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Registered
Join Date: Aug 2000
Location: Palm Beach, Florida, USA
Posts: 7,713
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Just made big investment, what do you think?
Just wired the money out a few minutes ago. Details are a guarenteed return of just over 5%, tax free with about an 18 year term. Not a historic rate of return, but not bad for a guarenteed investment. I'm thinking that the market is going sideways for a few years, and may go down yet in the short term, so a secure fixed investment makes sence.
This will be maybe 20% of our total investment protfolio. Most of the rest is in stocks through retirement funds and real estate. So what do you think. Is there something better than a fixed 5% with no tax consequences guarenteed out there?
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MRM 1994 Carrera |
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06-10-2009, 11:35 AM
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Join Date: Apr 2001
Location: Linn County, Oregon
Posts: 48,874
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No name of investment...no opinion.
(edit) tho I think putting 20% of a portfolio in any single investment is unwise.
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"Now, to put a water-cooled engine in the rear and to have a radiator in the front, that's not very intelligent." -Ferry Porsche (PANO, Oct. '73) (I, Paul D. have loved this quote since 1973. It will remain as long as I post here.) |
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06-10-2009, 11:38 AM
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Join Date: Jun 2005
Location: Hamburg & Vancouver
Posts: 7,693
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Depends, depends, depends. 18 years is a very long time. Are you locked in? Are there early redemption penalties?
And we're heading into inflationary times—where 5% may seem very low. On the other hand, who ever really knows? It's all a crapshoot.
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_____________________ These are my principles. If you don't like them, I have others.—Groucho Marx |
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06-10-2009, 11:45 AM
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Guaranteed by who? What is the investment. 5% could look very low in a few years. We'll see.
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06-10-2009, 11:55 AM
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THE IRONMAN
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When it's too nice to be true....that is.
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1984 911 CARRERA RUBY RED TARGA SW CHIPPED-BURSCH CATBYPASS MONTY FREE FLOW EXHAUST <IN GAS WE TRUST> |
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06-10-2009, 11:56 AM
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Dog-faced pony soldier
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Agreed. I suspect we're going to see inflation rates of 15-20% a year in a couple of years. 5% will lose you money bigtime.
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A car, a 911, a motorbike and a few surfboards Black Cars Matter |
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06-10-2009, 11:56 AM
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Information Junky
Join Date: Mar 2001
Location: an island, upper left coast, USA
Posts: 73,167
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Quote:
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Everyone you meet knows something you don't. - - - and a whole bunch of crap that is wrong. Disclaimer: the above was 2¢ worth. More information is available as my professional opinion, which is provided for an exorbitant fee. 
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06-10-2009, 11:57 AM
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Registered
Join Date: Aug 2000
Location: Palm Beach, Florida, USA
Posts: 7,713
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Quote:
Yep. Big day at the MRM house. We couldn't use the mortgage tax deduction anyway, so any interest we save is like getting a tax free return on investment. On a cash flow basis it makes financial sense for us, and considering that I own my own firm, we really wanted the security. It feels good. Yes, I agree that we're likely to see double digit interest rates in a few years. I'm planning to use the money we save to buy 30 year treasury bonds when they hit about 10%, which I suspect is inevitable. I remember through about 1990 when the 30 year bond rate was about 9%. There have been many days since then that I wished I had a few of those babies in my retirement account.
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MRM 1994 Carrera Last edited by MRM; 06-10-2009 at 12:09 PM.. |
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06-10-2009, 12:05 PM
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abit off center
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Welcome to the club!
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______________________ Craig G2Performance Twinplug, head work, case savers, rockers arms, etc. |
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06-10-2009, 12:11 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Since September OCtober there has been a flight to safety with US Treasurys being the investment of choich. As stated on CNBC today, "For the past decade Bonds have out performed the stockmarket, which is not a historical norm. This trend will be reversed in the next couple of years."
