Use access key #2 to skip to page content.

Gemini846 (35.49)

If you had $5,000 cash right now what would you do with it?



January 06, 2009 – Comments (23)

I have an account that I opened a couple years ago at a traditional brokerage. At the time they were offering 10 free trades a month and with a rather attractive sweep money market fund. I liquidated my few remaining positions about 8 months ago and have been sitting in cash (emergency fund et).

I got a letter yesterday saying these accounts are being discontinued and converted into another type of account with a $40 annual fee and the sweep rate for sub $25k in cash is being reduced to the bare minimum (0.1% I think it said).

So here are my options as I see it.

- I can transfer it somewhere else (like high interest savings or something).
- I can transfer it and put it back in the market trying to stay relativly liquid in case I need to sell it.
- I can set up some kind of income portfolio on it. (Reits and MLPs with strong income streams).
- I can use half of it to pay down debt that should be gone in a couple months anyway.

You can suggest what you think I should do, but I'm really looking for what you would do with it.

23 Comments – Post Your Own

#1) On January 06, 2009 at 10:15 AM, abitare (29.90) wrote:

If you want to be rich? Then your first $35k should go into your own buisness.

Top Fool 21 Nov 08

Report this comment
#2) On January 06, 2009 at 10:33 AM, bconstrukt (< 20) wrote:

pay off any debt first, then go from there

Report this comment
#3) On January 06, 2009 at 10:38 AM, Gemini846 (35.49) wrote:

My business expansion fund is seperate, but dumping this money into it is certainly an option. There are incredable deals on capital equipment right now.

Report this comment
#4) On January 06, 2009 at 10:43 AM, TDevils13 (94.52) wrote:

split it between CAT and GE.

Report this comment
#5) On January 06, 2009 at 10:56 AM, jt225t (91.40) wrote:

I would pay off debt, but if you know its going to be gone in a few months anyhow, I would go into bonds or something.

Report this comment
#6) On January 06, 2009 at 11:06 AM, TotheGoodLife (< 20) wrote:

It depends if your in alot of debt or not and the duration it will take to pay off that debt.  If your looking to double or even triple that $5,000 then you would want to dump all of it into TCK.  This stock is ready to soar and is showing signs of just that.  I personally have about 5,000 shares that I bought at $3.64 and If my calculations are correct this summer I should 5 bag this giant.  Which in return I will pay the rest of my mortage off with.  Thats what I would do.


Report this comment
#7) On January 06, 2009 at 11:11 AM, skeptic86 (36.01) wrote:

depending on the interest on the debt. i'd pay that.

Report this comment
#8) On January 06, 2009 at 11:13 AM, GordonsGecko (73.65) wrote:

Drive to Foxwoods.  Play $4/8 no-limit texas hold 'em. 

Report this comment
#9) On January 06, 2009 at 11:15 AM, TDRH (97.19) wrote:

Assuming you have no serious debt to cover, I would evaluate Natural Gas Pipelines.     They are not very exciting, but they are semi-regulated and are currently offering competive yields.   Expansion plans may be delayed by fewer wells drilled, so little in the way of earnings growth, but a dependable dividend and relative price stability could provide you with some upside or a holding point till you find what you like.

Nothing is a safe haven, but with the Yield on T-bills at such lows, I have seen somewhat of a recovery in what little  I own in this segment.  I believe their is an ETF for this area as well.

I would suggest a specific company, but imagine you have your own criteria for investing. 

 TDevils likes CAT, and I do too as a hold, but not sure I would buy it at this point.   As you said there are attractive deals in Capital Equipment.   

GE Finance is kind of a black hole at this point.   Their former CEO Jack Welch got out while the getting was good and left his replacement as the bagholder.    I would not be suprised if they sold off some key lines.  



Report this comment
#10) On January 06, 2009 at 11:38 AM, leftfield4sure (< 20) wrote:

I would pay off debt take remainder pick three value based equities well researched non volatile that are going to gain maybe not across the board but steadily,diverse non related to each other say rail (CNI) manufacture (LUFK)proven winner( BRK B) then between payed down debt and equites I still have a built in emergeny fund using equites or new debt ;situtation depending in the event i need cash.Minimising risk but still very real exposure to a net gain.Remebering to stay with fields I understand have familarity with and can keep abreast of.

          Regards ......  Leftfield

Report this comment
#11) On January 06, 2009 at 12:11 PM, PauvrePapillon (99.85) wrote:

Five Gs is not an emergency fund. It's basically walking around money (50 C-notes, about a half-inch or so of paper). It looks good when you reach into your pocket to tip the valet and, yes, this is important. If this is really all you have, you should carry at least two thousand in your pocket (40 fifties) and dump the rest into a basic bank account.

 If you're making decent money, great, cut down or refocus your spending so that you save more and get at least six months worth of expenses stashed at a reputable bank. I recommend Wells Fargo. Warren Buffet is a big shareholder and he has the resources to research all of these banks and pick a good one. You can put it in CDs if you like. It doesn't make that much difference. You're not going to change your life situation with returns at this level.

If you’re not making enough money, you’ve got three ways to go. One, go back to school and credential your self for a high-paying job. Two, go learn a trade by working for someone else and as soon as you have absorbed the basics, quit and go start your own business. Three, get yourself a sales job and as soon as you have some skills, start looking for an opportunity where your talents will be properly rewarded.

