[Ally online savings now at 1.80%]

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White Coat Investor
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Re: Ally online savings now at 1.45%

Post by White Coat Investor » Sat Feb 10, 2018 8:43 pm

WanderingDoc wrote:
Sat Feb 10, 2018 5:06 pm
White Coat Investor wrote:
Sat Feb 10, 2018 4:40 pm
TSP G fund up to 2.75% now. That's higher than the yield on Total Bond Market/F fund.
Any reason not to convert all bonds in the TSP to G fund? I believe I am 50/50 between G and F fund.
That's what I've always done. But if rates fall, you would be better off with F.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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William4u
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Re: Ally online savings now at 1.45%

Post by William4u » Sat Feb 10, 2018 8:48 pm

itworks wrote:
Fri Feb 09, 2018 4:08 pm
Alliant Credit Union savings: 1.45%, upped a few days ago.
+1 Alliant is great, and anyone can join.

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Re: Ally online savings now at 1.45%

Post by White Coat Investor » Sat Feb 10, 2018 8:55 pm

triceratop wrote:
Sat Feb 10, 2018 6:48 pm


The G fund is not fixed income! It is a stable value fund. The difference is important in the context of portfolio composition.
Now this is an interesting assertion. While I don't disagree that they act differently in many circumstances, what role do you see the G fund playing in a portfolio vs the F fund? I see their roles as being very similar, perhaps even identical.

The only possible portfolio construction point I could think of was that you could hold less G than F since G has no equity risk embedded in it.
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triceratop
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Re: Ally online savings now at 1.45%

Post by triceratop » Sat Feb 10, 2018 9:17 pm

White Coat Investor wrote:
Sat Feb 10, 2018 8:55 pm
triceratop wrote:
Sat Feb 10, 2018 6:48 pm


The G fund is not fixed income! It is a stable value fund. The difference is important in the context of portfolio composition.
Now this is an interesting assertion. While I don't disagree that they act differently in many circumstances, what role do you see the G fund playing in a portfolio vs the F fund? I see their roles as being very similar, perhaps even identical.

The only possible portfolio construction point I could think of was that you could hold less G than F since G has no equity risk embedded in it.
Given the choice of only holding G fund or F fund then I agree with you. But one could hold a treasury fund in an IRA. In such a situation I would prefer to hold a treasury fund in conjunction with an equity-heavy (say a 85/15 or 90/10) portfolio. When rates fall as they often do when equities are distressed one can benefit. For a more balanced portfolio the G fund begins to play a role, in my opinion. That is just how I would approach the question. Note that I would forego the F fund as well in an equity-dominated portfolio due to the corporate issues. This is not an original idea: I stole it from Boglehead "Doc", though the application to the TSP may be a unique application of the idea.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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jeffyscott
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Re: Ally online savings now at 1.45%

Post by jeffyscott » Sun Feb 11, 2018 10:28 am

triceratop wrote:
Sat Feb 10, 2018 6:48 pm
The G fund is not fixed income! It is a stable value fund. The difference is important in the context of portfolio composition.
I'm not sure why one would not include stable value in the "fixed income" category?

If you consider a binary division of a portfolio into stocks/fixed income, where fixed income would typically be composed of cash and bonds, I would (and do) certainly count stable value as part of the "fixed income" allocation. Perhaps it's a bond/cash hybrid, but that still means it is fixed income.
press on, regardless - John C. Bogle

allisgoodintheshire
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Re: Ally online savings now at 1.45%

Post by allisgoodintheshire » Sun Feb 11, 2018 11:05 am

I have a large chunk of cash ($500K) in an IRA moved over to Schwab some months back. I was reluctant to put into stocks and thank goodness I didn't. This comprises about a quarter of a 56% stock/54% fixed income/cash portfolio. In other words, it's about half of the fixed income/cash part of the portfolio.

The Schwab money market offerings are here:
http://www.magnifymoney.com/blog/earnin ... ates-2017/
Don't have enough to take advantage of the highest rates since I don't have $1MM to play with. Which would you do, if any?

Or would you do one of these?
http://www.magnifymoney.com/blog/earnin ... rates-2017.
The UFB Direct rate at 1.6% looks attractive as does the Able Banking at 1.7%. Maybe split into 2 two to take advantage of FDIC coverage?

