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Investing $1,000,000

Old 04-27-2007, 05:40 PM
  #61  
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Default Re: Investing $1,000,000

Moneybags,
Again, thanks for the kind words. They are appreciated.

Teampig,
For every Al Parish, there's going to be 100 good advisors that truly are looking out for the best interest of their clients. If I were in cudacats position and I thought all advisors were Al Parish wannabes, I'd probably be doing what his advisors are suggesting, either all bonds or annuities. I'm just not going to dwell on the possibilty that all advisors are out to screw me.
I also agree that sitting down with several potential advisors is a good idea.

cudacat,
I have serious doubts about your 2 advisors if one suggests you put everything into annuities and the other suggests only tax free bonds. You need diversification and as I mentioned above, even some stocks/mutual funds should be part of the mix. The portfolio that fmTuna suggested above is more to my liking than what either of your advisors suggested. A mix of CD's, T-bills, bonds and income producing blue chips is the way to go in my opinion. It's just a matter of fine tuning that mix that you are comfortable with.
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Old 04-27-2007, 09:34 PM
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Default Re: Investing $1,000,000

mhyzhen - 4/27/2007 9:21 PM

hhhmmmmm........how much do you need to have each month to live on ?.....reason i ask, is because ive heard of a plan that is fool proof (lol, dont you guys flame me over this, im just repeating what i heard).......if you 1mil put it in 4 seperate interest bearing savings accounts at the same bank....have all 4 accounts transfer monthly into a personal checking/savings account.......should be good for about 5 grand a month....and your initial money is federaly protected, thats why the 4 accounts....just make sure its an fdic institute........i dunno, sounds feasable to me, specially if you only have a couple car notes to contend with.......of course, im not educated in those aspects, so any advice on this from the "money guys" would be appreciated from myself as well
$5000 a month? That works out to 6% return. Now, please tell us where we can find a bank that offers 6% on savings accounts.
What you are suggesting is about as safe an investment that you can get, but 6% return is a pipe dream.
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Old 05-01-2007, 05:32 PM
  #63  
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I invest in tax free triple a rated, insured municipal bonds, very conservative, safe and depending on the state 4 to 4 1/2 % interest. Oh yea did I say tax free so depending on your tax bracket that could be upwards of 7 %. Good luck
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Old 05-01-2007, 07:22 PM
  #64  
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Default Re: Investing $1,000,000

Are there bonds available that are both Fed and State tax free?
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Old 05-02-2007, 08:12 AM
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I don't believe you can get tax free Federal bonds. You must get your states tax free bonds, bonds issued by other states are not tax free to you except bonds issued in Puerto Rico If your accountant advises that this is a good route for your situation just find a large reputable company that specializes in municipal bonds.
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Old 05-02-2007, 11:26 AM
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Default Re: Investing $1,000,000

seabass man - 5/2/2007 8:12 AM

I don't believe you can get tax free Federal bonds. You must get your states tax free bonds, bonds issued by other states are not tax free to you except bonds issued in Puerto Rico If your accountant advises that this is a good route for your situation just find a large reputable company that specializes in municipal bonds.
Just to clarify, bonds issued by municipalities, states and some agencies are exempt from Federal income tax. Some, which are called Private Activity Bonds are still subject to the AMT. From a State income tax perspective, your state will tax the income from municipal bonds unless they are issued by the state in which you live. I believe there are some states that do not tax the income earned on municipal bonds issued by neighboring states but I am not sure which ones. For those living in New York City, there are bonds issued by the city which are free from Federal, State and City income taxes.

Currently you have to go out around 20 years in maturity to get in the mid 4% range on AAA rated munis. If rates go up in the future, these bonds will lose value. You could always hold them until maturity, but if rates go up your real after inflation return may not be that great. Anyone going this route should learn about laddering a bond portfolio to reduce risk.
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Old 05-02-2007, 11:32 AM
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Default Re: Investing $1,000,000

I do own a fee based financial planning firm which is an RIA and the muni bond info is spot on. I just checked NC inventory and there is 50MM of AAA paper at 4.25% out there right now, which could be over 7% in a taxable equivelant. Obviously these don't help you in AR but should give you an idea of the market.

