Best place to put a fairly large sum of money..... (opinion, investments)

[mathjak107]

well as long as you understand whatever you leave your heirs will be worth about 1/2 in purchasing power every 20 years or so depending on inflation .

losing money is not only losing the value , it is losing purchasing power too .

the last 45 years cd's have had negative real returns about 1/3 of the time and 40% of the time when inflation and taxes are included

[Luvvarkansas]

Originally Posted by TwoByFour

Uh oh, investing with a conscience.

I admire your ethics but it is hard to do anything today without touching something questionable.

I understand that, I really do, but Philip Morris is strictly about tobacco, right? Not sure I could do it.

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[Luvvarkansas]

I guess, with everyone saying that investing is not good right now anyway, my goal would be to just keep up with inflation? The hope is (once we actually get the money) that we won't have to touch the money for probably 5-10 more years. We'll eventually be using it to supplement retirement income at the end of our lives. Not worried about leaving any for the kiddies, they can take care of themselves like we have.

I thought of the CD laddering strategy (this I have actually already heard of...), but would it actually end up making me lose money due to inflation?

I looked at Horace Mann and see it is a fee-based service....I would like to avoid high fees, if possible. I've heard of "no-load" mutual funds....is the Vanguard Wellesley like that?

I do not really want to state exactly how much money it is (just for privacy's sake, I'm that way), but it is a little under $100,000. Someone asked me if it was more than $250,000 or less....seems we all have different ideas of what a "fairly large sum of money" is.

Thank you all for being kind and patient with my ignorance. TTTT, I'm not sure investing is for me....the mattress idea is looking good. LOL[CENTER]Save[/CENTER]

[Luvvarkansas]

Also, I would want it in a place where we could draw out part of it in a lump sum all at once, say, if we wanted to pay cash for a car. Maybe just a money-market account? But would that make us lose money because of inflation?

[mathjak107]

unless you have definite time frames for the money you can only use cash instruments or face the risks . you never want to use long term investments for short term money .

[Vision67]

Originally Posted by Luvvarkansas

Ok, can someone explain to me (veeeery slooooowly, lol) what the difference is in "APY" (which I know stands for annual percentage yield) and "Rate". One is always more than the other. Which one will my money actually make in the end?

"Rate'' is just that, interest rate. It can be expressed as a rate for a specific time period, e.g. per day.

Lets say it is 5% divided by 365 days or .000136986 per day. Multiply that times 365 and you get 0.05 which is 5%

Now, assume it compounds daily. Add 1 and take it to the 365 power. You get 1.051267496

So the APY, or annual percentage yield is 5.126%

[elliedeee]

Originally Posted by Luvvarkansas

Also, I would want it in a place where we could draw out part of it in a lump sum all at once, say, if we wanted to pay cash for a car. Maybe just a money-market account? But would that make us lose money because of inflation?

That's why our financial adviser suggested Vanguard Wellesley because they'll issue you blank checks so you can withdraw money in case you need it for purchases such as new cars, or trips to Tahiti. I can't remember if it was you or someone else who was against Vanguard.. sorry.. the brain goes south sometimes, but at any rate I'm sure there are other companies who offer the same thing.

[elliedeee]

Originally Posted by Vision67

"Rate'' is just that, interest rate. It can be expressed as a rate for a specific time period, e.g. per day.

Lets say it is 5% divided by 365 days or .000136986 per day. Multiply that times 365 and you get 0.05 which is 5%

Now, assume it compounds daily. Add 1 and take it to the 365 power. You get 1.051267496

So the APY, or annual percentage yield is 5.126%

even I understood your explanation !

and that's saying a lot.

[silibran]

I received a small sum when my mom died. I had DH invest it in an index fund. He asked me the same question others have asked. I gave him timeline of 10 years. You can cash out an investment whenever you want to. Of course you take chances with investments, but the overall trend in the market is up.

[bufflove]

Originally Posted by TwoByFour

But you have to have the stomach for that as stocks go up and down, but they always recover. You never "lose" money despite what people say.

This is unimaginably dumb and dangerous advice to give someone. What are you, typing on a Blackberry while heading out to a Blockbuster, TwoByFour?