The generally accepted personal finance heierarch for cash goes like this:

1) Pay off any high-interest accounts (credit cards, etc.)
2) Keep 3-6 months of living expenses on hand.
3) Compare rates of return on expected investment vs. student loan (or morgage, or other lowish interest) debt payoff. That is, if the yield on an expected investmen is 8%, and your loan is at 6%, go with the investment.

Get a Financial Life and Personal Finance for Dummies are both pretty good starter boks.

The general advice is to keep 3-6 months of living expenses in cash or short-term liquid investments (MMA, short term CDs, bond ETFs). Depending on your situation and cost of living that could be > $10k. Beyond that it should be in higher yielding accounts (longer term CDs or bonds) or invested, if the yield is greater than the rate on the loans after accounting for tax effects.

Does anyone really keep 6 months living expenses on hand? I can't even remember the last time I saw that much money at once. Apart from that, what Chopper said.

I may need to read Gud Spillng 4 Dummees.

3 gets it right. I have a fair amount of money in savings but it is almost all in retirement vehicles/college savings funds, which are not accessible. My money in the bank might cover 2 months of expenses or it might not.

I've been reading this site: Get Rich Slowly

I feel like I don't have enough money to make it worthwhile, but I do have enough money that a couple thousand dollars has been sitting in my bank account doing nothing for two years, so I'm going to start a Roth IRA soon.

It's very hard to avoid throwing up my hands and giving up when I see the 80 or so index funds that, say, Vanguard has to offer, with incredibly minimal description of what the difference between them is. Paradox of choice indeed. It's also hard to trust getting involved in a longterm relationship with a giant financial conglomerate, given the asymmetries of information, power, time and everything else. But I guess it's necessary to avoid being victimized by inflation.

Thanks to whoever recommended the David Swensen book, "Unconventional Success". It was written in a very weird way but got its point across. The point was similar but not identical to that of Henry Blodget's "Wall Street Self-Defense Guide", which is about 100 billion times easier to read.

(The long-term thing makes my money thinking kind of strange: "My retirement savings declined in value by $3000 this week! Hm. Oh well." and it doesn't affect my here-and-now frame of mind to anything like the extent that having $3000 in hand and then poof, not having it available seems like it would. I mean last month when me retirement savings was growing by leaps and bounds maybe it did brighten my mood a little but I was sort of anticipating something like this week happening.)

Ned, I read a book by the founder of Vanguard and he argued pretty persuasively that the best thing to do with your money was invest it in Vanguard's 500 Index fund. FWIW. I have a large investment in that fund and it has done me very well over the years notwithstanding the occasional precipitous drop.

Ditto to 1. And having the 3-6 months of living expenses on hand doesn't mean you can't make it earn some money for you. Put it somewhere like ING and you'll be earning 4.5%

The Swensen book really does provide excellent advice (he lays out six slices of the market he thinks individual investors should have exposure to, and recommends annual rebalancing), but it's not as easy as buying a fund pegged to the S&P 500 or the Global 100 and just forgetting about it.

I believe Swensen also recommends Vanguard, due to the odd institutional setup (they're technically a non-profit) leading them to historically have much lower fees.

9: Right. E-Trade has a similarly paying savings account, if you have any independently held stock through them.

10: He recommends both Vanguard and TIAA-CREF for that reason.

I don't understand why he thinks that a 10-15% exposure to something like real estate is better than a 0% exposure, given the increased likelihood that the untrained investor screws up his/her attempt to invest in real estate. I was going to try to divide things between 3 different index funds and then when I deposit more money, deposit it in the one that's gone down recently.

I do kind of hate all the tax-deferred retirement investments. Not being able to control them freely gives me a paranoid sense that something is going to happen that will make them evaporate, and I won't be able to avoid it. On the other hand, it seems insane to save or invest money in anything that isn't a tax-deferred retirement whatever up to the maximum I'm allowed to, and what with paying off debt I'm not saving more that what I can put in my 401k and similar (other than around three months, maybe more if we got really frugal, of living expenses in a money market account.)

I really don't enjoy thinking about personal finance.

This is helpful advice. I have 8 months' expenses in a money market account, but I should probably move half of that to something like what Becks recommends. At this point I'm about ready to take the monthly amount I'd been putting in the cash backup fund into investments, and I like the snarkout idea for ease of use.