Then, when you do have a little money to work with, forget all this textbook money management stuff that makes some sense once you’re dealing with an eight-figure portfolio but will never get you there from your point A and swing for the fences. From where you are starting, one or two multibaggers is what you need and all you need. You find these not by taking the advice of money managers but by doing your own research (usually in markets where you have specialized knowledge) and betting on trends before Wall Street picks up on them. For more on this, see Peter Lynch, “One Up On Wall Street”.

Meanwhile, here’s a gift. Accuray (ARAY)

Report this comment
#12) On January 06, 2009 at 12:36 PM, chk999 (99.97) wrote:

I want to second TDRHs idea to look at nat gas. In addition to pipelines, I think some of the E&P companies are very cheap right now.

Chris - long CHK and ATPG

Report this comment
#13) On January 06, 2009 at 12:46 PM, jddubya (< 20) wrote:

dump the money into your business...

as you mention, the deals on capital equipment are incredible.

I think shopping for goods and services that you need and can afford at this point in the economy provides a huge indirect return... whether it's clothing, housewares, a car, or heavy equipment.

Report this comment
#14) On January 06, 2009 at 12:50 PM, deputidave (25.02) wrote:

buy HTGC currently paying a 16% yield, and it pays like clockwork.

Report this comment
#15) On January 06, 2009 at 1:02 PM, socialconscious wrote:

I concur with several who say pay the debt and I would with most of it. I would take $250-$300 and have a night on the town and donate like $100-$150 to a soup kitchen. Lately they are having a harder time with less donations and more needs.In short personally I feel psychologically better when I am debt free and my decisions are better plus giving always feels good. All IMHO and all best.

Report this comment
#16) On January 06, 2009 at 1:19 PM, TrailerParkJawa (< 20) wrote:

If I had another $5000 cash out of the blue I would split it up into 4 chucks of $1250 each.  First chunk would go to regular savings, second chunk to Roth IRA, 3rd would be used for travel  and the fourth would be used whatever comes along. Mabye buy some new skis or replace some blinds or fix the crack in the windshield. Stuff like that.

If this is money I've already had someplace else, then I'd chop it into two parts, savings and ROTH IRA.



Report this comment
#17) On January 06, 2009 at 1:22 PM, KWT8011 (< 20) wrote:

Totally agree with everyone that said $5000 isn't an emergency fund, unless you meant you lumped that money in with what you would consider to be your e-fund. Since you own a business, i'd imagine you're a little more well capitalized.

To echo others, debt-free is the way to be. Sounds like you don't want to be in the market, so whats leftover after the debt could go into your business (do you advertise or market your business? Consider that along with capital purchases...) If its not really worth it, then throw it in HSBC or FNBO online accounts (2.6% & 2.8% right now) or a CD.

Have a house? Maybe you could add a bathroom or a small kitchen renovation.

Or, you could just do something fun. Long vacation somewhere, buy an Xbox, whatever suits your fancy

Good luck.

Report this comment
#18) On January 06, 2009 at 1:43 PM, angusthermopylae (37.87) wrote:

I put my "spare" money (what little I have) into BHY  Black Rock High Yield bond fund and DRIP.

With the stock price down, it's currently paying off about 13% APY...a little over 1% a month.

While I realize that the whole bond sector is risky (and I've been watching with the whole California budget thingy with a bottle of beer and a big tub of popcorn), it's a good place for me to park funds until I find something better.

As always, YMMV.

Report this comment
#19) On January 06, 2009 at 2:13 PM, FleaBagger (27.32) wrote:

Hey! I started looking for the maker of CyberKnife when I heard ads for it on the radio! I keep reading on TMF boards and such that ISRG has no meaningful competition, but CyberKnife sounds like it treats prostate cancer just as well.

Any further comment on Accuray or CyberKnife, PauvrePapillon?

Report this comment
#20) On January 06, 2009 at 2:17 PM, FleaBagger (27.32) wrote:

I missed where Gemini said he owned a business.

Report this comment
#21) On January 07, 2009 at 7:45 AM, Gemini846 (35.49) wrote:

Man you guys have some great ideas. I mentioned my consulting partnership in the 3rd post after abitare mentioned it. We have been looking at some effective advertising options, but get most of our business on referrals and trade shows. The business is stable but not something I do full time. I'd like to, but we opted for a softer launch given a lack of desire to expand on credit at this point. My wife will be more active in the business after she has her baby, full time if possible.As if I didn't have enough going on I'm finishing up an IT certificate, which is where the debt comes from. I work full time as a database admin for a finance company which is how I ended up here in the first place. One thing I didn't mention is that I'm not a home owner. We first had the income and opportunity in 2005 but I knew with taxes and insurance, and lack of verifiable income (other than tax returns) we would have been sub-prime at best. That’s another reason I'm working full time, that and health insurance. I'm glad we waited as prices are coming down. I live in Florida so you should have an idea of how bad things are inflated here.

A possible buying opportunity on a real steal is what I’m waiting for which is the main reason I want to keep this relatively liquid but growing. The other reason is another unexpected tax bill like I had last year. 

Report this comment
#22) On January 09, 2009 at 10:06 PM, hotrods1431 (93.65) wrote:

If 5k is all you have then put it in a regular savings account for an emergency fund.  Next, pay off your debt as quick as possible.  Lastly, adjust your spending so that you can save more so that you can start to do some real investing.  Time is the only thing that can make you the big bucks in the market.  The more time you have the better chance you have make the big bucks.   

Report this comment
#23) On January 09, 2009 at 10:29 PM, dumbokie1 (< 20) wrote:

Have you looked at shipping stocks.  DRYS is up considerably since the November low.  It should have lots of room to run.  There are others in this group that are trying to come off recent lows.  dumbokie

Report this comment