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Re: Ally online savings now at 1.45%

Post by jeffyscott » Sun Feb 11, 2018 11:21 am

allisgoodintheshire wrote:
Sun Feb 11, 2018 11:05 am
I have a large chunk of cash ($500K) in an IRA moved over to Schwab some months back. I was reluctant to put into stocks and thank goodness I didn't.
Not sure what "some months" means, but US stocks (VTSMX) have a total return of 1.74% over the past 3 months per morningstar.
press on, regardless - John C. Bogle

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Re: Ally online savings now at 1.45%

Post by allisgoodintheshire » Sun Feb 11, 2018 11:29 am

jeffyscott wrote:
Sun Feb 11, 2018 11:21 am
allisgoodintheshire wrote:
Sun Feb 11, 2018 11:05 am
I have a large chunk of cash ($500K) in an IRA moved over to Schwab some months back. I was reluctant to put into stocks and thank goodness I didn't.
Not sure what "some months" means, but US stocks (VTSMX) have a total return of 1.74% over the past 3 months per morningstar.
I mean I had it sitting in cash and want to invest in cash-like vehicle, either Schwab, UFB Direct or Able Banking at 1.7%. Posted two links to the options.

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welderwannabe
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Re: Ally online savings now at 1.45%

Post by welderwannabe » Sun Feb 11, 2018 12:02 pm

They need to raise their money market account next. .90% needs to go up a bit.

Glad to see the savings account go up again though.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

chevca
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Re: Ally online savings now at 1.45%

Post by chevca » Sun Feb 11, 2018 12:41 pm

Yea, that's weird isn't it? Years ago when I joined Ally, the MM had a slightly higher APY than the online savings. Then the MM went down, they evened out, and the online savings has crept up ever since while the MM sits tight. What's the reason for that? Just Ally's preference wanting more folks to hold cash in the online savings accounts?

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welderwannabe
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Re: Ally online savings now at 1.45%

Post by welderwannabe » Sun Feb 11, 2018 1:24 pm

chevca wrote:
Sun Feb 11, 2018 12:41 pm
Yea, that's weird isn't it? Years ago when I joined Ally, the MM had a slightly higher APY than the online savings. Then the MM went down, they evened out, and the online savings has crept up ever since while the MM sits tight. What's the reason for that? Just Ally's preference wanting more folks to hold cash in the online savings accounts?
From a Reg D perspective their money market account and a savings account have the same reserve requirements, so I am not sure. One has to think that the market will bear a lower interest rate for MM accounts so they figure they can get away with it.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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triceratop
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Re: Ally online savings now at 1.45%

Post by triceratop » Sun Feb 11, 2018 2:02 pm

jeffyscott wrote:
Sun Feb 11, 2018 10:28 am
triceratop wrote:
Sat Feb 10, 2018 6:48 pm
The G fund is not fixed income! It is a stable value fund. The difference is important in the context of portfolio composition.
I'm not sure why one would not include stable value in the "fixed income" category?

If you consider a binary division of a portfolio into stocks/fixed income, where fixed income would typically be composed of cash and bonds, I would (and do) certainly count stable value as part of the "fixed income" allocation. Perhaps it's a bond/cash hybrid, but that still means it is fixed income.
I would not do a binary division.

It is not fixed income because the interest rate is variable and thus not fixed.

Also, the point of my post was how the whole portfolio behaves, the interplay between fixed income, stable value, and stocks. This is an area where the differences do matter.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Ally online savings now at 1.45%

Post by vbdoug » Sun Feb 11, 2018 6:31 pm

SlowMovingInvestor wrote:
Fri Feb 09, 2018 8:02 am
Purepoint is at 1.60% now, too.
+1

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Re: Ally online savings now at 1.45%

Post by Calygos » Sun Feb 11, 2018 6:44 pm

vbdoug wrote:
Sun Feb 11, 2018 6:31 pm
SlowMovingInvestor wrote:
Fri Feb 09, 2018 8:02 am
Purepoint is at 1.60% now, too.
+1
Looks like PurePoint has a $10k minimum as well (I tried them before but forgot about that) and is still only savings, no checking. That's one nice feature about Ally is that in a pinch, you could transfer money to checking and withdraw with their ATM card, or write a check. :P

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Re: Ally online savings now at 1.45%

Post by vbdoug » Sun Feb 11, 2018 7:03 pm

Looks like PurePoint has a $10k minimum as well (I tried them before but forgot about that) and is still only savings, no checking. That's one nice feature about Ally is that in a pinch, you could transfer money to checking and withdraw with their ATM card, or write a check.

All true. Re simplicity, I have Purepoint tied in with my Chase account and am always able to add or withdraw the next day.

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Re: Ally online savings now at 1.45%

Post by Calygos » Sun Feb 11, 2018 7:06 pm

vbdoug wrote:
Sun Feb 11, 2018 7:03 pm
All true. Re simplicity, I have Purepoint tied in with my Chase account and am always able to add or withdraw the next day.
Next day? How so quickly? Usually takes 2-3 days for ACH transfers for me from Ally.