Will Rogers had the best advice:

"Take your money, put it in some good stocks, then when they go up, sell 'em. If they don't go up, don't buy 'em".

12 - I think it's a stand-in for the sort of investing that he does for Yale's endowment (direct investments in timberland and real estate development), because as real assets they provide a hedge against inflation. IIRC, he recommends buying shares in REITs rather than direct investment.

Willy Voet and Jake had great points on this in the other thread. The two most important factors to consider are:
1) What's the interest rate on your loans?
2) How long are you comfortable taking to pay them off?
3) If it's a bad time for your investments, could you pay off your loans out of your salary alone (i.e. how much of a safety cushion do you have)?

If the interest rate is high enough, it's not worth trying to beat the loan rate with your investments, unless you're willing to take on the risk of coming up short. At the moment, the yield curve is flat, which means that you might as well keep your cash in a money market fund as invest in any bonds, since the interest earned will be about the same. This also means that any loan interest rate over about 5% cannot be completely covered by a bond that you buy (this is the safest way of investing with loaned money, and just a low-tech, safer version of a common hedge fund and investment bank trade called the "carry trade").

Unfortunately, the stock market is pretty normally valued at the moment, so it really could go either way in terms of which direction it will move in the near future. The big problem is that stocks rarely move the "normal" amount of 8-10% a year. If you look at historical price movements, the market usually moves either 15%+, which is great if you're paying of a 6% loan, or anywhere from 3-5% gain to a 20% loss, which would be terrible if you couldn't pay off the loans from your current income.

I'd bet that you'll be best off paying off the student loans ASAP, but you'll be able to figure out that answer from the answers to the three questions above.

Also, if anyone wants to talk investments or the best index funds to look at, I could probably totally help you out (once I get to work in a half-hour or so).

17: Question 3 was not originally there, which makes my 2nd sentence less baldly ridiculous.

I was totally convinced of the value of the Roth-style investments by an Investment Advisor I was talking to. The long-term advantages are fairly stunning.

The long-term advantages are fairly stunning.

Very true. Even though it hurts like hell to put 4k a year into my Roth IRA right now, the advantage I get from starting even a few years earlier than I otherwise would have is huge.

Index funds. Period.

9 Along the same lines, look at some of the local banks in your area (ie., not the big conglomerates but the little guys). I found an interest bearing checking account at a community bank that pays 4+% interest. Nothing glamorous next to a get-rich-quick super stock or anything, but loads better than the 0.01% give or take the big national bank gave me. Downside is I get stuck paying ATM fees when I draw from that account because they have all of 2 branches on earth where I could draw from an ATM for free; upside is that the interest *always* exceeds those fees anyway.

Slightly off-topic, but I have had a lot of people ask me for money advice. It's like asking your priest for marriage advice.

14 - The thing I linked to is a money-market account. You can get it out at any time. I've got all of my emergency expenses in there. Their money market accounts have such better rates than the ones offered by traditional banks.

They also have a new interest-earning checking account that's offering something like 3.8%. I'm really tempted but I'm so locked into my current account, what with direct deposit and auto-bill pay.

Wow, I never knew there were interest-bearing checking accounts. My savings account is practically non-interest-bearing.

I recommend Jane Bryant Quinn's Making the Most of Your Money. Intelligent and very approachable. Beyond addressing retirement savings and paying off loans, it also has chapters covering all of those "Oh shit, I'm an adult now" situations like life insurance, college savings etc.

I'd like to counter-recommend not ever drawing down a Roth IRA before you retire if you can at all help it. That's the sort of thing that can screw up your retirement savings at a time when you're least able to recover. Much, much better to have all your money having money sex and making more money.

24: Another idea is to keep the current account for direct deposit and auto-bill pay, and transfer what you've saved at the end of each month to the new account. You get the advantage of not messing with the already automated stuff combined with a little extra psychological incentive to save at the fabulous rate of the new account.

"The Only Investment Guide You'll Ever Need" by Andrew Tobias (currently treasurer of the DNC) is a reasonable introduction to personal finance.

26b sounds very rational and all, but framing it that way would just make me resent my money for having a better time than me and I'd be compelled to sabotage all that hot money sex. I'd wind up destituting myself just to spite that smug, smug pile of money.

to have all your money having money sex and making more money

I laughed out loud at this.

