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Thread: So, for those with big cash in the bank.... what ..

  1. #1

    So, for those with big cash in the bank.... what ..

    Curious -- for those with a large amount of cash in the bank ... should they be worried with what is happening in Greece?

    I imagine, whats the dominoes start falling -- the market will be up for grabs, wholesale.... good time to invest/buy... but, if there is liquid sitting in a bank, lets say Citi or BoA etc.... should we be worried, or just prepared to get it out.

    I ask because it seems one has to "call" there bank and set up an appointment to remove anything greater than 10k and above etc.. you can't just go in and take out your money etc...



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  3. #2
    Quote Originally Posted by Lord Xar View Post
    Curious -- for those with a large amount of cash in the bank ... should they be worried with what is happening in Greece?

    I imagine, whats the dominoes start falling -- the market will be up for grabs, wholesale.... good time to invest/buy... but, if there is liquid sitting in a bank, lets say Citi or BoA etc.... should we be worried, or just prepared to get it out.

    I ask because it seems one has to "call" there bank and set up an appointment to remove anything greater than 10k and above etc.. you can't just go in and take out your money etc...
    I know some banks that require manager approval before you can withdraw >$2k cash. $10k is also the reporting limit, where banks must document and detail the transaction for the Feds (AML). They also file SAR (suspicious activity reports) for transactions <$10k because you can get nailed for 'structuring' your withdrawals to not trigger the $10k reporting requirement. You're a felon if you do and a felon if you don't.

    Anyhow, to your original question, I don't think there will be a bank holiday in the US anytime soon, as we're the dollar printer and 1/0 generator of the world, which at the current moment in time, is still the world's pseudo reserve currency. But, i don't trust banks/bankers/government.

    Recommendation: Keep only what you need to pay bills in your account. Withdraw the rest and buy some gold, silver and lead and stash the rest of your in a good safe (buy one if you don't already have). Cash isn't earning any interest in the bank or in your safe, but remember, if you don't HOLD it, you don't OWN it. As the Greeks just learned, it's better to be 2 years early than one minute late in getting to the bank to withdraw your funds.

    If you're looking for a good deal for an investment, I'd still stay away from equities. Stocks are very much overvalued due to 7 years of QE. Remember, you can always go and deposit a large sum of cash and the funds are immediately available if you need to make a large transaction requiring a bank wire.

    If you must invest, do the balanced portfolio; 25% in an indexed fund (SP500/DOW); 25% in bonds; 25% in PMs; 25% cash. you ride up with stocks, are hedged for a drop in equities, hedged for inflation, hedged for outright default/collapse.

    Finally, if you have cash and have any debt, pay that debt off pronto. The return on that 'investment' is greater than what you can get in the stock market, plus it improves your free cash flow.

  4. #3
    Fertile land, guns, precious metals, fine art....

  5. #4
    Quote Originally Posted by ghengis86 View Post
    If you must invest, do the balanced portfolio; 25% in an indexed fund (SP500/DOW); 25% in bonds; 25% in PMs; 25% cash. you ride up with stocks, are hedged for a drop in equities, hedged for inflation, hedged for outright default/collapse.
    +1!

    Thumbs-up to that; it's been a great plan for me.

    All banks today are inherently bankrupt. People should be aware of that, at least, in making financial decisions involving banks. I'm not saying never use banks. But be aware that there is risk involved. Be aware that your bank or credit union is, at this very moment, completely and hopelessly bankrupt.
    Last edited by helmuth_hubener; 06-30-2015 at 12:14 PM.

  6. #5
    Quote Originally Posted by The Northbreather View Post
    Fertile land, guns, precious metals, fine art....
    Fine art is usually a terrible investment. Unless you just want something pretty to look at.

  7. #6
    I'm not rich, so all I do is take out like 400 bucks from the atm every week or two throw 300 in the safe, and spend the 100 as walking around money. Then I have some bitcorns. Then a small amount of silver.

  8. #7
    Quote Originally Posted by Zippyjuan View Post
    Fine art is usually a terrible investment. Unless you just want something pretty to look at.
    All that I have has appreciated and I'm thinking of liquidating

  9. #8
    If you have "big cash" in liquid accounts like checking, savings, CDs, etc., then you've already made some pretty serious investment mistakes.



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  11. #9
    Quote Originally Posted by The Northbreather View Post
    All that I have has appreciated and I'm thinking of liquidating
    Art is an investment for boom times, not hard times. But then I am an art ignoramus and would be ripped off if I tried to invest even in boom times. Same goes for numismatic coins.

    Near the end of the Civil War, Southerners with money who could see the writing on the wall tried to figure out how to invest their money so it couldn't be stolen by the Yankees. Some folks used their money to buy vast numbers of bricks, figuring that they would be useful in reconstruction but too low in value density to be worth stealing. Of course a feller needs a place to put them bricks.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  12. #10
    Quote Originally Posted by TheCount View Post
    If you have "big cash" in liquid accounts like checking, savings, CDs, etc., then you've already made some pretty serious investment mistakes.
    OK, you're right, at least according to orthodoxy, but then again "big" is very relative, isn't it? According to orthodox standard investment advice, a young person should first -- before anything else, before thinking about investing -- save up an emergency fund. Some say eight months, many say six months. It will vary by the advisor, but six months is very typical; probably the most common financial advice.