SlowMovingInvestor
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Re: Ally online savings now at 1.45%

Post by SlowMovingInvestor » Sun Feb 11, 2018 7:10 pm

Calygos wrote:
Sun Feb 11, 2018 7:06 pm
vbdoug wrote:
Sun Feb 11, 2018 7:03 pm
All true. Re simplicity, I have Purepoint tied in with my Chase account and am always able to add or withdraw the next day.
Next day? How so quickly? Usually takes 2-3 days for ACH transfers for me from Ally.
Purepoint credits incoming transfers initiated from it immediately. I don't know about outgoing though -- that depends on the receiving firm.

Synchrony is the absolute worst, takes 3 days for transfers.

ohai
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Re: Ally online savings now at 1.45%

Post by ohai » Sun Feb 11, 2018 8:38 pm

Do you really care if your savings account rate is 1.45% or 1.50%? They are both substantially equal to zero after inflation and considering other investment choices. You should not have a large cash allocation to either of those accounts.

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Re: Ally online savings now at 1.45%

Post by vbdoug » Sun Feb 11, 2018 8:51 pm

Calygos wrote: "Next day? How so quickly? Usually takes 2-3 days for ACH transfers for me from Ally."

I don't know. It just has.

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Re: Ally online savings now at 1.45%

Post by WanderingDoc » Sun Feb 11, 2018 9:09 pm

ohai wrote:
Sun Feb 11, 2018 8:38 pm
Do you really care if your savings account rate is 1.45% or 1.50%? They are both substantially equal to zero after inflation and considering other investment choices. You should not have a large cash allocation to either of those accounts.
I think having a large cash position (8-20%) is critical. Lets you have instant liquidity when a killer real estate deal comes along. I have a hunch we will see many such deals over the next 2-3 years.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Ally online savings now at 1.45%

Post by katnrica » Fri Feb 16, 2018 12:00 am

Hi all

sorry about the dumb question -
what is the "TSP G" fund that's being discussed here?
I read earlier in this thread that it is yielding 2.75%.
Is that fund equivalent to an 'intermediate term' corporate bond?
is any portion of the interest tax deductible? (CA resident, if that matters)

Thank you all!

katnrica
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Re: Ally online savings now at 1.45%

Post by katnrica » Fri Feb 16, 2018 12:02 am

NASA Federal CU (nasafcu dot com) has an 11 month share certificate yielding 2.25%
($20K minimum investment)

(quite easy to gain membership IIRC; I did this several years ago by joining American Planetary Society, or something like it ;-) for a nominal $5 fee )

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Re: Ally online savings now at 1.45%

Post by gostars » Sun Feb 18, 2018 9:11 pm

katnrica wrote:
Fri Feb 16, 2018 12:00 am
Hi all

sorry about the dumb question -
what is the "TSP G" fund that's being discussed here?
I read earlier in this thread that it is yielding 2.75%.
Is that fund equivalent to an 'intermediate term' corporate bond?
is any portion of the interest tax deductible? (CA resident, if that matters)

Thank you all!
G Fund is a fund available to US federal government employees to invest in through the Thrift Savings Plan (TSP), which is their equivalent of a 401k. It's not something you can access on your own.

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Re: Ally online savings now at 1.45%

Post by BogleMelon » Mon Apr 09, 2018 3:28 pm

So many reputable banks now are in the 1.75-ish territory. Wondering when Ally is going to increase their rates!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Ally online savings now at 1.45%

Post by 4strings » Tue Apr 10, 2018 12:33 pm

BogleMelon wrote:
Mon Apr 09, 2018 3:28 pm
So many reputable banks now are in the 1.75-ish territory. Wondering when Ally is going to increase their rates!
ditto

Da5id
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Re: Ally online savings now at 1.45%

Post by Da5id » Tue Apr 10, 2018 12:57 pm

4strings wrote:
Tue Apr 10, 2018 12:33 pm
BogleMelon wrote:
Mon Apr 09, 2018 3:28 pm
So many reputable banks now are in the 1.75-ish territory. Wondering when Ally is going to increase their rates!
ditto
Heck, Vanguard Prime MM is at 1.76% compound yield (1.75% SEC) as of now.