19, 20: For those who actually make it to the end with good savings, the Roth accounts are also the perfect back-ups. Unlike normal IRAs, you don't have to pull money out of them every year after age 70 (basically, the IRS forces you to withdraw enough money to exhaust the IRA before you statistically should die), so you can keep them sitting around gathering tax-free gains and interest for years while pulling on your other retirement savings. Then, when you really need the Roth savings, you pull out exactly as much money as you want, because there are no taxes! Yippee!

It's the closest thing you can get to a reward for not being in the top tax bracket.

19: "Roth-style" investment are inhernetly superior to traditional IRAs... which is better depends entirely on whether your current tax rates are higher or lower than your expected tax rates in retirement (which depends on both current and expected future income and current and expected future tax rates). For many (most?) people, the traditional IRA is a better choice.

29: Then imagine they're little anthropomorphic dollar bills slaving away at a little treaury mint: inscribing the plates, mixing the inks, buying the special paper, and printing out more of their kind into a heinous world of eternal toil. All in service of you, their cruel overlord.

Also: index funds, period. Unless you're Warren Buffett, which you're not.

All you really need is three or so. A total US stock fund, a total international stock fund, and a total US bond fund. Put them all into your IRA if you can, else, give priority to the bond fund. (This has to do with the higher taxes on bond interest as compared to capital gains on stocks.)

The trillions of weird little index funds that aren't the above three are for people with special requirements (if you have to ask, you don't have special requirements) or those who think they can beat the market by playing games. In which case, I have a hot tip for you.

*aren't* inherently superior! *aren't*

big different

the higher taxes on bond interest as compared to capital gains on stocks.

Okay, that's something that was 100% not addressed by any of the 3.5 investment advice books I've read, each of which contains a chapter on IRAs and a chapter on tax planning. Asymmetrical information indeed.

One last ingredient to financial success: put some money in your IRA every month. The end.

33: But then I'd feel guilty. Maybe I can imagine them as happy little laborers, toiling on my behalf, not because I am cruel but because they love me deeply and only find their fulfillment in knowing they have served me well. Good job, little money!

32: But tax rates are at an all-time low and most of us hope they'll be raised sometime soon to help pay off the deficit and some form of health coverage / better education. If you're at the beginning of your career, it's a pretty safe bet that your retirement income will be taxed at a higher rate than your current income (you'll likely have fewer deductions by then, too).

Most people in the higher brackets who plan on pulling in much less during retirement are certainly better off with a traditional IRA or 401k, but they're likely not even allowed to invest in a Roth IRA anyway.

Disclaimer: I am not a certified anything, and if you take my advice and ghouls eat your eyeballs I will be very sad, but that is all.

Could it be that the 50-year success of index funds will not continue in the next 50 years, as we enter a new age of completely unshared prosperity and domination of the investment world by nonsensical hedge-fund strategies?
In, say, 20 years, will there be any difference at all between a "total US stock fund" and a"total international stock fund"? Given that already companies like Halliburton and Stanley Tools are becoming located in place like Dubai, and these companies have been multinationals for decades. Similarly, won't the NYSE be just another stock exchange soon, instead of the dominant one?

The two paragraphs in 41 are completely unrelated inquiries and should have been designated A) and B).

This seems like the right thread to ask: setting aside her fingernails-on-the-chalkboard television presence, does from Suze Orman give reasonably sound financial advice?

My guess is, especially based on the above, yes, because it's not that complicated: don't go into debt or pay off your debts quickly, choose high-interest/low-tax investment vehicles.

That was easy!

(I second, third, or fourth the advice to go with index funds. It's both lazy and smart.)

41: Hard to argue for the "50-year success of index funds" since the first one was created in 1975.

I have no idea what the rest of 41 is getting at.

In, say, 20 years, will there be any difference at all between a "total US stock fund" and a"total international stock fund"?

If not, all you'll have lost is the administrative annoyance of having two funds instead of one.

44: Obviously I mean the 50-year success of the S&P 500 and other indexes that would have been tracked by today's index funds if they were around at the time.

You'll have gained the annoyance. You'll have lost the lack of annoyance. Etc.

In, say, 20 years, will there be any difference at all between a "total US stock fund" and a"total international stock fund"?