I do not do business in your state and am not in any way soliciting, but your phrase of "I can't afford to lose any of it" would lean me toward laddered munis if I were advising you.

Good luck,
Tom.
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Old 05-02-2007, 05:56 PM
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Boatless Again you are 100% correct I had a brain fart. Your state municipal bonds are State and fed tax exempt . Just dont buy munis that are subject to AMT tax.
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Old 05-03-2007, 02:35 PM
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Correct seabass....

There is a constitutional reciprocal agreement ie we won't tax yours if you don't tax ours,last attempted to have been overturned by the knucklehead known as Bob Packwood in 1986. That went over like a lead zeppelin.....
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Old 05-04-2007, 07:21 AM
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I spoke with a bank just the other day about just such a scenario. When they heard my wife was coming into some money like this they called ME. I told them that I knew they would be loaning it out at very high rates to people with lousy credit, rates like 20% and if I couldn't get half that and perfectly safe, they weren't getting the money. The manager assured me 8.5 to 9 points was no problem.
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Old 05-04-2007, 07:40 AM
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capndick - 5/4/2007 7:21 AM

I spoke with a bank just the other day about just such a scenario. When they heard my wife was coming into some money like this they called ME. I told them that I knew they would be loaning it out at very high rates to people with lousy credit, rates like 20% and if I couldn't get half that and perfectly safe, they weren't getting the money. The manager assured me 8.5 to 9 points was no problem.
capndick - Be very careful. What guarantees are there? I am sure it is not an FDIC insured account. I have no idea what type of product they are talking about, but please approach it as a skeptic. Being an advisor, I know you can not get an above market yield without taking additional risk. You have to decide if the additional risk is worth taking. The key is understanding exactly what the additional risk is. This goes back to my earlier post on this thread about getting yourself educated.Can the value of the investment go down? What is it's historical performance? Is the only security these risky borrowers? What if they default? What if you want to get out?

Please do not take my post as marketing, as it is only meant to help educate you.
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Old 05-04-2007, 10:17 AM
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8.5-9 "no problem"? It is because of guys like that that the investment community and associated LICENSED professionals get bad names.

Like boatless said, you simply cannot get that w/out risk. Do you watch the news? Ever heard the phrase "subprime?" Ever heard that associated with the word "default?"

There are few things in our world that are guaranteed, but municipal bonds are usually one of them. The way they are set up, bondholders usually must be paid before things like police and fire departments.

FDIC is 500K, but you won't get that coverage if your monies are in an instrument. he is telling you he will generate above prime returns for you. Other than the 30 year, which mtgs are based on, don't you think the top tier companies i.e. credit risk have their LOANS based at prime?

It is all about risk my friend and if you cannot afford any risk you should truly familiarize yourself with what money is worth. If I could give you one piece of advice, it would be "IF IT SOUNDS TOO GOOD TO BE TRUE, RUN DON'T WALK AWAY!"
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Old 05-04-2007, 10:22 AM
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capndick - 5/4/2007 7:21 AM

I spoke with a bank just the other day about just such a scenario. When they heard my wife was coming into some money like this they called ME. I told them that I knew they would be loaning it out at very high rates to people with lousy credit, rates like 20% and if I couldn't get half that and perfectly safe, they weren't getting the money. The manager assured me 8.5 to 9 points was no problem.
And I will sell you this great bridge in NYC...Really it is all on the up and up.
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Old 05-05-2007, 09:49 AM
  #74  
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I would use

www.guildinvestment.com
http://guildinvestment.com/formhome....Email=&refURL=

tell him a comet sent you


but I don't know if he will take an account that small
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Old 05-09-2007, 12:30 PM
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i'd invest in real estate. it's a growing market and u astually own something that u can actually put your hands on. thats what i would do...
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