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Re: Ally online savings now at 1.45%

Post by jeffyscott » Tue Apr 10, 2018 5:23 pm

Money market fund should pay more than an FDIC insured savings account. I think it's only over the last 10 years or so that this has been reversed?
press on, regardless - John C. Bogle

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Re: Ally online savings now at 1.45%

Post by Austintatious » Tue Apr 10, 2018 6:15 pm

The high yield savings and cd rates at Live Oak Bank look pretty good. The current high yield savings is advertised at 1.7%. I also think their cd rates, especially those on the shorter term certificates, are attractive. That 6 month certificate at 1.95% is pretty sweet.

Of course, one ought to consider the various fees and other terms applicable to all these "deals". It looks like the early withdrawal penalties at Live Oak are not excessive, like some I've seen.

I've had no dealings with this bank.

https://www.liveoakbank.com/personal-ba ... l-savings/

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Re: Ally online savings now at 1.45%

Post by WanderingDoc » Tue Apr 10, 2018 9:26 pm

Austintatious wrote:
Tue Apr 10, 2018 6:15 pm
The high yield savings and cd rates at Live Oak Bank look pretty good. The current high yield savings is advertised at 1.7%. I also think their cd rates, especially those on the shorter term certificates, are attractive. That 6 month certificate at 1.95% is pretty sweet.

Of course, one ought to consider the various fees and other terms applicable to all these "deals". It looks like the early withdrawal penalties at Live Oak are not excessive, like some I've seen.

I've had no dealings with this bank.

https://www.liveoakbank.com/personal-ba ... l-savings/
Has anyone used this Live Oak bank? Can you confirm that you've had a great and seamless experience? I typically wouldn't jump into these online banks unless they have had a long track record.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Ally online savings now at 1.45%

Post by Austintatious » Wed Apr 11, 2018 8:47 am

In seeking more info re Live Oak bank, I came across the assessment of its fiscal health provided, apparently, by LendingTree at the link posted below. For what it's worth, the bank gets high marks here.

As for that "great and seamless experience" WanderingDoc speaks of and that we'd all like to enjoy, the customer reviews posted there suggest to me that some would think their Live Oak experiences had met that high standard and some definitely would not.

https://www.depositaccounts.com/banks/l ... l#overview

txranger
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Re: Ally online savings now at 1.45%

Post by txranger » Wed Apr 11, 2018 10:38 am

Y even the no promo penalty cds r starting to fade compared to other options. Sent them an email, will prob have no effect and I ll vote w my feet.

shawn_lad
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Re: Ally online savings now at 1.45%

Post by shawn_lad » Wed Apr 11, 2018 8:22 pm

WanderingDoc wrote:
Tue Apr 10, 2018 9:26 pm
Austintatious wrote:
Tue Apr 10, 2018 6:15 pm
The high yield savings and cd rates at Live Oak Bank look pretty good. The current high yield savings is advertised at 1.7%. I also think their cd rates, especially those on the shorter term certificates, are attractive. That 6 month certificate at 1.95% is pretty sweet.

Of course, one ought to consider the various fees and other terms applicable to all these "deals". It looks like the early withdrawal penalties at Live Oak are not excessive, like some I've seen.

I've had no dealings with this bank.

https://www.liveoakbank.com/personal-ba ... l-savings/
Has anyone used this Live Oak bank? Can you confirm that you've had a great and seamless experience? I typically wouldn't jump into these online banks unless they have had a long track record.
I've had CDs with them for a few years (back from when they ran 2.5% deal for 5 years and when that rate was considered good) and I recently broke one of them to fund a better deal. They made a small mistake in calculating the penalty but were more than willing work with me on rectifying the error. They also helped in ACHing money out without prior setup with the other bank and it took 1 bus days, not 3, to post to the other account! OTOH, with just CDs they don't have very useful statements, and I just print out screenshots of my holdings and posted interest from time to time. Perhaps the situation is different when you have a savings account.

Overall, they seem fine to me. If I have a large enough balance for a savings account, they would be my choice, because I already bank with them, 1-day ACH makes the funds more readily accessible, and most importantly, they've had a good history of very competitive savings account yields ever since they started offering saving accounts.

WanderingDoc
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Re: Ally online savings now at 1.45%

Post by WanderingDoc » Thu Apr 12, 2018 12:01 am

shawn_lad wrote:
Wed Apr 11, 2018 8:22 pm
WanderingDoc wrote:
Tue Apr 10, 2018 9:26 pm
Austintatious wrote:
Tue Apr 10, 2018 6:15 pm
The high yield savings and cd rates at Live Oak Bank look pretty good. The current high yield savings is advertised at 1.7%. I also think their cd rates, especially those on the shorter term certificates, are attractive. That 6 month certificate at 1.95% is pretty sweet.