Well, not if the "one world government" thing works out as expected.

If you're young, ignore whatever allocation advice you are given by your broker (you shouldn't even have a broker these days, honestly) and (i) keep a few months cash on hand and (ii) throw the rest in stock index funds. Not too many, either -- three's a good number. If at all possible, max out any tax-advantaged opportunities available to you. Anything adiditonal you can save, all the better. That's it, you're done.

41: The index fund would tank in your scenario, as would the mutuals it was competing against. But the index would charge lower fees.

41 A) No. Index funds track long positions in corporations. They are claims on real assets and real revenue streams from actual production. Those will never disappear, and there's no real way to eviscerate those returns in the long run under current rules. Hedge-fund strategies are... well, they're a whole 'nother dozens of comment threads.

41 B) The revenue streams may start looking more and more similar, but they will never converge totally. After all, it will almost always be marginally better to be located by your customers in terms of serving them better and cheaper transportation. Beyond that, the two will nearly always cover different companies, since index members are typically based on the country in which a company is domiciled (only one country per corporation). Also, the international fund will provide even greater foreign currency exposure, which can be great at times like now and the past few years. Diversification: objectively good if you're talking about index funds.

One more vote for index funds and Ms Quinn; the decision where to put money hinges on when you'll need it. That is, it's not a good idea to put money likely to go for the next car or vacation into the market. Also consider being ruthless with personal expenses that don't bring you real joy. Reread the Dhammapada before going to look at luxury cars or expensive shoes for example.

This is an interesting subject. I'm suffering from a problem that I'm sure will get me no sympathy, which is that I'm decently paid but living cheaply and as a result have a lot of liquid cash sitting around. I've been maxing out a Roth IRA for a while (all Vanguard index funds, basically as described in 34) and keep the rest of my money in an ING account, but that's up to perhaps 18 months' of living expenses. I should probably take 2/3 of that money and invest it somewhere a bit more aggressive, but thinking about how to do that makes me nervous. I consider it my "house money", but my house-buying plans are "someday" and on hold while I watch the market slide, so I don't even have a well-defined time horizon. I also don't really understand the tax mechanics of investing normally - that is, outside of a retirement account. Would it be terribly dumb to take that money and just replicate the investments of my Roth IRA?

to have all your money having money sex and making more money

"I'm compounding! I'm compounding!"

53 brings up another important factor in the IRA/RothIRA consideration: I'm not an expert on this, but I'm almost certain that you can use funds in an IRA towards a down payment on a house (without penalty), but can't do the same with a Roth. Which can make a big difference if you're both looking to save some cash in a tax-advantaged way and hopefully buy a house someday.

Much like the advice for losing weight (consume fewer calories, burn more calories), personal finance advice (get out of debt, pump lots of money in tax-advantaged funds) is simple in theory but sometimes difficult to follow.

The trick is overcoming your natural psychological urges to eat more, laze around, and spend spend spend.

I find a daily moment of meditation on the dreadful prospect of being penniless at age 90 focuses the mind and makes me happy that I'm maxing out my 401K instead of blowing lots of money on fun vacations.

49 -- how old is "young"? I am 37 (so my term is at least 20 years) and I have a moderate percentage (maybe 20%?) of my retirement savings in DODIX -- I have thought that doesn't really make sense for some time now that doesn't really make sense -- it seems like now might be a precipitous moment to transfer that over to VFINX or similar. Am I right to think what my DODIX is doing is ensuring that if the financial markets collapse 1929-stylee, I will still have 20% of my savings instead of approximately nothing?

And to actually answer 53, if you have even vague plans to use the money money within 5 years or so, you're not really being stupid keeping it out of the aggressive end of the market, especially with ING accounts paying so well. You could put it in a bond fund, or, if you don't want to get even that risky, in a CD. (Although as noted upthread long CDs aren't paying much more than money-market funds right now.)

53: No, no it wouldn't. In fact, I'd recommend moving all the money into a Vanguard or Fidelity account (if you've already got your Roth with Vanguard, they'll consolidate the statements). Park a third of it in a money market fund and the rest into the index funds of your choice. With Fidelity, I've been able to set up a link between my bank checking account and Fidelity account that lets me transfer money back and forth with only a couple days delay, so the cash will probably be just as accessible as it is with ING.