    So, if a 21-year-old goes out in the wide, wide world and starts his career, and faithfully saves 10% of his salary per year (another standard, mainstay piece of advice you'll hear from financial professionals) building up his emergency fund as he's been told, he will be in cash for, let's see, about 4.5 years! His portfolio is 100% cash! 100%! And that's for a big chunk of his working years: 10% of them if he works until until 65. What's more, it's during the years that would be much, much, much more valuable to him to be investing vs. later years from a pure theoretical/mathematical perspective, due to the extreme power and leverage of compound interest over long periods of time. $10,000 invested when 21 is going to amount to far more wealth for him in the end than $10,000 invested when 50. So the amount of his life savings is not going to be 10% lower, it might be 40% or 50% lower, or more.

    So, this young person has "big cash," from his perspective, in his liquid savings account. And yet, according to orthodoxy, has he "made some pretty serious investment mistakes"? Not at all! He's followed the orthodoxy to a T.

    Just something to think about. I'm not saying to not have an emergency fund. There's just a lot to consider in investing.

    And here's another thing to think about: according to a 2014 survey, people with more than $1 million in liquid investible assets (that excludes their primary residences and collectibles) have about 40% in cash. A separate 2013 survey showed the same thing (39%). So, who is wrong: the rich, or the mainstream advisors? The people who are actually wealthy, or the professionals purporting to tell us how to become wealthy when they themselves are not wealthy? Hmm. As for me, I'd tend to give more credence to the successful doers than the flapping mouths. Results matter.

  13. #11
    You have no cash in the bank. You have computer digits that may or may not be redeemed for paper currency, at the bank's discretion.

    Carry on.

    Oh, and buy physical gold. Once the global reserve status of the dollar is formally ended late this year, gold, in nominal dollars, will go waaaaay up. It'll actually be because the dollar is going waaaaaay down but the end result is the same.
    Last edited by devil21; 07-04-2015 at 02:05 PM.
    "Let it not be said that we did nothing."-Ron Paul

    "We have set them on the hobby-horse of an idea about the absorption of individuality by the symbolic unit of COLLECTIVISM. They have never yet and they never will have the sense to reflect that this hobby-horse is a manifest violation of the most important law of nature, which has established from the very creation of the world one unit unlike another and precisely for the purpose of instituting individuality."- A Quote From Some Old Book

  14. #12
    Quote Originally Posted by Acala View Post
    Art is an investment for boom times, not hard times. But then I am an art ignoramus and would be ripped off if I tried to invest even in boom times. Same goes for numismatic coins.

    Near the end of the Civil War, Southerners with money who could see the writing on the wall tried to figure out how to invest their money so it couldn't be stolen by the Yankees. Some folks used their money to buy vast numbers of bricks, figuring that they would be useful in reconstruction but too low in value density to be worth stealing. Of course a feller needs a place to put them bricks.
    I usually have a spot that can be leased cheap for brick storage .

  15. #13
    Quote Originally Posted by helmuth_hubener View Post
    ...
    I don't think anyone refers to an emergency fund as big cash.

    I think emergency funds as 100% liquid cash are a bad idea, especially now that invested money is more liquid than ever before. The days of 'call your broker, wait 2 weeks for funds' are over. I can get money out of a mutual fund in two days. As a result, I'm a proponent of a staged approach to emergency funds... have enough money in pure cash to last you until you can get money out of your next most liquid asset, which should last until you can liquidate your third most liquid asset, and so on.


    As for those people with more than $1 million in liquid assets, I would say that at a certain income, the need to invest 'correctly' to maximize gains diminishes.

  16. #14
    Quote Originally Posted by devil21 View Post
    You have no cash in the bank. You have computer digits that may or may not be redeemed for paper currency, at the bank's discretion.

    Carry on.
    Winner winner chicken dinner

  17. #15
    Quote Originally Posted by TheCount View Post
    I don't think anyone refers to an emergency fund as big cash.
    That's why I said you were right; I agree with you. I already knew this would be your response, and that is why I already agreed with you.

    I was just giving a little bit different perspective. Namely: "big" is relative, isn't it? From the point of view of the individual, I think that yes, it is. 100% is a big number. If an amount of money is 100% of your life savings that you worked hard to save for many years, and what's more if you cannot afford to lose it, then so what if the amount is "only" $10,000 and no one would say that's big? It's very big to you!

    It seems you are trying to criticize a very narrow, specific group of people for having "big cash". You don't want to criticize people with $10,000 of cash in a checking account, because you understand hey, that's not really that much, the practicality & convenience can be worth it, but you also don't want to criticize people with $400,000 dollars of cash, because after all, who are we to criticize them, they must be doing something right, and they don't need to maximize gains. So it's only people in the middle with maybe $50,000 in cash who really do need to maximize returns and who shouldn't have cash.

