Where to put the money?

[farmmilkmama]

I wasnt' sure where the right place was to stick this question, but I'm sure it will end up in the right place if this isn't it...

My husband and I are finally at a point that most of his paycheck will be going into "savings" for the future farm. We have no credit cards, car payments, etc. The question that came up last night was...where do we put the money? Is it smart to put it all in the bank? Should we be "stuffing it under the mattress?" I figured the smarties here would have some good advice...

[rivahmom]

The state of our current economy has left me distrustful of most banks. I do not have any savings in the bank because I fear a bank holiday if things get any worse. We have all long term savings invested in precious metals to preserve its value. All emergency or short term savings is in cash tucked "under the mattress". This is just what we do. I am not a financial advisor in anyway. Good luck. :)

[patriotchick]

you get no real return for keeping your money in the bank, if you put in 1000 bucks, they loan that amount out ten times, and pay you very little in interest on your savings..all it takes is for two of those ten people to default, and your money isnt safe...yes protection by FDIC is great, but how fast do you think you will get that money back from the government if your bank fails?? I keep mine at home in a fire proof safe, and have gold and silver as well- as a hedge against dollar collapse.

[johnjmw]

IMO there are three things to consider or decide.
If you believe this is just a temporary recession/depression then some stocks could be a good bet (this is where my money is). The price on Stocks or mutual funds are both really low (I read this as on sale) right now. Check Kiplingers mutual fund guide. These would be used for saving for items 5-10 years out usually.
If you think things are still going to get worse, money market accounts. They don't have as high of a return as a good mutual fund but are safer and you usually wont loose the money you put in and they pay better than a CD the banks offer. This is usually for shorter term saving and for the emergency fund which many believe should be 3-6months living expenses. Some even offer a check writing feature at no cost.
Neither of those are FDIC insured, If that is what you are looking for then the bank is where to put the money, but don't forget, the FDIC has up to 99 years to pay on those deposits. The interest rates are also really low, even CDs are only going for only about 4%.
Oh, yes, always keep at least a cushion of cash around the house. In a real emergency/power outage ect having a bit on hand can be a life saver. I know a more than a few people who have enough cash on hand to tide them over for at least a month to cover all their bills. That way if the bank closes its doors they can cover their mortgage, power and food bills till things settle down.
Now if you believe the TEOTWAWKI is finally here (Gloom and Doom senerio). Cash will have no value at all, there will be no banks, probably no goverment, utilities will fail quickly and in that case I don't know what would be best.

Like many with opinions I am not a financial adviser, but I've read a little and been to a few financial seminars.
John

[1lifetolive]

The FDIC is under funded , so beware.
Here is a FDIC link to banks that have failed.
There have been 25 this year.
http://www.fdic.gov/bank/individual/failed/banklist.html
If you go to this link:
http://www.bankrate.com/
On the right there is "Hot Topic"
under that is "Safe & Sound Rating click on that
and you can get the star rating for any bank.
Keep in mind this info is from the past quarter
and things can change fast

[1lifetolive]

Just found this:
http://community.seattletimes.nwsource.com/archive/?date=19911122&slug=1318787
If I understand the article, we (The Tax payer) have been funding the fund since 1991.

[Buck]

you get no real return for keeping your money in the bank, if you put in 1000 bucks, they loan that amount out ten times, and pay you very little in interest on your savings..all it takes is for two of those ten people to default, and your money isnt safe...yes protection by FDIC is great, but how fast do you think you will get that money back from the government if your bank fails?? I keep mine at home in a fire proof safe, and have gold and silver as well- as a hedge against dollar collapse.

Yep, the "mattress" (safe) is the best place for your money today. However,
even that is not "safe" due to massive printing of so much paper money.
When print more you make each dollar buy less.

IMO, now is the time to own barter good or our homes/cars. That, said
nothing you own except what you can carry is safe to own. "Buy" land?
Don't make me laugh. NO ONE except the gov't will ever own the land.
Rmember eminient domain?

So there IMO is no answer that will work except what you can carry if
it comes to that......and it very well might.

[farmmilkmama]

Thanks for the advice. I KNEW there were intelligent people somewhere in the world!!