Of course, one ought to consider the various fees and other terms applicable to all these "deals". It looks like the early withdrawal penalties at Live Oak are not excessive, like some I've seen.

I've had no dealings with this bank.

https://www.liveoakbank.com/personal-ba ... l-savings/
Has anyone used this Live Oak bank? Can you confirm that you've had a great and seamless experience? I typically wouldn't jump into these online banks unless they have had a long track record.
I've had CDs with them for a few years (back from when they ran 2.5% deal for 5 years and when that rate was considered good) and I recently broke one of them to fund a better deal. They made a small mistake in calculating the penalty but were more than willing work with me on rectifying the error. They also helped in ACHing money out without prior setup with the other bank and it took 1 bus days, not 3, to post to the other account! OTOH, with just CDs they don't have very useful statements, and I just print out screenshots of my holdings and posted interest from time to time. Perhaps the situation is different when you have a savings account.

Overall, they seem fine to me. If I have a large enough balance for a savings account, they would be my choice, because I already bank with them, 1-day ACH makes the funds more readily accessible, and most importantly, they've had a good history of very competitive savings account yields ever since they started offering saving accounts.
Thank you for sharing your experience. That was very helpful.

I am getting 1.45% at an Ally savings account, and a 1.75% at an Ally CD. I really like that they answer the phone right away and are always ready to help.

Lately I do not feel like the money I think I have in a bank (ie. digits on the screen), is actually money. I have zero emotional reaction or attachment to it. For all I know, these ACH transfers between bank accounts are a sham. It seems like it is imaginary. The only thing I ever felt like was money were my real estate buildings.

I wish I cared more but these digits on a screen just aren't doing it for me anymore. I don't get any satisfaction or increased quality of life looking at these statements or watching them grow. Not sure if I am alone in this :?:
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

shawn_lad
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Re: Ally online savings now at 1.45%

Post by shawn_lad » Thu Apr 12, 2018 1:24 pm

WanderingDoc wrote:
Thu Apr 12, 2018 12:01 am
Lately I do not feel like the money I think I have in a bank (ie. digits on the screen), is actually money. I have zero emotional reaction or attachment to it. For all I know, these ACH transfers between bank accounts are a sham. It seems like it is imaginary. The only thing I ever felt like was money were my real estate buildings.

I wish I cared more but these digits on a screen just aren't doing it for me anymore. I don't get any satisfaction or increased quality of life looking at these statements or watching them grow. Not sure if I am alone in this :?:
I am the opposite - the real estate is nice and all but requires a lot of care and management that I don't have any interest in. Plus it has high transaction costs both in terms of those digits on the screen, and more importantly, my time! I rather rent and let the landlord do the work of taking care of the house, and then move, if I am unhappy... The digits on the screen have been feeding me and letting me buy the shelter so far, and I also heard somewhere online that there is some magical organization called FDIC somewhere out there protecting my digits on the screen. So I feel good about that :-)

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Re: Ally online savings now at 1.45%

Post by WanderingDoc » Thu Apr 12, 2018 3:39 pm

shawn_lad wrote:
Thu Apr 12, 2018 1:24 pm
WanderingDoc wrote:
Thu Apr 12, 2018 12:01 am
Lately I do not feel like the money I think I have in a bank (ie. digits on the screen), is actually money. I have zero emotional reaction or attachment to it. For all I know, these ACH transfers between bank accounts are a sham. It seems like it is imaginary. The only thing I ever felt like was money were my real estate buildings.

I wish I cared more but these digits on a screen just aren't doing it for me anymore. I don't get any satisfaction or increased quality of life looking at these statements or watching them grow. Not sure if I am alone in this :?:
I am the opposite - the real estate is nice and all but requires a lot of care and management that I don't have any interest in. Plus it has high transaction costs both in terms of those digits on the screen, and more importantly, my time! I rather rent and let the landlord do the work of taking care of the house, and then move, if I am unhappy... The digits on the screen have been feeding me and letting me buy the shelter so far, and I also heard somewhere online that there is some magical organization called FDIC somewhere out there protecting my digits on the screen. So I feel good about that :-)
I think you are confusing the house one lives in (a liability), and the house you rent out (an asset). Tenants pay your expenses and mortgage and then some, in the latter. I also rent - so we are in agreement with the advantages of that :) I have been a renter for the last 2 years and I can never see myself owning the house I live in! Id rather rent out a house that rents for $3000 and pay $1300 for my own rent.

I spend more time per year on this forum in 2017 than I did in 2017 on the entirety of my real estate business. I've counted. So when people tally up all the time they take reading investing articles on line, browsing forums, and managing their bank and equities accounts, it comes to more than I spend on my real estate business. You spend time on that you are interested in - bottom line.