Also, I now feel slightly hypocritical in this thread since I do not have a single index investment in my accounts.

I do not have a single index investment in my accounts.

Now wait just a minute, what kind of game are you playing here?

God this thread depresses me. How did I end up at my age with my husband making the money he is and jack shit to show for it?

Best money advice I can think of is have parents who don't live in a hand-to-mouth panic all the time so that you don't learn to buy stuff now! whenever you have cash on hand. Bleah.

What about USAA as a place to start the Roth? Their fees look similar to TIAA-CREF's.

Ok, to agree with Brock a little more, you're making a very reasonable choice if you put less money into stock investments, but I'm still all about consolidating your cash and investments using a money market fund with a company like Vanguard that will let you easily invest it into good funds if your money situation looks less tight.

57: With a 20+ year horizon, I think 20% in a bond fund is way too cautious. Even if markets collapse 1929-style, you have 20 years for it to recover.

IIRC, apart from the years of the Great Depression, there's no 5-year period during which stocks didn't outperform bonds. And there's no 10-year period at all, including the Depression years, in which stocks didn't outperform bonds.

My plan is to start moving money into bond index funds in my late 50s. Assuming I don't get hit by a bus while cycling to work.

57: I hate to be the bearer of bad news, but if there's a 1929-style collapse there will be a helluva lot of bond defaults, too. So much of your 20% could evaporate as well. If you want to keep 20% truly safe you better use the moeny to buy some gold bricks and store them in a box in your closet. All the DODIX account is doing is ensuring that if stocks have a brutal year (or two, or three), your bond income may hold up. Which if you don't need it for current income shouldn't matter to you at all. (Whereas if you were depending on your investment income to eat--like in retirement--this would be an important consideration.)

OK. The two things Unfogged is completely serious about: Harry Potter and personal finance.

Gold will never lose its value. (If you put it under the bed it's good for your virility too. Ogged.)

61 -- Seriously, a second account that you don't touch and eventually learn not to think about helps quite a bit. You toss whatever you've saved in at the end of the month and when you want to buy something, you don't think of that account as cash on hand.

If my chronology is close, Mr. B's been making the big bucks for less than a year. You're still getting through the "Yay! We can afford to buy something fun!" stage. You will be surprised how quickly you can convert that into something to show for the family labors.

65: My daydream is to have enough saved in non-retirement form to buy rental properties, and become an enlightened slumlord. No one's making any more real estate.

Seriously, I can't believe there are people out there earning 4% from a checking account. My savings account is something like 0.3%. That issue was also not addressed at all by any of the 3.5 investment books I've read. Mother of pearl.

Wrt all the asset allocation talk, how do people feel about "target retirement" funds? I have a big chunk of money in a "target 2045" fund. To my understanding, this is a passively managed index fund that changes asset allocation over time (more aggressive now, more conservative in the future) on the assumption that I will need the money in 30 years.

67: I seriously hope you're right, because 40 ain't that far away and Mr. B's looking at it in the rear view mirror.

Um, 40 years.

67: Automatic transfers into a savings account are also very helpful. I spend out of my checking account, but put a chunk of each paycheck into savings before I even look at it. If that were in my checking account, I'd spend it. (Now, this is the kind of 'savings' that gets dipped into for vacations, a piano, that sort of thing. But it still does build up over time.) Figure out what your reasonable spending out of each paycheck is, and move the rest into a savings account automatically.

Seriously, a second account that you don't touch and eventually learn not to think about helps quite a bit. You toss whatever you've saved in at the end of the month and when you want to buy something, you don't think of that account as cash on hand.

That's what I've been doing with my savings account. It would help if it were in an account that increased rather than decreased in value every year, though.

index funds really aren't all that and a big of chips you know, folks.

Don't try to sucker us into your hedge fund, dsquared.

67 -- seriously, this is true. In 2002 I had no savings to speak of, so in the last 5 years I have gone from nothing to being on track toward a comfortable retirement.

73: Yeah, we did that. Really, what we need to do is straighten out our bank account situation--close the one in grad school city that's still getting automatic deposits from my piddling blog things (b/c that was the only way to keep US dollars in the last few years), close the one in Canada, close the one in NY that Mr. B. gets his direct deposit to (b/c it was *his* only US account when he started his job), and get our shit straightened out. Bleah. Moving right along.

