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Where would you dump money for 5 years?

Old 02-04-06, 08:07 PM
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Where would you dump money for 5 years?

Okay, I don't really have any reason for asking this, but the question was posed to myself by... myself... in the shower a few minutes ago. That's better than most poses I do in the shower. But that's another thread.

Let's say you were leaving the country for 5 years and you had to stick your money somewhere (not there) but needed it back when you returned. Obviously you're taking enough with you to get by, but let's say you sell your house, or your car, or your jockstrap collection... anything... and have a chunk of change sitting around doing nothing.

Let's pick a nice round number... $100,000.

You have $100,000 that you need back in 5 years. What do you do?

Buy a small home and rent it out?
Savings account?
Stocks?
Funds?
2 chicks at the same time and ask them to give it back in 5 years?
Hole in the ground?

Long-term investments aren't welcome because the goal is to be able to retrieve the funds upon return to buy back your home/car/jockstraps.

Thanks.
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Old 02-04-06, 08:11 PM
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So, uh... there you were, naked... in the shower... washing some of your, ah, orifices... and then you thought, hmm... if I had to stick $100,000 in cash somewhere... somewhere secret...




Err -- might I recommend a cashier's check instead?
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Old 02-04-06, 08:17 PM
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Give it to me, Thor. I'll hold onto it for you.
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Old 02-04-06, 08:26 PM
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If I were to go away for 5 years now, I would put 15% in physical silver and the rest invested in the basic materials and energy sectors.

I don't understand this statement:
"Long-term investments aren't welcome because the goal is to be able to retrieve the funds upon return to buy back your home/car/jockstraps."

I can easily sell all the long term stocks and then transfer or wire the money from the brokage account to another account to buy a home or a car.
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Old 02-04-06, 08:33 PM
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Originally Posted by zuffy
I don't understand this statement:
"Long-term investments aren't welcome . . . ."

I can easily sell all the long term stocks . . . .
I just mean putting it in 30 year bonds or a retirement fund isn't an option, or something that you would be heavily penalized to withdraw funds from. You have to pull it out in 5 years.
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Old 02-04-06, 08:48 PM
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Originally Posted by Thor Simpson
I just mean putting it in 30 year bonds or a retirement fund isn't an option, or something that you would be heavily penalized to withdraw funds from. You have to pull it out in 5 years.
Thanks for clearing it up. I thought you meant long term stock investment.
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Old 02-04-06, 08:51 PM
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Originally Posted by Kittydreamer
Give it to me, Thor. I'll hold onto it for you.






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Old 02-04-06, 08:54 PM
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I Bonds currently at 6.73% is probably your (or whoever) best bet for a safe investment.

If you are able to watch your money I would suggest Vanguard no load mutual funds... fools don't pay loads.

Last edited by Lateralus; 02-04-06 at 08:57 PM.
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Old 02-04-06, 09:08 PM
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Originally Posted by Lateralus
I Bonds currently at 6.73% is probably your (or whoever) best bet for a safe investment.

If you are able to watch your money I would suggest Vanguard no load mutual funds... fools don't pay loads.
Considering China and Japan holds 1.3 trillion dollars worth of US bonds, it will probably worth shit in the next 5 years if China decide to dump the bonds.
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Old 02-04-06, 09:19 PM
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Originally Posted by Thor Simpson
This comment is so out of line in a thread where I talk about being naked.

I need better ideas!
Mmm...naked Thor....mmmmmm :eyebrow"

Better?
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Old 02-04-06, 09:19 PM
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Originally Posted by Canadian Bacon







Damn you and your perverted mind!!!
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Old 02-04-06, 09:53 PM
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Originally Posted by Kittydreamer
Damn you and your perverted mind!!!
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Old 02-04-06, 09:57 PM
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Old 02-04-06, 10:00 PM
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Originally Posted by WhattheFFF
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racial slurs are frowned upon here
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Old 02-04-06, 10:35 PM
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Old 02-04-06, 10:44 PM
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Originally Posted by Vandelay_Inds
ok, I have a complementary question:

what would you consider a reasonable return to be for that 5 year investment?

at the minimum the 5 year t-bill rate
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Old 02-04-06, 11:03 PM
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Old 02-04-06, 11:15 PM
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Originally Posted by zuffy
Considering China and Japan holds 1.3 trillion dollars worth of US bonds, it will probably worth shit in the next 5 years if China decide to dump the bonds.
The value of bonds does not change if you hold it until maturity. There is also almost no risk of the US defaulting on bonds, so I don't know how you could say they would be worth shit. The investor would get back the original outlay, as well as have received interest every year. It's possible that interest rates could rise, and the investor could miss out on receiving a higher rate of interest, but it's unlikely that a 5 year bond would fail to keep up with inflation. If that's really a concern there are bonds that are tied to inflation which would completely eliminate the risk.

It's extremely unlikely that China would decide to stop investing in the US. If the US economy tanks, China would lose it's biggest market, causing their own economy to tank.
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Old 02-04-06, 11:24 PM
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Thor - you need to tell us what level of risk you are willing to take.

on a scale of 1 to 10,

1 (safest) being you put cash in a safe deposit box and swallow the key (no return on investment)

10 (you are crazy with risk) being that you give all your money to a crack dealer and expect $300k back in 5 years

(it is understood that more risk means you want to earn more interest than less risk)

You also need to tell us how much effort you want to put in. buying a house and renting it would go on the really high effort side. Dumping money in an account of some sorts and walking away the easiest.