People that think they need all this grand deal of time to invest in real estate, haven't talked with INVESTORS in real estate.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Ally online savings now at 1.45%

Post by jeffyscott » Thu Apr 12, 2018 4:30 pm

WanderingDoc wrote:
Thu Apr 12, 2018 3:39 pm
I think you are confusing the house one lives in (a liability), and the house you rent out (an asset).
How is the house I live in a liability? That is only the case if one owns more house than one would rent. A quick estimate in my case indicates that I would need to earn at least around 4-5% after-tax to break even, were I to sell my house and rent a similar one. And I am ignoring expected appreciation in the price of the house I live in, as well as future increases in rent.
Tenants pay your expenses and mortgage and then some, in the latter. I also rent - so we are in agreement with the advantages of that :) I have been a renter for the last 2 years and I can never see myself owning the house I live in! Id rather rent out a house that rents for $3000 and pay $1300 for my own rent.
You seem to believe that you are paying less in rent than it would cost you to buy, but those that you rent to are doing the opposite? You are also paying someone else's expenses and mortgage and then some with your rent.
press on, regardless - John C. Bogle

WanderingDoc
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Re: Ally online savings now at 1.45%

Post by WanderingDoc » Thu Apr 12, 2018 10:04 pm

jeffyscott wrote:
Thu Apr 12, 2018 4:30 pm
WanderingDoc wrote:
Thu Apr 12, 2018 3:39 pm
I think you are confusing the house one lives in (a liability), and the house you rent out (an asset).
How is the house I live in a liability? That is only the case if one owns more house than one would rent. A quick estimate in my case indicates that I would need to earn at least around 4-5% after-tax to break even, were I to sell my house and rent a similar one. And I am ignoring expected appreciation in the price of the house I live in, as well as future increases in rent.
Tenants pay your expenses and mortgage and then some, in the latter. I also rent - so we are in agreement with the advantages of that :) I have been a renter for the last 2 years and I can never see myself owning the house I live in! Id rather rent out a house that rents for $3000 and pay $1300 for my own rent.
You seem to believe that you are paying less in rent than it would cost you to buy, but those that you rent to are doing the opposite? You are also paying someone else's expenses and mortgage and then some with your rent.
That is the way I choose to define a liability. If you own the house you live in - you have to pay taxes, insurance, and interest. You have to fix the garage door if it breaks. You have to mow the lawn or pay someone to do it. You cannot deduct depreciation. You have to literally put in your own time and sweat into the house just to live in it. The reverse is true if you have a cash flowing rental - your tenant pays all expenses, including the property management payment, and then some! You deduct depreciation. Rental real estate pays you in at least 5 ways (including cash flow on top of all expenses including repairs and CapEx), you don't get ANY of that with a house you live in, except for appreciation. A house you live in pays you in one way if you're lucky (appreciation), while making you stuck in it for a long time, losing freedom and mobility in most cases.

I have thought about this front and back - if you own the house you live in, its a liability. Big time. And there is nothing wrong with that! There are plenty of reasons why someone would want to own the house they live in (ie. you can decorate it the way you want, it would be more "feel-good" to raise a family, etc.) It doesn't matter if I am paying someone else's expenses if I rent - I did not claim that the place I RENT is an ASSET to me. Until the house you live in can pay you 5+ ways, and until the expenses and time you put into being able to live in that house are paid by someone else/become business expenses, its a liability.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

Da5id
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Re: Ally online savings now at 1.45%

Post by Da5id » Fri Apr 13, 2018 9:07 am

WanderingDoc wrote:
Thu Apr 12, 2018 10:04 pm
That is the way I choose to define a liability. If you own the house you live in - you have to pay taxes, insurance, and interest. You have to fix the garage door if it breaks. You have to mow the lawn or pay someone to do it. You cannot deduct depreciation. You have to literally put in your own time and sweat into the house just to live in it. The reverse is true if you have a cash flowing rental - your tenant pays all expenses, including the property management payment, and then some! You deduct depreciation. Rental real estate pays you in at least 5 ways (including cash flow on top of all expenses including repairs and CapEx), you don't get ANY of that with a house you live in, except for appreciation. A house you live in pays you in one way if you're lucky (appreciation), while making you stuck in it for a long time, losing freedom and mobility in most cases.