Gold will never lose its value.

I beg to differ.

60: I'm a finance guy looking to enter money management once I finish my current degree. I have free access through my current job to what is quite possibly the largest and most accurate database of managed investments in existance. It may be overconfidence, but there is empirical evidence of persistant high returns for some managers and I think I've got a good shot at identifying them.

62: I wouldn't go into USAA. And now that I'm looking at TIAA-CREF's index funds, their fees look bizarrely low for the amount of assets they have under management. They've also pulled some nasty fee tricks in the past (moving investors into new higher-fee share classes after they voted down a fee rise). I know their unreported account holdings are huge and can help subsidize the costs of management, but I doubt they can really consistantly beat Vanguard or Fidelity for costs due to economies of scale. Plus the large mutual fund companies tend to have better record-keeping and back-office services for individual investors.

73: Good point on the automatic idea. My untouchable account grew very nicely for the first several months when I was very enthusiastic and motivated about the idea. That slowed down as I got complacent and got a little seduced by the, "Hey, I'm doing such a good job saving, I can afford this fun little indulgence," thing and found less savings at the end of the month available for transfer. The automatic thing would make the monthly savings seem like just another one of those fixed monthly expenses that you have no choice about.

I wouldn't go into USAA.

Well, that's what my mother wants me to do for some reason. My sister already has.

70: Target funds can be a pretty awesome idea for people who don't know from investing and just want a single place to park their money. The good ones (Vanguard and T. Rowe Price off the top of my head) have reasonable fees and very broad exposure to US and foreign markets. The T. Rowe Price funds tend to be more aggressive, with larger stock allocations and more invested in small- and mid-cap stocks.

Wrt all the asset allocation talk, how do people feel about "target retirement" funds?

They're great. They basically reduce the amount of discipline you need to just 1) PUT MONEY IN FUND. 2) REPEAT. Make laziness pay!

B has a good point about choosing your parents well. I've trained myself to think of moving money into savings as having bought a piece of ... something. Money sex? Hard to describe, but nowadays I'd as soon buy an investment as some other thing.

81: Just doing a quick query, it looks like their three index funds each cost more than the comparable funds for Fidelity or Vanguard, and they offer no international index fund. Their index funds outside the S&P 500 cost a LOT more, like 100-300% more.

I find the treatment of financial planning in Harry Potter to be retrograde at best.

Also, those who are non-single should come to a good working financial arrangements with their partners.

If both of you are good with money, you have nothing to worry about. If only one of you is good with money, that one should be in charge of the finances. If neither of you are good with money, you should go ahead and break up now, because that's what's going to happen eventually.

85: Yeah, Gringott's pays next to nothing in interest on its accounts. Just a few knuts to the galleon.

Harry should move his investments from gold into stock index funds.

85: I disagree entirely. Harry plainly adhered closely to B's advice by selecting parents who left him a vault full of money that he can spend without thinking about it.

We've talked about finances, and one of us is good at it, and the other of us is surely not going to ruin all my hard work by being put in charge of it. I know jackshit about investing, though.

Cala, what you need to do is give me all your money.

86b: so sadly true.

1.3) when comparing interest rates on debt vs. rates of return on investments, be sure to include taxes and fees on investments. If you're in a reasonably high tax bracket, this can make paying off debt more worthwhile.

"86b" s/b "90"

We're not going to invest in your hedge fund either, Bridgeplat.

So is Harry Potter going to get killed by a zombie fungus?

88: One has to wonder where how Harry's parents accumulated all that gold, given that they were presumably pretty young when they were murdered.

I don't get the sense that Lily Evans's muggle family was particularly rich. Was James Potter the sole heir of a wealthy estate? We never hear anything about other members of the Potter clan.

91: I forget, are interest payments on debt tax-deductible for individuals, or is that only the case for mortgages?

Gold's only going to retain its value if we don't suffer hyperinflation. At that point it's probably best to stock up on nails (Weimar, IIRC) or fish-hooks (late KMT China, at least where my grandparents lived).

You don't need to know much, though -- putting away all you can in tax-deferred or Roth IRAs, and what Bridgeplate said about index funds, is pretty much it.