So Bonds are the HOT investment of the moment. However with the MASSIVE Deficits, printing of money and issuing continous streams of Paper (Bonds) to float the US debt (Obamanomics)..., sooner or later INFLATION is going t rear its ugly head. At that time ANY investment that is tied to USD denominated assets is going t suffer...Thus CD's and Bonds are going to be hit hard. A mortgage of 200K is going to look like small potatoes. You will see your principle decline as the value of those Bonds will decline to match the going interest rate (locking U in). With an inflation rate above 5% you are losing purchasing power on those dollars. As of late the USD has been falling in value which has caused the rise of oil and commodities and INTEREST TATES have been ratcheting up as well. Notice the price of Gold... The US biggest buyer of Treasurys has been demuring as of late as well. They are simply afraid of US deficit spending and the attending debasment of the USD and credit worthiness of the USA. Further take a look at the Budget situation in CA and the possibility of its eclarting BK..which will WIPE OUT bond holders. Also their has been the unheard of beofre speculation that the US might default on its interest payments on US Treasurys...again a wipe out of Bond holders....take a look at Chryslers Bond Holders and Obamas affection for them... Simply one does not buy bonds in a low interest rate envirnoment especially an artificially created one. One buys bonds when interest rates are high. My Dads cousin bought 300K of 30 year Treasurys with an interest rate of 16%....match that investment for safety and return for the last 30 years. Me thinks you have put your trust in Obamanomics...
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Copyright "Some Observer" |
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06-10-2009, 12:20 PM
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Get off my lawn!
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We will join that club in just 2.5 years.
Right now my credit union pays 4% on my checking account.
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Glen 49 Year member of the Porsche Club of America 1985 911 Carrera; 2017 Macan 1986 El Camino with Fuel Injected 350 Crate Engine My Motto: I will never be too old to have a happy childhood! |
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06-10-2009, 12:22 PM
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Senior Member
Join Date: Jun 2000
Location: N. Phoenix AZ USA
Posts: 28,977
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Put a pretty good amount of my retirement into solid 10% tax free bonds. That was 15 years ago and it ran for around 10 years. Last 5 years has been 7% tax free and solid as they come.
Think I will sit on it for a while...
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2021 Subaru Legacy, 2002 Dodge Ram 2500 Cummins (the workhorse), 1992 Jaguar XJ S-3 V-12 VDP (one of only 100 examples made), 1969 Jaguar XJ (been in the family since new), 1985 911 Targa backdated to 1973 RS specs with a 3.6 shoehorned in the back, 1959 Austin Healey Sprite (former SCCA H-Prod), 1995 BMW R1100RSL, 1971 & '72 BMW R75/5 "Toaster," Ural Tourist w/sidecar, 1949 Aeronca Sedan / QB |
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06-10-2009, 12:38 PM
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Registered
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Quote:
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Jim 76 911s 3.6l Track Car 05 Ferrari F-430 "If its worth doing...it's worth doing to excess" |
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06-10-2009, 02:58 PM
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Moderator
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IF I were to get fired, then... ... I can loose my Ford truck and my wifes VW (which we are diligently paying off) ....And they can take my water and electricity. But as long as I come up with the ~ $10,000 in property taxes, they can't take the dirt from under my feet!!!  -Z-man. PS: Oh, and the Porsche is paid for too!
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2010 Cayman S - 12-2020 - 2014 MINI Cooper S Coupe - 05-17 - 05-21 1989 944S2 - 06-01 - 01-14 Carpe Viam. <>< |
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06-10-2009, 03:11 PM
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Registered
Join Date: Nov 2005
Location: CA
Posts: 7,289
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MRM,
congratulations. Now y ou can feel releasaed right?
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Fat butt 911, 1987 |
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06-10-2009, 03:30 PM
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Detached Member
Join Date: May 2003
Location: southern California
Posts: 26,964
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8 years on my 15. Switched from a 30 year to a 15. I'll knock ten or more years off. Congratulations.
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Hugh |
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06-10-2009, 03:35 PM
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Slackerous Maximus
Join Date: Apr 2005
Location: Columbus, OH
Posts: 18,240
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So was our recent cash out refi @5% a good or a bad move? 100% of the $ is going into the house.
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06-10-2009, 03:38 PM
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1988 Porsche 911 Turbo Cab
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