I have thought about this front and back - if you own the house you live in, its a liability. Big time. And there is nothing wrong with that! There are plenty of reasons why someone would want to own the house they live in (ie. you can decorate it the way you want, it would be more "feel-good" to raise a family, etc.) It doesn't matter if I am paying someone else's expenses if I rent - I did not claim that the place I RENT is an ASSET to me. Until the house you live in can pay you 5+ ways, and until the expenses and time you put into being able to live in that house are paid by someone else/become business expenses, its a liability.
I'd give these a read:
https://en.wikipedia.org/wiki/Imputed_rent
https://earlyretirementnow.com/2018/03/ ... ownership/.

If you value imputed rent as "0", which you seem to as you say the value of a house is "appreciation", I think you aren't correct. I can't imagine a bookkeeping where you don't at least give it the value of the rent you would have spent on a comparable house if that is where you'd have chosen to rent.

You can of course define a house you fully own as a liability. What do you mean by that? Here is what the dictionary says. What is your definition of liability? Do you mean the second, non-financial sense?

noun, plural liabilities.
1.
liabilities.
moneys owed; debts or pecuniary obligations (opposed to assets ).
Accounting. liabilities as detailed on a balance sheet, especially in relation to assets and capital.
2.
something disadvantageous:

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Re: Ally online savings now at 1.45%

Post by jeffyscott » Fri Apr 13, 2018 9:15 am

WanderingDoc wrote:
Thu Apr 12, 2018 10:04 pm
That is the way I choose to define a liability.
Define it however you wish, but you are comparing owning the home you live in to owning a rental property as if you can not do both. Those are two separate decisions. You have to live somewhere, so a valid comparison is what does it cost to rent vs. buy. You can certainly include all costs in owning, including the cost of paying for maintenance and repairs or the value of your time if you do it yourself.

Owning the home I live in does not prevent me from owning a rental property. I choose not to, but I certainly could choose to invest in that vs. stocks and bonds.

The number of "ways" you get paid does not matter, but as noted above you ignore the imputed income you get from owning a home in that you are not paying rent.

My son presents an easy comparison, he has no interest in the added responsibility of owning but recently bought an apartment condo for financial reasons. His choice was to buy the condo for $53,000 (cash, no mortgage) and then pay $250 per month in association fees and property tax. vs. a comparable rental that would cost $700 per month or an acceptable rental about $600. His $53,000 is saving him at least $4200 per year, he will have minimal maintenance costs, but let's make the savings $3500 per year that's still a 6.6% after tax return. The equivalent rental cost will likely increase at the rate of inflation (as will taxes and condo fees), so I think that makes it a 6.6% real return as the net savings will rise at the rate of inflation.

You would seem to say he should move out of his condo, rent that to someone else and then rent himself an apartment for $600-700 per month. How is that logical?
press on, regardless - John C. Bogle

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Re: Ally online savings now at 1.45%

Post by prudent » Fri Apr 13, 2018 9:24 am

I removed a number of off-topic posts. After review, the posts have been restored. Please stay on topic (Ally savings now at 1.45%).

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Re: Ally online savings now at 1.45%

Post by Scotttheking » Tue Apr 17, 2018 6:14 am

I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.

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Re: Ally online savings now at 1.45%

Post by simplesimon » Tue Apr 17, 2018 7:19 am

Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?

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Re: Ally online savings now at 1.45%

Post by Scotttheking » Tue Apr 17, 2018 8:02 am

simplesimon wrote:
Tue Apr 17, 2018 7:19 am
Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?
Seems to be.

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Re: Ally online savings now at 1.45%

Post by sperry8 » Tue Apr 17, 2018 8:39 am

simplesimon wrote:
Tue Apr 17, 2018 7:19 am
Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?
Wild. I was just about to move monies into Prime Money Market and stumbled upon this. I too am in the 22% bracket for 2018. But of course that is marginal (not effective). Is that the proper formula when you are not paying 22% taxes on all monies? (you pay 0% less than x and then 15% on up to y, etc).
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

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Re: Ally online savings now at 1.45%

Post by Leif » Tue Apr 17, 2018 9:14 am

Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Thanks for bring that to my attention! Vanguard Tax-Exempt MM, VMSXX, with a federal tax free rate of 1.48%, seems far superior to Ally and even Prime. It does have an AMT of 17.3%, but after the tax changes most of us don't care anymore.
Investors should diversify across many asset-classes so that whatever happens, we will not have all our investments in underperforming asset classes and thereby fail to meet our goals-Taylor Larimore

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Re: Ally online savings now at 1.45%

Post by simplesimon » Tue Apr 17, 2018 11:37 am

sperry8 wrote:
Tue Apr 17, 2018 8:39 am
simplesimon wrote:
Tue Apr 17, 2018 7:19 am
Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?
Wild. I was just about to move monies into Prime Money Market and stumbled upon this. I too am in the 22% bracket for 2018. But of course that is marginal (not effective). Is that the proper formula when you are not paying 22% taxes on all monies? (you pay 0% less than x and then 15% on up to y, etc).
Yes, because the dividend is income and taxed at the marginal rate, assuming all your other income fills the lower brackets.