We've got an issue in that I'm much better at the big picture of squirreling away money rather than spending it, while Buck is the one who's capable of keeping track of pieces of paper. So he does the keeping track, and I 'supervise' to make sure that nothing weird is going on. Luckily, he's a patient and longsuffering person who listens well.

US Grant on administrative tasks:

The only place I ever found in my life to put a paper so as to find it again was either a side coat-pocket or the hands of a clerk or secretary more careful than myself.

96: Only mortgages.

94: You're confusing Harry Potter with Mario Bros.

99: And student loans, but only if you make less than a certain amount of money.

96 99

Not true, interest used to carry investments (like margin interest) is deductible against investment income. The rules are complicated so be careful.

99, 101: That kinda sucks, though it means that the tax effects of interest income versus interest payments might be eliminated for the question poser if she earns below the proper threshold for student loans.

76, 93: But will you invest in my hedge fund?

70 - Target retirement funds are a great idea, especially if from a low-fee place like Vanguard, for the "1) PUT MONEY IN FUND. 2) REPEAT. Make laziness pay!" reasons that Standpipe says. The one thing to note is that each company has a different idea of how conservative you should be at each stage of life so definitely check out its investment philosophy -- it should tell you how quickly it plans on moving into bonds vs. stocks. If its philosophy is too aggressive or conservative, you can pick a different target year even if that's not when you're planning to retire. So, if the Target 2040 fund is too conservative, you might want to invest in the Target 2045 fund, which will move more slowly into bonds, even if you're planning on retiring in 2040.

okay, but variation on this question:

how much cash in hand do you keep, in the sense of actual dead presidents, in your house? like, not all liquid assets, but the narrower category of actually folding money?

i probably have $500. worth stashed here and there. not a lot, really, but that's more than i have in my long-term retirement anyhow.

i understand that many people in the bay area upped their ready-reserves after the ATM machines died during one of the earthquakes.

87--

to the list of reasons for finding gringotts and the goblin banking system offensively anti-semitic, should we add "sickels" = shekels?

(thought i believe that the name, 'gringotts', with the double 'tt', is partly modeled on the old strand firm of 'coutts & co.', which was more anglo than hebraic).

9: HSBC and Emigrant are just like ING, but at 5.05% instead of 4.5%. I moved my money to HSBC last year.

Bankrate is a good site for comparing rates on these things.

as well as "ingots" and "greed", of course.

Without having read much of this thread yet, thanks to all for having taken it up. (I posed the original question last night.) I'm at work and have limited time to read carefully right now.

105- I have $300 in my emergency supply cabinet (flashlights, dried food, water, radio) which when supplemented with what I usually have on hand makes about $500.
"ATM machines"
Do you work for the department of redudancy department?

110: Didn't you get the memo? "ATM" now stands for "Automatic Tendering of Money". So they're properly called "ATM machines".

110 - No, no. "i understand that many people in the bay area upped their ready-reserves" ATM. Sounds a bit rude!

110: Many people think that the name of the Department of Redundancy Department is redundant, but really it's not, as the Department of Redundancy Department is the department that works on developing and maintaining departments of redundancy.

Similarly, an automated teller machine machine is a machine that produces automated teller machines.

JAC--Care tto dig deep and reccomend any Ethical/Green Investing fund managers? I'd like to avoid owning arms merchants, tobacco, oil (but green energy OK), pharma (but med tech/biomed OK), healthcare/HMOs, and agribusiness.

A word of caution about bond funds: when interest rates go up, bond funds tend to get whacked (in effect, the value of the principle declines until the bond is effectively paying the new rates on the reduced principle). When inflation takes off, the real value of bonds declines, as they pay off in cheaper dollars. When you consider that interest rates and inflation the last few years have been at or near historic lows, while the Bush administration has been borrow-and-spending like a drunk sailor on Iraq + tax cuts, I get very nervous about what might happen to long-term bond funds if foreign investors ever stop buying our paper.

Of course, the fact that 20-year treasury rates are just a hair over 5% suggests that the market isn't too worried about this possibility at the moment. So maybe a major bond meltdown isn't too likely a possibility. But I've been trying to keep my personal fixed-income investments in fairly short-to-intermediate term stuff the last few years, to limit my exposure to this risk. Just because bonds are historically considered a "safe" investment doesn't mean they are safe *now*.