Re: [MLUG - DISCUSSION] Money Markets?

[Stephen Montgomery-Smith <EMAIL:PROTECTED>]

Jennifer Dozar wrote:
> On Tue, May 23, 2006 at 10:16:53AM -0500, Stephen Montgomery-Smith wrote:
>
> > I think that David is right - money market mutual funds offer similar if 
> > not higher yields, and you can withdraw the money whenever you like, and 
> > with only superficially higher risks.
> >
> >
> > > or, better yet, paying off high interest credit card
> > > balances.
> >
> > ... but in today's economy, paying off high interest rates is by far the 
> > best investment.
>
>
> Don't get me wrong! i'm definitly paying off some bills :)  i just
> didn't want it ALL to go to bills considering i'm still needing to buy a
> new car still... Trying to get that part wrapped up. I got the title
> yesterday, but the Lien was still on the title... but we have a letter
> from the bank saying it is paid off.

I do understand the psychological advantage of what you intend to do.

When I was young I was approached by many people telling me I should 
invest in their particular scheme - typically this was universal life 
insurance.  There is no doubt that there are much better investments, 
but the fact of the matter is, I didn't invest in anything at that time. 
 Now I wonder if maybe I should have invested in those schemes, because 
at least I would have something.

My only real investment is some money I put into the S&P index fund.  I 
did it as part of the k103 scheme at work so the tax on the gains is 
defered until I retire, and so if I withdraw it now I face tax 
penalties.  But my current debts roughly equal the amount of money in 
that fund.  So I also wonder if I was wrong to have put that money into 
it.  Certainly, dollar for dollar, I was better off to have paid off my 
current debts.  But if I did pay off my debts, maybe it would just cause 
me to spend more freely now, and so in the long run I would be worse off.

Anyway, what the bank is offering you isn't horrible, and at worst your 
money is tied up for a few years.  In some ways the best investment 
advice might be to "just do it."  Hopefully in the years to come, you 
will have much larger amounts of money to invest, and the experience you 
gained trying out these inverstments will help you to try other things 
in the future.

So I say, just go out and do something.  Don't feel disappointed if you 
didn't get the very best deal, because as my father used to say "if a 
job is worth doing, its worth doing badly."

Stephen

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