On the # 2 side of the scale, I would go with ING direct or HSBC or Emigrant (FDIC insured savings) also here put - US savings bonds

Going a little more out - Canadian Savings bonds http://www.csb.gc.ca/eng/bonds_csb.asp (I think you will gain not only interest income in 5 years, but also currency exchange. The canadian dollar with be worth more compared to the US dollar)

going out into the 5-6-7 range - mutual funds - no load preferred, but cheap investors in the know these days are going with ETFs to avoid mutual fund management fees (no load doesn't mean free). Stick with a larger scale investment for less risk (S&P or Index 1000 or some larger Vanguard or Fidelity fund)


Going out further than that on the scale into individual stocks (requires much research), smaller funds and ETFs or something with foreign invesment. I would put real estate out here at this point as well. I see a crash coming in 5 years, depending on market depends how bad. In DC right now there are easily 10 times the houses sitting on the market right now than were this time 1 year ago.

or you can acutally go out and find a crack dealer or meth dealer and see what magic you can work.
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Old 02-04-06, 11:26 PM
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Originally Posted by zuffy
Considering China and Japan holds 1.3 trillion dollars worth of US bonds, it will probably worth shit in the next 5 years if China decide to dump the bonds.
What do you mean by it? If you mean the bond, you are not entirely correct What will be worth shit is the US dollar itself

If that happens we have bigger problems.



Originally Posted by slappypete
It's extremely unlikely that China would decide to stop investing in the US. If the US economy tanks, China would lose it's biggest market, causing their own economy to tank.
China has already annouced they are going to reduce US investments significantly.
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Old 02-04-06, 11:32 PM
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Originally Posted by 4KRG
Thor - you need to tell us what level of risk you are willing to take.
This is purely theoretical. I'm just wondering what risks others would take and where they think their money would have the best return. I thought a home would be the big seller here, but I guess not.

The down sides to a home in this scenario of course are you would have to have someone managing the home and taking care of the finances (which would have costs involved) and any closing and selling costs. Perhaps over a 5 year period that will not yield a positive return and, you're right, it clearly has the most work involved unless you have a family member or good friend looking for a place to live that will take care of everything for you. Then it might be worth looking at (but probably not if you were just looking to take on tenants).

Any other great ideas? For me, I think I would want very little risk to absolultely ensure that I at least get the 100K back. That's not the case for smaller investments over time, but in this scenario, I gotta go with low risk as my choice.
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Old 02-05-06, 02:43 AM
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Originally Posted by Thor Simpson
This is purely theoretical. I'm just wondering what risks others would take and where they think their money would have the best return. I thought a home would be the big seller here, but I guess not.

The down sides to a home in this scenario of course are you would have to have someone managing the home and taking care of the finances (which would have costs involved) and any closing and selling costs. Perhaps over a 5 year period that will not yield a positive return and, you're right, it clearly has the most work involved unless you have a family member or good friend looking for a place to live that will take care of everything for you. Then it might be worth looking at (but probably not if you were just looking to take on tenants).

Any other great ideas? For me, I think I would want very little risk to absolultely ensure that I at least get the 100K back. That's not the case for smaller investments over time, but in this scenario, I gotta go with low risk as my choice.
Not many people would go for the home idea because right now also because the real estate market is softening. And with 100K, you're not going to get too much house/apt for that amount, esp up there in Seattle. It's questionable whether rent could even cover your mortgage.

Interestingly, Portland, IMHO, will be bucking the drop in price. They have yet to drop, and I think they really won't drop much. In large part because, while Seattlelites and San Fransiscans sell their house for huge profits, they decide to up and move to Portland which is still West Coast, still convenient, and still allows them to maintain a similar lifestyle. So I'm staying put in Portland because I think it's still up and coming. The condo craze here is ridiculous. Still selling out whole condos before they're even built, even at prices Portlanders consider crazy. Though, if you were to put the same units in SF or Seattle, they'd be considered dirt cheap.

Anyhoo, to answer your question, if I wanted to reduce my risk as much as possible, treasury bonds would be the way to go, as mentioned above. If I felt like the economy wasn't going to absolutely tank in the next 5 years, I would go with an S&P500 index fund. Sleep easy at night knowing that VERY few mutual funds outperform the index funds. You probably won't double your money, but a 5-10%/year gain is a reasonable expectation. And thanks to the magic of compounding gains, you stand a good chance of a 50% gain after the 5 years.

Of course, if you're feeling lucky, you can always try picking the stocks you think will do well. If you did that, probably it'd be a good idea to pick large companies that will be around forever, and preferably ones that pay dividends. Companies like GE, Walmart, 3M, Starbucks, Coca-Cola. As Jim Cramer says - best of breed! BOOYAH!
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Old 02-05-06, 08:06 AM
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Would you have access to the internet to make changes?
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Old 02-05-06, 08:39 AM
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Old 02-05-06, 08:48 AM
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Originally Posted by ChiTownAbs, Inc
Would you have access to the internet to make changes?
I'll say yes. But only once a month or so, so daytrading isn't an option. You could manage a mutual fund or something though.
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