window expired.

[hertopos]

35. Buy good variable annuity with garantees

Or,

You can create a stream of money to buy good whole life insureance from mutual life insurance company. Mutual life companies are only financial institutions which are not public. That means no market capitalizations, no market lisk at that end. Plus, their cash value investment is still heavily regulated and mostly invested in municipal bonds.

Even at AIG, their normal insurances are very safe.
People got into 'buy term invest the difference' meme and this meme is finally showing its true risk.

Good annuities and whole life cash values are one of few places with minimum return garantee around 4%. It does not seems high but it is protected from tax and there is a way to use its money at retirement without paying tax.

Get this, many banks owns insurance and many top execuitves have 412(i) funded with either annuity or whole life insuracne.

It is such a joke once people thought privatizing Social secuity was a good idea.

Hertopos

[gravity]

38. Annuities aren't going to protect your principle

There is no free lunch, and if you want to get a guaranteed return, buy a 10 year treasury bond. Variable annuities are a form of insurance, not a way to protect your capital.

[Lefty48197]

36. Buy Bonds ...SERIOUSLY!

Buy savings bonds, or even tax free municipal bonds. Normally those are investments for the wimpiest investors, but today they're the ONLY secure investment around. Fortune 500? PLEASE It's lost 20%+ in the last year, and "October" is just around the corner. Euros? Canadian dollars? Chinese Yuan? - It doesn't matter. The entire planet is now sinking into a worldwide recession due to the financial collapse in the U.S.A. Their currencies and economies are now crashing with ours. Gold? Silver? Maaaaaaaaaaaybe, but maybe not. If China slips into a major recession, then worldwide gold demand will crash bringing down or at least stabilizing the price of gold.

Bonds will only give you a couple of percentage points gain, but that's better than the stock market today. Wait until after the election. Regardless of who wins this election, Wall Street's "Looting of America" will end with the Bush administration. We may actually have a "Santa Claus" rally this year as America will vivaciously celebrate the end of the Bush administration. Until early-mid November, I'd keep my money away from the stock market. Until then, put your money in bonds and sleep well at night.

[femrap]

39. If things get as bad as some say,

I'd buy lots of toilet paper, canned goods, hand-cranked tools, and solar panels!