cocobird
Level 2 Member
Agree.
Emergency Savings Fund
- Thread starter Ryan-o
- Start date
El Ingeniero
Level 2 Member
Seriously? I'd be shocked if you couldn't get 2% interest on say 80% of that, and no 5-millionaire is not so well off that to look at a $10+K loss to inflation on that cash with equanimity.
loves2fly
Gold Member
has anyone read this article:
http://beforeitsnews(dot)com/banksters/2014/11/the-money-in-your-bank-account-was-stolen-this-morning-2435038.html
*I broke the link since I'm not sure if it's safe to have a clickable link from here direct to the site. Replace (dot) with . and paste to address bar.
are ya'll inclined to keep more money in the bank or you'll just brush off such articles?
http://beforeitsnews(dot)com/banksters/2014/11/the-money-in-your-bank-account-was-stolen-this-morning-2435038.html
*I broke the link since I'm not sure if it's safe to have a clickable link from here direct to the site. Replace (dot) with . and paste to address bar.
are ya'll inclined to keep more money in the bank or you'll just brush off such articles?
cocobird
Level 2 Member
Since I didn't have a link to the original study I'd read, I decided to see if there were any recent articles/studies on the subject of money held by millionaires and found one.
http://business.financialpost(dot)com/2014/06/11/the-worlds-richest-people-are-sitting-on-gigantic-piles-of-cash-that-arent-earning-them-anything/
Replace the (dot) with . and paste to address bar
It finds that cash positions are rising. I found it to be an interesting read.
Sure they could. It all depends on their expenses of course, but the other 4mil should be able to generate an easy 3-4% inflation adjusted return, which when compounded would cover a decent lifestyle.
Inflation is important, I am not trying to devalue it, but cash and the opportunities it presents are also very important.
El Ingeniero
Level 2 Member
Given the site, I'd brush off that article in particular.
El Ingeniero
Level 2 Member
What opportunities in particular would you forgo by having $800K of that $1M in a TIPS ETF?
If you look at 5 year TIPS ETF you will see two very large declines, one around the time of the financial crisis, showing correlation risk that cash avoids, and one more recently. In terms of an opportunity, if you were holding $1M of cash in the fall of 2008 you would have the ability to purchase stocks at bargain prices, without taking a hit on your bankroll. That is one particular opportunity.
Personally I would not advocate holding 20% cash in checking, unless there was a substantial purchase in the near future. Instead I would suggest building a larger bracket of cash and cash equivalents, laddering CDs etc and garnering around 1% or so in interest.
El Ingeniero
Level 2 Member
Hmm. If I had a $25K emergency fund like I do now, and I had bought my employers stock at $6, back in the day, I would be sitting on a 7-bagger.
Free-quent Flyer
Blogger
No, I've been depositing $500 per month for ages now. Pushing from Fidelity Cash Management account.
Even with the test deposits verified, the account came back denied for linking.
DebentureBoy
Level 2 Member
I had been doing $500+ per month to Mango, dropped it to $50+ recently & having no problems.
Maybe you tried to link it with a negative balance? (recall that you start with a negative $5)
It won't let the bank take out the test deposits, which is considered failure typically.
That's why, I have a -$3 balance.
Load GDMP or push from a non-verifying source (e.g., Santander)
recklessmax
Level 2 Member
Just opened a mango account and linked with chase but im not sure if chase transfer would count as direct deposit for mango ? If not does Serve ach push count as a direct deposit for mango ? ALso with serve you can link only 1 bank account. Anyways around this if u want to ach push monthly into multiple prepaid card account without deleting them ?
Chase should work as long as you get the balance positive before you attempt to link.
Hanaleiradio
Level 2 Member
+1
recklessmax
Level 2 Member
Thanks for swift responses . However Not sure what you mean by getting the balance positive before you link. Mine was already linked after 4-5 business days without any trial deposit coming in and out of the prepaid account and today i setup the 2 xtransfer for 2025$ each
Usually a bank will verify your routing#/account# by depositing some cents and taking them back. If your balance is negative $5, it will fail when trying to reclaim these cents, so it won't link. If you do real DD or your bank doesn't care, you're good.
RRD
Level 2 Member
Yeah, asking about Mango. I have also read reports of these transfers being counted as DD but wanted to know what it was coded as on the Mango a/c. I guess I can wait a month to see if it has worked.
Julian Brennan
Level 2 Member
I only opened my Mango a month back, still waiting on a first statement to post. I did DD through employer (second DD should hit on the 20th, satisfying the 2 DD requirement), and transferred in the rest via Cap360. My hope was for Cap360 transfers to satisfy the ongoing deposit requirement.
For that initial DD requirement for any checking account, I've never tempted fate by not actually changing my DD, so I changed it for Mango as well.
But for ongoing deposit requirement, I don't think it's a "direct deposit" requirement, so in theory any bank ACH push should work, right? Not 100% sure of this, but pretty sure.
Also, according to someone in this thread (https://saverocity.com/forum/threads/6-apr-for-a-saving-mango-account.77404/), Cap360 may be cracking down on transfers that way.
EDIT: also sorry on late responses, I am less and less checking forums due to work.
RRD
Level 2 Member
Update: Capone360 ACH counted as a direct deposit.
Julian Brennan
Level 2 Member
You want to open a 529 plan or a savings account?
deemkaa
Level 2 Member
I'm referring to the savings account.
*Qualified Higher Education Expenses include tuition, all mandatory fees, the costs of required textbooks, supplies and equipment, and certain room and board costs for students who are enrolled at least half time at any accredited school eligible to receive federal financial aid. Non-qualified withdrawals are subject to a federal tax penalty of 10% of earnings and the earnings are taxable as ordinary income.
25k*2.25%=562.5 - 10%(562.5)= 506.25 - income tax
*Qualified Higher Education Expenses include tuition, all mandatory fees, the costs of required textbooks, supplies and equipment, and certain room and board costs for students who are enrolled at least half time at any accredited school eligible to receive federal financial aid. Non-qualified withdrawals are subject to a federal tax penalty of 10% of earnings and the earnings are taxable as ordinary income.
25k*2.25%=562.5 - 10%(562.5)= 506.25 - income tax
Julian Brennan
Level 2 Member
No experience but it sounds like a standard money market account (or rather savings account as it is FDIC insured) with a rather high interest yield.
Pros: no fees, FDIC insured
Con: low yield of 2% does not even cover inflation
You might want to think about a certain asset allocation with bonds and stocks which yield a lot more than that. Our plan is like 70% US stocks and 30% int. stocks. Net principal contributions up to date = $10,500 >> total account value =$12,500. All from dividends and price appreciations. We can afford to sit out a market decline as we're at least 8 years away from needing the money. As time passes we will have to adjust the allocation to safer assets though.
Pros: no fees, FDIC insured
Con: low yield of 2% does not even cover inflation
You might want to think about a certain asset allocation with bonds and stocks which yield a lot more than that. Our plan is like 70% US stocks and 30% int. stocks. Net principal contributions up to date = $10,500 >> total account value =$12,500. All from dividends and price appreciations. We can afford to sit out a market decline as we're at least 8 years away from needing the money. As time passes we will have to adjust the allocation to safer assets though.
Yeah, its a 529 plan... I wouldn't bother chasing it. For the sake of $500 vs $250 you buy the risk that the government may change the penalty.