[gump]

there are too many variables you have left out of your original question. *the most important being - what is the goal of your savings? *retirement? *savings towards a house? *savings for an emergency?

oh and for everyone saying they are not financial advisors, consider that a compliment. *most of 'em are nothing more than glorified sales people that get rich off you and rob you of return.

[Terri]

Do not put it all in one place.

A few CD's is god, a safe is good, and, heck, you might even want to buy a few depressed stocks!

By putting it in different places, you are safer than if you put it all in one place.

Because interest rates drop, the stock market drops, and inflation migh decrease the value of what you have in the safe. And, the price of gold has been going up rather dramatically: it MIGHT be topped out! Maybe, anyways!

[RangerRick]

Actually, I'm starting to warm a little to silver coin with the spot now under $11 and I think it is being artifically being held down so as a $1000 face bag of junk quarters can be had for like $10,400 now might be a good time to pick up a little "spare change" as IMHO the price will see a good upside within the next year or two.

Rick

[Buck]

Actually, I'm starting to warm a little to silver coin with the spot now under $11 and I think it is being artifically being held down so as a $1000 face bag of junk quarters can be had for like $10,400 now might be a good time to pick up a little "spare change" as IMHO the price will see a good upside within the next year or two.

Rick

Very good suggestion for the Joe/Jane Average's to follow. "JUNK" silver
coins is a very stable way to hold "wealth" in these uncertain times.

[gump]

Actually, I'm starting to warm a little to silver coin with the spot now under $11 and I think it is being artifically being held down so as a $1000 face bag of junk quarters can be had for like $10,400 now might be a good time to pick up a little "spare change" as IMHO the price will see a good upside within the next year or two.

Rick

Gold & silver coins are being collected at a pretty good clip. Silver hit $20 before the melt down. The Mint is having a hard time keeping some inventory.

I wouldn't put my life savings in either it but I nibble from time to time if I see a special and I generally stick with the popular choices in case I want to sell to another person.

[flourgirl]

If you are thinking of investing Organic Valley Coop is a great place to invest. It is privately held and has great interest rates.

[Anon001]

keep in mind that FDIC may say you are insured for a set amount, but what is it now? Is it still 100K? If so, for example. your bank goes bust. Yeah.. they will insure you for 100K but only pay so much on the dollar of the 100K. let's say they say that you have 100K and theyare going to pay 10 cents on the dollar. You get 10,000. The payout rate varies based on bank assets and liabilities and other factors.

Mutual Funds are federally insured and at MUCH higher rates than bank deposits. For example when I was a financial advisor in the 80's, bank deposits were federally insured up to 100K but Mutual Fund deposits were federally insured up to 500K...

I don't keep money in a bank. I keep what little I have in Mutual Funds and in Money Market.

It all depends on your goals. If you take into account the last 70 years of the history of Wall Street, the average gain is 11% per year.
Paul

[LABeekeeper]

I too am saving for my farm and further expansion of my honey production business, Golden Delight Honey.

Take a look at ING Direct. They have CDs that don't require an arm and a leg investment, e.g., you can set up a CD for $100.00 or less. They offer many different interest rates based on the time you want your cash invested. They also have savings accounts that pay more interest than banks. Also 401(k), home equity, home mortgage, etc.

http://home.ingdirect.com/

I also use Sharebuilder to buy stocks. Sharebuilder which is owned by ING, allows stock and ETF investments for as little as $1.00 at a time to as much as you want. They have 3 plans from free to $20.00 per month. You can fund your investments through your regular bank checking account or the money market you get with Sharebuilder. They also have Roth and standard IRAs.

http://www.sharebuilder.com/

Although I don't earn interest, all change I get when using cash and coins I find in the parking lots go into a big glass jug. You will be surprised how fast it adds up. Great fund for unexpected bills, approaching hurricanes when ATMs run out of funds days before the storm, etc.

[Michael32170]

I disagree with most of the above statements. You do need to do some research to determine which banks are solvent.

I'm using Charles Schwab. They claim to have little effect from the crisis. If you have more than $100,000 I'd make several accounts, or even find other brokers/bankers.

The advantage to schwab is you can get CDs from most banks in your account at schwab. http://www.schwab.com


But, research carefully.