68K in no interest savings accounts- need help

[Snydley]

Tier 1 is the credit card (cc) if I can put the expense on the rewards card.

Great job on the mortgage pay down. One word of caution is figure out how much of your net worth is in the house.

Rough math estimate. 500k Home would be 50% if your net worth is 1 million. That’s a lot of money to be tied up in your home. But no mortgage payment is nice too esp since you are getting closer to retirement.

Keep us updated.

Ok so for tier 1 you mean using cc to max out rewards potential then pay off each month. I get it.

We are behind on retirement- we have 378K total right now, so half of our current net worth is in our house. Is that bad? I am 16 miles from Boston so I feel like our home value is somewhat stable.

Our retirement goal is 2 million by the time I am 62 (19 years)- DH and I + our employers contributed 52k to our retirement accounts in 2017 and that number will increase 60K for 2018 (we can now both give 18K).

[Jluke]

I forgot you were in a high cost of living area. So different rules/expectations.

If your goal is 2 million for retirement funds then your house will be a smaller fraction of net worth than it is today (excluding Home value going up).

[kork13]

kork13- thank for the ibonds info. I think that sounds like a good plan for us, since you can use the $ after 1 year. Is it true that the rate is now 2.58% (higher than a CD, or does it work differently?)

I-Bond rates adjust twice a year, in May & November. The current rate is in fact 2.58%, which is nice. It isn't always higher than CD rates, but I've found that it often is, with minor exceptions of periods with low (negative to <1-2%) inflation. In general terms, it seems that I-bond rates float around what 5-year market CDs are earning, which I guess kinda makes sense when you consider how they're structured.

[ndwilli6]

CD accounts/Online Savings Accounts

Hi-
We need to start making some money on this money- I would say 45K of the 68K is EF. I-bonds, Ally 12 month CD vs savings, what are y'all doing that you like best?

thanks

I have two Ally CD accounts. I also have two Sallie Mae CD accounts. I'll be pulling money out of my Wells Fargo and into an online savings account because the interest rate is incredible on some online savings account. I'd look into those too as safe ways to earn some interest per year. I'd love to know some ways you all are growing your money as well.

[ndwilli6]

I'm a huge fan of keeping cold, hard cash in an account easily accessible.

I have a business checking account with $5k and will have rental payments transferred into the account monthly. I have a business savings and I plan on moving around $10k more to that account (6-month reserves for all properties). I already have $5k in the account.

Regarding checking accounts I'll focus on $8k in that account (since no interest is happening, still high but makes me feel secure). I have 3 savings accounts currently. The rest of funds will be in savings. So, around $45k in savings.

I have 4 CD accounts. I don't touch those accounts. I think I'll do 1 more CD account and more than likely a bond. So, essentially I won't touch around $25k.

I actually want around $170k saved by end of year (all cash). Majority will be held in online savings and business savings account.

[LivingAlmostLarge]

How do you generate $170k in cash from $80k in cash from making $45k/year? I'm still puzzled how to generate so much money from none.

[ndwilli6]

I'm selling a few properties I own this year and hope to pocket around $50k.

[LivingAlmostLarge]

do you not have any living expenses or pay any taxes on any of this? If you buy and sell property you pay no taxes on capital gains? Or cash outs? No fees either on all these mortgages?

[ndwilli6]

do you not have any living expenses or pay any taxes on any of this? If you buy and sell property you pay no taxes on capital gains? Or cash outs? No fees either on all these mortgages?

You don't pay any taxes on cash outs.

You do pay taxes on capital gains unless you're using the funds to purchase another home.

You can depreciate the value of the home (age), any maintenance, interest among other things by being a landlord...

[msomnipotent]

To the OP, I would keep one month's expenses at the local bank for true emergencies, and then divide the rest up into online savings accounts that are offering bonuses, if any are available to you. I recently received a $200 bonus from Capital One and I'm thinking of opening another two, depending on bonuses and rates. The only problem is that I was told by Capital One that you can't transfer money from one savings account to another online for some reason, so I had to take extra time to transfer from HSBC to my checking and then to Cap 1. It took almost 2 weeks. Cap 1 seems to be pretty slow. I usually get money from HSBC in about 3 business days. I budget a week for Cap 1.

Once the bonuses are used up, I would then hunt for better rates with CD's or MM accounts if you can't find anything decent for savings.

[Gailete]

Are you talking about capital One 360? I transfer money around when needed, at least from savings into investments. I've been using that account for years and have 4-5 different savings accounts and I don't recall not being able to transfer money from them when I wanted to. I do know that you can pay bills directly from a savings account to any company that accepts direct deposits. Such as when I do the taxes for my pattern business, and can take the money straight out of the account where I save estimated tax money. No check to write. Which reminds me I have to do my sales tax in the next week or so.

[msomnipotent]

Are you talking about capital One 360? I transfer money around when needed, at least from savings into investments. I've been using that account for years and have 4-5 different savings accounts and I don't recall not being able to transfer money from them when I wanted to. I do know that you can pay bills directly from a savings account to any company that accepts direct deposits. Such as when I do the taxes for my pattern business, and can take the money straight out of the account where I save estimated tax money. No check to write. Which reminds me I have to do my sales tax in the next week or so.

Yes, it is a 360 account. I tried transferring money from HSBC to Capital One when I first set up the 360 account and it kept rejecting. That's what I was told by Cap1 when I asked. But I'm just noticing that they switched me to a money market account. It specifically said "savings" the last time I logged in. Maybe because I have over $9,000 in it? So maybe I can transfer from HSBC to them now, or maybe it was just a glitch and the CSR made up a story to shut me up.

[Gailete]

Yes, it is a 360 account. I tried transferring money from HSBC to Capital One when I first set up the 360 account and it kept rejecting. That's what I was told by Cap1 when I asked. But I'm just noticing that they switched me to a money market account. It specifically said "savings" the last time I logged in. Maybe because I have over $9,000 in it? So maybe I can transfer from HSBC to them now, or maybe it was just a glitch and the CSR made up a story to shut me up.

I've never had the pleasure of talking to one of their CSRs. I know when my husband makes piano money, I transfer the taxable amount to my local checking account and then have CapitalOne scoop it into our 'piano tax' account. Same with the monthly amount for taxes for my pattern account, but it goes into the pattern tax account. When we are flush and /or have money to invest, I send it to my savings account and then transfer it to my Roth IRA that I have there. I'm letting my non-IRA stock account ride now since to move them I would be hit with all sorts of capital gains! The IRA fund it now passing the other up. I'm pretty sure I have moved money between the different savings accounts as well, but can't swear to it.

Yes, I know it sounds like way too many accounts, but we also have one to the rental deposit just to keep it separate. It is my way of keeping track of things visually. If I kept it all in one savings account, every time I looked at the total I would have to remember where all that money is going to have to go over the long run. Works for me

[scfr]

Marcus (formerly GS Bank) is now up to 1.50% on their savings account. Hopefully you've found something you're happy with and are earning more interest.