Money in the bank

[crud3w4re]

Is money in the bank a waste of money? I read that in an article. If so, what are safe investments that aren't a waste?

[youngmarketplace]

Depends if it is making any money. Mine makes 9% in the bank.

[Barrierstoentry]

What would you consider a waste? Inflation eroding your money, opportunity cost? Generally if your outpacing/matching inflation than it's not a "waste" in that regard but might be in regards to opportunity cost. You might also consider that your exposing yourself to less risk by having your money in the bank.

What i consider a waste is when i invest in something i have no understanding of, when i lose money (principal and inflation) and when i expose myelf to excessive amounts of risk. Opportunity cost is also a large factor especially at younger ages due to compounding. You have to weigh these things for yourself and determine what you want to achieve.

Best Regards

J

[crud3w4re]

ok. how do I know what the "inflation" is? That would tell me. I believe I'm making over 5% in the bank. Netbank

[Cameron]

No, the FDIC insured savings and money market accounts are great, just make sure you dont do it through the major banks like Bank of America or Wachovia, they offer less than 1% Apr. Check etrade.com and bankrate.com for the savings/moneymkt listings. Etrade.com offers 5.30%, amazing.

[crud3w4re]

Is it true that multiple bank accounts hurt?

[nordicnomad]

Is it true that multiple bank accounts hurt?

Hurt what?

I have 3 checking accounts with several different banks, a savings account with an online bank, and a brokerage account.

One checking account is strictly business related, I then have a "bills and scheduled payments" account for my personal stuff, and than I have a daily spending account that I only leave as much as I need in.

Having multiple accounts is fine, as long as you can keep track of them and they serve a purpose.

[crud3w4re]

well.. this bank will give me $50 for signing up with them, I thought maybe I'd signup for the $50, then close? just was an idea though. I'd have to review their terms. I've read that it may be bad for your credit, to have a bunch of different bank accounts.

[Bestmiler]

Depends if it is making any money. Mine makes 9% in the bank.

what bank is this? what type of account?
If the interest is below 4% then its not worth investing in.

[YidBiz]

Well, I think, as long as the money is sitting around AND EARNING YOU MORE MONEY, then it's not a waste.

[crud3w4re]

True. I'm planning on switching to a MM account with Netbank

[chanson]

the free $50 most likely means you have to keep it open for a minimum 12 months, and the monthly fee is prob 9.99. Their was a bank here that was giving away free flights to anywhere in north america, but again it had stipulations

[crud3w4re]

oh. I'll check out the terms though. Can't hurt to have multiple bank accounts, as long as the rates are beating inflation, right? How do I calculate what "inflation" is?

And what about credit cards? Does it hurt to have many? I use it to try and build up my credit. few purchases a month, never have to worry about the interest rates!

[dosrotties]

There's a few hedge fund possibilities where you pay 10% for 100,000 million with fees. Can be exspensive money when you tack on the fees and the interest could sink if you can't pay it.
but you don't have an investor controlling you.
Some investors like it because the money is secure at the bank. You have to have great credit and time to put the deal together.

[WanganRunner]

I keep lots of money in the bank, but that's because I need the flexibility of cash to buy my inventory (cars, mostly in private party transactions).

I have a continual use for about $100,000 in cash. Right now, I've got about half that, so I figure I'm only doing about half the business I could be doing (although at the moment, I'm actually more limited by time, but that's temporary).

If I ever got over $100k in cash, I'd find some alternative uses for it.

if I get into reselling exotics, I'll be able to utilize more like half a million bucks in cash, but I'm still evaluating that market to see if the margins make it worthwhile, given that it's so much more money on the line for each car.

The trick is to buy the cars from stressed-out rich guys who need to pay their gambling debts/coke tabs/ex-wives. They can't take a Lamborghini to CarMax and get a quick sale, and the open market for exotics takes forever to sell anything. I plan to fill this need by being the guy who can show up with a $350,000 cashier's check and a flatbed truck to take away your XJ220, '53 Corvette, or for that matter....your Scarab offshore powerboat.