Where do you park your money?

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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

I am wondering if you built up $10,000 or $25,000 or $100,000 in cash to invest, but were not ready to invest, where would you park your money? Would the "location" change based on the dollar amount?

- Money market (FDIC and available quickly)

- Stock market (good return but some risk)

- Bank CD (FDIC but locks term)

- Private money lending (higher risk)

- Other?

I am trying to see where I could get a good return but still keep my money relatively safe and available if I need it. I am interested in what others are doing. Please share as much detail as you can. (No this isn't an offer to give you money to invest so please don't ask.)

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Logan AllecBusiness Member

Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes

I just move around from bank to bank to collect sign-up bonuses.

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Jon B.
Chicago, IL · Member since 2017 · 3 posts · 8 votes
8y
I park money I plan to use in the next couple of years in a savings account with Ally Bank. I am currently earning 1.25% on my funds. No issues with Ally being a completely online bank either.
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Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
8y
I just move around from bank to bank to collect sign-up bonuses.
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Brian Garrett
Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
8y
American Express High Yield Personal Savings pays 1.35% and is a great place to park money.
4 Reply
Alexander FelicePro Member
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
8y
Ally 1.25% had them for years. Zero complaints
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
8y
Generally, I just stick it in any kind of minor interest-bearing account that I have with an institution that I want/may want to hit up for an investment mortgage. I have noticed that I get better response from the bank officials when they see me moving large amounts of money into (or out of ) their institutions. Mostly I do this with local banks, where I have relationships with the bank managers. It has helped me get good terms on at least one cash out refi that I did (at least I believe that to be true!)
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y
I usually keep about $75k in a savings account as my emergency savings, and I keep about $30k in checking as business operating income. If I am saving for a new property purchase, I let my business checking account build up that extra amount til I have it. Any build up I am not saving for, typically goes into the stock market.
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Christian Allen
Investor · Providence, RI · Member since 2016 · 77 posts · 65 votes
8y
Barclays Online Savings account has a current rate of 1.40%. Almost enough to keep up with inflation.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
@Logan Allec I like the sign up bonuses, I am looking at an offer from Discover now for $200 if I keep $25K in there for one month. Probably a good starting place.
@Brian Garrett that Amex 1.35% is pretty good for a savings account. I was looking at Discover at 1.3%, but I also like what @Christian Allen suggested with Barclays for 1.4%. Not getting rich, but better than the current 0.01% I am getting at the big bank.
@JD Martin good tip on relationship building with a local bank.
@Russell Brazil I am with you, keeping some ready cash for operations, but getting better return in the stock market. A little more risk, but I have pretty good market confidence right now.
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Dave Van HornPro Member
Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
8y
@Joe Splitrock
Have you considered insurance contracts? They're a safe bucket, offer a higher yield than most savings accounts, and there's usually liquidity (that's tax free).
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Brian Garrett
Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
8y
@Joe Splitrock Trust me I hear ya I had a decent amount of money parked with BoA for the longest earning .06% so now that I’m getting 1.35% it’s a night and day difference. Put it this way I earn more in interest per month now than I earned in an entire year with BoA. My only regret is not moving my savings over earlier especially when I think of all the “free” money that I missed out on.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Originally posted by @Dave Van Horn:

@Joe Splitrock
Have you considered insurance contracts? They're a safe bucket, offer a higher yield than most savings accounts, and there's usually liquidity (that's tax free).
Not something I have considered. Partly due to my general dislike of life insurance agents. I have had a couple pretty aggressive life insurance agents that have closed me off to the concept of insurance for investment. My impression has been that investing in index funds that hold bonds would yield a better return with similar risk. But I am far from an expert on this. I should probably learn more before bashing the idea.
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Dave Van HornPro Member
Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
8y
@Joe Splitrock
I definitely understand your sentiment towards insurance agents. It's tough to navigate their advice when they're trying to sell you something. There are certain hourly Financial advisors that could give you more guidance.
"Killing Sacred Cows" by Garrett Gunderson and "Missed Fortune 101" by Douglas Andrew are two books that may also be able to give you more ideas on what you could do.
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Michael H.
Rock Hill, SC · Member since 2015 · 104 posts · 209 votes
8y
I trade equity options when building up a reserve.
2 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
I use capital one 360 mainly because I also use them for credit cards and one mortgage but they only give you .2 percent interest so it’s better than the big banks but can clearly be better
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
8y
Joe Splitrock I park it in performing notes which get double digit returns and I know I can sell them at any point in time to other investors.
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Chatree C.
Real Estate Investor · San Francisco Bay Area, CA · Member since 2016 · 66 posts · 36 votes
8y
1.3% bank savings account Also, private lending short term (12 months) at ~10%, use online platform like PeerStreet so it’s very passive. Since the debt is backed by real estate, I feel the risk is lower than individual stocks.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
for me it will goes to my Commercial banks that are lending me construction financing.. this is different banking than buy and hold type of loans..
IE when we have a new project ( like i turned in 3 new builds to day) my request is for just shy of 1 mil in vertical.
well those loan request will have to go to loan committee and when your banker takes you to loan committee you cant have 4,675.00 in the bank.. thats no good.. these banks look for deposit relationships as much as lending relationships.. interest on the money is so inconsequential. If i was not doing vertical loans with the bank I would do as @Chris Seveney I would have all but emergency cash in my notes that we have for our clients. the beauty of these is the liquidity.. if you want to go to cash BOOM 5 days simple assignment and Note Alonge and you have your cash.. of course you need a bevy of note buyers in the wings.. but thats no issue most that have notes like we do have more demand than product.)
Commerical banking and loans is very different than buy and hold.. Fico is way down the list on what they look at for a decision.. I know many who look for money will say but i have a 800 fico..
when at lunch with my bankers today we talked about that .. And Fred the head credit officer at the bank said.. well fico while a barometer thats pretty good.. a fico wont pay you back.. a strong balance sheet and assets is how you get paid back..
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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
8y
LOL. You just came on BP and asked where we park money.
6 Reply
Mark S.Pro Member
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
8y
@Joe Splitrock, GS Bank (Marcus) at 1.40% APY. Online. Free.
1 Reply
Ola Dantis
Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
8y
@Joe Splitrock I am shocked that no one has exclaimed the magnificent power of cryptos yet lol :)
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
@Chris Seveney interesting on the performing notes. How did you get into this? Are there any good resources that explain how this works that you could recommend?
@Chatree C. for online private lending, I see those stories of people who lose money which has kept me from taking it seriously, but I should dig in more before passing judgement. My thinking is the stock market definitely has a longer track record and I think we will see as much as 30% up side this year. That makes me think any money I want to sit for 12 months should go in the market. I will check out PeerStreet, thanks for the input.
@Jay Hinrichs I read your posts and sometimes feel like you and I are playing the same game, but you are like 20 levels higher than I am. BP is lucky to have someone as experienced as you contribute so much to the forum.
@Account Closed bitcoin, haha. Did you see that Kodak said they will get into crypto and the stock ran up 125%. Time for anyone owning Kodak to sell. As much as I bash bitcoin, it is hard to argue that $1000 invested in bitcoin in 2010 has given way better return that stocks or real estate. How does the disclaimer go, "Past performance doesn't guarantee future results."
3 Reply
Michael G.
Rental Property Investor · Brooklyn, NY · Member since 2013 · 272 posts · 165 votes
8y
I've been a fan of Ally Bank - High Yield Checking Accounts, "Raise your Rate CDs," (raises your % if rates rise after you purchase) and my personal favorite: "High-Yield No-Penalty CDs" which is technically an 11-Month CD but imposes NO penalty if you cash it in early. Even if you only keep it in for 25 days, you still keep ALL your earned-interest.
(To any paranoid, crazed posters out here - you know who you are : NO. I am not an employee or "shill" for AllyBank.)
If you don't mind tying up cash for longer (~ 9 to 24 months) any of the older more-established top-name Real-Estate Crowdfunding Debt Lenders (1st Lien Debt, not Equity) providers have worked well for me earning very high yields (~9 - 11%). Good Luck.
2 Reply
Wendy Black
Investor · Phoenix, AZ · Member since 2014 · 230 posts · 122 votes
8y
Do you mean you are not ready to invest in homes or in RE, in general?
If you mean homes, I'd park some of it in performing notes. You can get in with 10K and earn 6-12% generally with it. If you've got to get out quickly, then sell the note.
1 Reply
Ernesto Hernandez
Realtor · San Francisco, CA · Member since 2017 · 408 posts · 361 votes
8y
Index Funds.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
@Wendy Black yes just waiting on homes. I would like to build up more cash to buy a portfolio potentially larger multifamily. While the money waits, I want to put it to work without locking it up or greatly risking it.
@Ernesto Hernandez I agree that index funds sound good. I think they will have good performance over the next 6-18 months, with low risk, which is what I am looking for. Do you have a specific target for index you like or just whole market. Some people do tech or medical or just S&P 500, so any preference?
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