    Anyway, all that said, the more important point is that I do actually agree with you that rather than saving up a 100% cash emergency fund for a long period of time, it would be a good idea to start investing as soon as possible. And then you can get a return (hopefully/probably/in theory) on that savings, rather than it wasting away in a normal checking account. So... there we go. We're on the same page and you make good points about liquidity. Of course, that doesn't eliminate volatility, and plus there are tax implications, but hopefully you don't need to dip into your savings, it just accumulates there year after year.

  18. #16
    Quote Originally Posted by helmuth_hubener View Post
    It seems you are trying to criticize a very narrow, specific group of people for having "big cash". You don't want to criticize people with $10,000 of cash in a checking account, because you understand hey, that's not really that much
    Depends on monthly expenses... that may be too much.



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  20. #17
    I keep no cash and dump everything from my direct deposit within 1 to 13 days .

  21. #18
    Thanks for your replies...

    I have always been very cautious with monies. I never really like to take risks.

    Currently, I am about 40% cash, 40% 401k, 20% precious metals

    To be honest, with the economy on the verge of disaster for the past 8 years ( a lot of 'omg, this is gonna be disasterous!'), I've been really really cautious.. but my cash is just sitting, and my 401k is off the hook.... though, when that drops.. then what? CD's are giving terrible returns (from what I have seen)....so, ....

    If/when things go south this time around, I intend on taking advantage.... something I didn't do in 2007/2008, though I should have. I would have been in a great position today. So, when things are on firesale - hopefully that liquid will be worth the sitting its' been doing.

  22. #19
    I think soon, post-Greece freakout, would be a good time to drop some of that cash into the 401K.

    CDs give terrible returns, but it's still a better return than just sitting in your checking account, and there's no risk whatsoever. I typically keep my 'emergency fund' in CDs. If I ever need it, I'll just break the CD and lose the interest (oh noes, muh 1%).

  23. #20
    People should have enough money to be able to pay your bills for the next six to nine months in some sort of liquid account as an emergency fund in case you are unable to work for whatever reason- CDs, savings or checking accounts.

  24. #21
    Just buy physical gold (and silver) while you still can.
    Last edited by devil21; 07-04-2015 at 02:20 PM.
    "Let it not be said that we did nothing."-Ron Paul

    "We have set them on the hobby-horse of an idea about the absorption of individuality by the symbolic unit of COLLECTIVISM. They have never yet and they never will have the sense to reflect that this hobby-horse is a manifest violation of the most important law of nature, which has established from the very creation of the world one unit unlike another and precisely for the purpose of instituting individuality."- A Quote From Some Old Book

  25. #22
    Afraid it is all going to disappear?

  26. #23
    Quote Originally Posted by Zippyjuan View Post
    Afraid it is all going to disappear?
    Something like that. Or just not be available at the price people can afford. Is there a difference?
    Last edited by devil21; 07-04-2015 at 02:21 PM.
    "Let it not be said that we did nothing."-Ron Paul

    "We have set them on the hobby-horse of an idea about the absorption of individuality by the symbolic unit of COLLECTIVISM. They have never yet and they never will have the sense to reflect that this hobby-horse is a manifest violation of the most important law of nature, which has established from the very creation of the world one unit unlike another and precisely for the purpose of instituting individuality."- A Quote From Some Old Book

  27. #24
    What would you consider an "unaffordable"? $1000 an ounce? $5,000? You don't have to buy a kilogram bar of it. Of course if nobody can afford it, demand will fall and the price will too.



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  29. #25
    Quote Originally Posted by TheCount View Post
    I think soon, post-Greece freakout, would be a good time to drop some of that cash into the 401K.

    CDs give terrible returns, but it's still a better return than just sitting in your checking account, and there's no risk whatsoever. I typically keep my 'emergency fund' in CDs. If I ever need it, I'll just break the CD and lose the interest (oh noes, muh 1%).
    Do you mean when things "do crash", then investing at wholesale prices? I can't see investing "more" before the crash -- I"d just lose that, right?

    Also, I have some accounts at scrott-trade and fidelity investments, not doing much -- but I imagine with things start to fall, use those avenues to invest. As putting in a 401k has limits.

  30. #26
    By waiting until the next crash to invest, people are giving up some pretty good gains. Question for those who are waiting- did you invest lots of money in 2008 when the last crash hit? Or are you just making excuses to yourself?

    You could try "dollar cost averaging"- that is investing fixed amounts at regular time intervals- say $100 a month. You get fewer shares of whatever when prices are high and you pick up more shares when they go down.

  31. #27
    Trust me on this-if you want your kids or someone to have a decent inheritance, physical holding is the way to go.
    Those who want liberty must organize as effectively as those who want tyranny. -- Iyad el Baghdadi

  32. #28
    I wouldn't ask this forum. In 2008 they would have told you to withdraw all that cash and inevitably lose a portion of it in precious metals.

  33. #29
    Quote Originally Posted by fr33 View Post
    I wouldn't ask this forum. In 2008 they would have told you to withdraw all that cash and inevitably lose a portion of it in precious metals.
    2008 to 2011' you would have done well.
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  34. #30
    Quote Originally Posted by Danke View Post
    2008 to 2011' you would have done well.
    3 years vs 7 years.

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