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Author: highonamt Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: investment account suggestion Date: 1/9/2004 3:31 PM
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Where would you place about 250,000 to 300,000 (after taxes) until you decided where you wanted to invest it?
The person/couple I'm advising has a great cpa but is having trouble finding a financial advisor they feel comfortable with.
They are considering placing the money into three separate money market accounts (to avoid the 100,000 limit on insurance banks have), but I bet the Fools here have some better ideas.

The couple doesn't want to rush into bad decisions. I can't make any specific suggestions except to have an emergency fund and pay off credit cards. They have been burned in the past by Merrill Lynch (high fees and no call backs on their IRA questions)so they are slow to trust any brokerage firm.

The money is meant for retirement which might be in 8-10 years.
Asset allocation has been decided (around 25 cash,55 fixed,20 stock). And getting as much in tax free investments (roth ira, etc.) as soon as possible.
I would describe the couple as somewhere between conservative to moderate as far as investments are concerned. He has SS and a pension, she has a small IRA. She does want to place it in a different company then she uses presently. They have a house mortgage, length unknown to me.
Also while they do want to keep up on a quarterly basis what is happening with their money, they don't want to have to think about any stock investments on a daily or weekly basis. They want to enjoy life.
I'm a long way from retirement, so I feel unable to help them.

I have told them to join fool.com so they can view these boards.
Where should they place this money until they make their minds up? Also, they hesitate to place all of it in the same place.

LH
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Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38455 of 76237
Subject: Re: investment account suggestion Date: 1/10/2004 4:12 PM
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My 2 cents and almost worth that much.
I know you've indicated they have some concerns about putting it all in one place but my suggestion would be to put it all in a money market fund with a major no load fund family. (Vanguard?) Then when they have decided how they want it invested they could make transfers from the MM fund to the funds selected. While I share their concerns regarding having more than $100K in a bank account I think having it with a mutual fund family is acceptable.
With this amount of money in a Vanguard account they can get some free or discounted financial planning advice from Vanguard. Similar services from other fund families may also be available.

Bob

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Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38469 of 76237
Subject: Re: investment account suggestion Date: 1/11/2004 5:33 PM
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The question is a little broad but for what it's worth...

Let's look at some options for cash...

Money Market Mutual Funds
Bank CD's
Internet Banks
Treasury Bills
Tax Exempt Money Market Funds
and of course the traditional Bank savings account

Money Market Mutual Funds
Extremely safe as they invest primarily in large bank certificates, commercial loans (short term corporate loans) and government securities.

Options:
Fidelity Spartan Money Market Fund
TIAA-CREF Money Market Fund
USAA Money Market Fund
Vanguard Money Market Fund

Bank CD's
Supra safe but they won't have access to it without penalty for the duration of the CD. You can get CD's from just about any bank and they'll typically come in 3, 6 month varieties as well as 1, 3, and 5 years. The longer the peiod the more the interest so this will depend on when they think they'll be making a decision. They're also FDIC insured but if they're extremely concerned I wouldn't put more than $80-$90k in each account so the $100k insurance covers them.

Internet Banks
The nice thing about Internet banks is they don't have the overhead of brick and mortar banks (e.g. BofA, Wells, etc.) so they can offer slightly higher interest rates. Make sure these are FDIC insured though since the risk is just a tad bit higher. Same rule would apply as for Bank CD's if they're extremely conservative.

Options
NetBank
VirtualBank
ING

Treasury Bills
Did I say supra safe before? Supra-dupra safe here. You can get these in 4 week, 3 month, 6 month increments and longer. The extra bonus is they're exempt from taxes...

Go to www.treasurydirect.gov for more info.

Tax-Exempt Money Market Funds
Pretty darn safe too and if they're in a high income tax bracket a good alternative.

Option
Fidelity Muni Money Market Fund
USAA Tax Exempt money market fund
Vanguard tax-exempt money market fund

It's really up to them and how conservative they want to be...any of the above options are very, very safe so I don't see that they could go wrong. Seems like a financial planner is a good idea and they may even want to try Motley Fools Premium subscription (http://www.fool.com/ma/index.htm?ref=topnav) for $200. There's actually a 30 day trial period that will allow them access to the boards and to a hotline that can give them additional advice depending on where they're wanting to go.

Best of luck...

Jesse


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Author: highonamt Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38472 of 76237
Subject: Re: investment account suggestion Date: 1/11/2004 9:07 PM
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The question is a little broad but for what it's worth...

Let's look at some options....

Actually this is a perfect start for them.
Thanks for the ideas and links. You included a few I had not thought of.

tnx

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Author: highonamt Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38473 of 76237
Subject: Re: investment account suggestion Date: 1/11/2004 9:08 PM
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With this amount of money in a Vanguard account they can get some free or discounted financial planning advice from Vanguard....

Discounted financial planning? I'll have to check into that.
tnx

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Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38525 of 76237
Subject: Re: investment account suggestion Date: 1/13/2004 5:13 PM
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Discounted financial planning? I'll have to check into that.

Try this link for information
http://flagship2.vanguard.com/web/planret/PlanningAdvicePublicOverview.html

Bob

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