I'm trying to figure out why the muni money market is yielding this much...

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Re: Ally online savings now at 1.45%

Post by sperry8 » Tue Apr 17, 2018 11:47 am

simplesimon wrote:
Tue Apr 17, 2018 11:37 am
sperry8 wrote:
Tue Apr 17, 2018 8:39 am
simplesimon wrote:
Tue Apr 17, 2018 7:19 am
Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?
Wild. I was just about to move monies into Prime Money Market and stumbled upon this. I too am in the 22% bracket for 2018. But of course that is marginal (not effective). Is that the proper formula when you are not paying 22% taxes on all monies? (you pay 0% less than x and then 15% on up to y, etc).
Yes, because the dividend is income and taxed at the marginal rate, assuming all your other income fills the lower brackets.

I'm trying to figure out why the muni money market is yielding this much...
Great to know. I'm actually in the 24% bracket so even better for me. But if one is retired and only has dividend and interest income... would this formula still apply? That is, wouldn't the effective rate rather than marginal be used?
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

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Re: Ally online savings now at 1.45%

Post by simplesimon » Wed Apr 18, 2018 5:09 am

sperry8 wrote:
Tue Apr 17, 2018 11:47 am
simplesimon wrote:
Tue Apr 17, 2018 11:37 am
sperry8 wrote:
Tue Apr 17, 2018 8:39 am
simplesimon wrote:
Tue Apr 17, 2018 7:19 am
Scotttheking wrote:
Tue Apr 17, 2018 6:14 am
I guess they are going to lag for a while.
Vanguard Muni Money Market SEC yield is 1.48%. It's an easy decision to go for tax free yield over the same taxable yield.
Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?
Wild. I was just about to move monies into Prime Money Market and stumbled upon this. I too am in the 22% bracket for 2018. But of course that is marginal (not effective). Is that the proper formula when you are not paying 22% taxes on all monies? (you pay 0% less than x and then 15% on up to y, etc).
Yes, because the dividend is income and taxed at the marginal rate, assuming all your other income fills the lower brackets.

I'm trying to figure out why the muni money market is yielding this much...
Great to know. I'm actually in the 24% bracket so even better for me. But if one is retired and only has dividend and interest income... would this formula still apply? That is, wouldn't the effective rate rather than marginal be used?
No, because we want to look at the taxation of incremental (marginal) dollars.

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sperry8
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Re: Ally online savings now at 1.45%

Post by sperry8 » Wed Apr 18, 2018 6:29 am

simplesimon wrote:
Wed Apr 18, 2018 5:09 am
sperry8 wrote:
Tue Apr 17, 2018 11:47 am
simplesimon wrote:
Tue Apr 17, 2018 11:37 am
sperry8 wrote:
Tue Apr 17, 2018 8:39 am
simplesimon wrote:
Tue Apr 17, 2018 7:19 am


Is this a free lunch compared to VMMXX even for those in the 22% federal tax bracket? 1.48%/0.78 = 1.89% vs VMMXX's current 1.78% yield. Am I missing something?
Wild. I was just about to move monies into Prime Money Market and stumbled upon this. I too am in the 22% bracket for 2018. But of course that is marginal (not effective). Is that the proper formula when you are not paying 22% taxes on all monies? (you pay 0% less than x and then 15% on up to y, etc).
Yes, because the dividend is income and taxed at the marginal rate, assuming all your other income fills the lower brackets.

I'm trying to figure out why the muni money market is yielding this much...
Great to know. I'm actually in the 24% bracket so even better for me. But if one is retired and only has dividend and interest income... would this formula still apply? That is, wouldn't the effective rate rather than marginal be used?
No, because we want to look at the taxation of incremental (marginal) dollars.
So what formula or online tax-equiv calculator would I use to see if Prime MM or VMSXX is better for someone in the 24% bracket who is retired (and thus only has dividend and interest as their income)?

VG recently pulled their online calculator down :( https://personal.vanguard.com/us/FundsTaxEquivForYield
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Rob54keep
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Re: Ally online savings now at 1.45%

Post by Rob54keep » Wed Apr 18, 2018 6:38 am

There are a few out there or you can calculate it yourself:
https://www.calcxml.com/do/inc11
(Tax-Free Yield)/1-(Marginal Tax Rate) = Tax Equivalent Yield

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