Where is a safe place to park your cash for your down payment for your Irvine Home?

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Awgee,



I am very impressed with your knowledge in economics. I've done a lot of my own independent research and had many of my own theories of where this economy is headed and you have confirmed them all. Thanks for allowing me to pick your brain. You are a true value to this forum.



I am just absolutely amazed of how financially savvy people are on this board. I guess that is how you guys end up being so successful and living in Irvine.
 
Flattery will get you everywhere. But, seriously I have observed and figured that about 90% of the posters on this board are smarter than me.
 
[quote author="awgee" date=1213741470]Flattery will get you everywhere. But, seriously I have observed and figured that about 90% of the posters on this board are smarter than me.</blockquote>


Seriously, its not about smart and not so smart, its about doing the research and being objective. Alot of times people are so blinded by the "could be" they forget about the "what should be and what most likely will happen".



Kool-Aid as it were.



Anyways good luck and don't work too hard.

-bix
 
[quote author="no_vaseline" date=1213600833][quote author="waiting2buylater" date=1213599467]Breaking even with inflation while the asset I want to buy is depreciating at annual 15% to 20% clip is a sound financial decision for me. There is too much down-side risk right now for Gold, Silver, Oil, Corn and/or the stock market. Panda and I have a short time horizon so it does not make sense for us to risk it IMO.</blockquote>


I agree. Whatever losses you lose by not maximizing your short turn returns IMO are far outshadowed by the potential of watching your investment tank.



Investment capital is investment capital. Working capital is working capital. Having too much working capital might be suboptimal use of capital, but it certainly isn't a fatal problem. I treat the 20% downpayment as working capital.</blockquote>


Best piece of advice for this thread thus far.
 
[quote author="biscuitninja" date=1213704665][quote author="IrvineRealtor" date=1213703579]we need a poker <strong>night</strong>...</blockquote>


You tell me... does this guy ^^ sound like he knows what he's doing? Me, i can calculate odds on a single deck pretty easily (thats not a big issue), but P.L.A.Y.I.N.G a game? Now I suck badly....



But i'll donate to the cause for fun.



-bix</blockquote>


I'm up for it too!



Panda, as far as investment, if you don't wan to invest in a particular stock, check out some ETFs (short, long, value, blend, growth, sector, etc.) This is less risky than stocks (check out expense ratios).



I don't think it's that bad t invest 25% of your downpayment fund in the stock market as long as you understand of the underlying risk. It could crash 20% in one day (October 1987). But the major indexes are low compared to their fundamental values. If you have less than a 1 year horizon, you shouldn't invest...what difference will 10% make from 3%? Over 2 years, it's less risky, but still... Stock should be bought for the long run, unless you think you can outperform the market...tough call.
 
We've been doing really well with stocks lately - a lot better return than CDs. Although I worked in the financial industry on Black Monday, and it wasn't fun. I remember it like it was yesterday. It could happen again and we'll see all our paper profits gone in a matter of minutes. Whenever you invest in stocks, just be prepared to lose that money. It's another form of gambling (and it can get addictive).
 
Worse days will always be ahead. Not to be a pessimist, just saying Black Monday should not be regarded as a worst case event. +1 on the addictive quality of trading...I got caught up pretty hard in 2000/2001. Wish I could say it went well, but I can't (well it did for a while). Slowed things down a lot since then and doing much better. Just wish I had the same capital base I had then ;).
 
[quote author="Daedalus" date=1213792412]Worse days will always be ahead. Not to be a pessimist, just saying Black Monday should not be regarded as a worst case event. +1 on the addictive quality of trading...I got caught up pretty hard in 2000/2001. Wish I could say it went well, but I can't (well it did for a while). Slowed things down a lot since then and doing much better. Just wish I had the same capital base I had then ;).</blockquote>


A 20% drop today would put us back in the mid-1999 range...no appreciation in almost 10 years...ouch!
 
[quote author="Roo" date=1213831943]A 20% drop today would put us back in the mid-1999 range...no appreciation in almost 10 years...ouch!</blockquote>


The NASDAQ is still below early summer levels of 1999. Even at recent 52 week hi was below the mid-1999 pricing. It's nine years later. It's still 45% below peak in March 2000.



Look at the NAZDAQ chart from 1999 to present, I suspect you can see the future of the housing market. :-)
 
I've tried investing money through brokers and banks......Bank of America, UBS P-W.



Each time I've lost money.......enough to realize that these organizations are looking out for number one(there own bottom line).



My suggestions are:



a) if you are investing money for the long term, put it into index funds, keep putting the money in and wait 30 or 40 years. You will do fine with that strategy.



b) For money that you need in less than 10 years, keep it in CD's. Interest rates are low right now, but you can sleep at night and the money will always be there if you follow FDIC limits.



c) If you want to invest in the markets be prepared to spend a lot of time researching companies financial reports, markets and trends. Most people don't have the time or patience for this type of investing.



Otherwise, just take your money to las Vegas and have a good time........what happens there stays there, especially your money.
 
I think Nanowest is right except now that you can get foreign currency deposits through online banking I'd put 25% or so in foreign currencies as a hedge against US-specific inflation.
 
[quote author="FairEconomist" date=1213838200]I think Nanowest is right except now that you can get foreign currency deposits through online banking I'd put 25% or so in foreign currencies as a hedge against US-specific inflation.</blockquote>


Word Up, Brother! ... I couldn't agree with you more.



I currently have 25% of my entire Irvine Down Payment Fund in foreign currencies right now. I am thinking about increasing that number to 33% this year.



IPOP suggested to me to convert 100% of my USD into EUROS. Sorry IPOP, although, deep inside, Panda knows it is the right thing to do, he doesn't have the balls to do it.
 
[quote author="NanoWest" date=1213837646]c) If you want to invest in the markets be prepared to spend a lot of time researching companies financial reports, markets and trends. Most people don't have the time or patience for this type of investing.

</blockquote>


This is true and in theory you can't beat the market anyway.



Personally, I like doing research on stocks and the market. If you don't enjoy it, you shouldn't do it.
 
OK. so outside of the PANDA'S IRVINE DOWN PAYMENT FUND, I do take a lot more risks with my IRA account since I cannot see this money until i am 59 years old. I am a big picture type of guy so I prefer to purchase ETF and Index funds, and take a value oriented investing strategy.



I am very bullish for the long term prospective of the Asian Market. I believe that the Asian economies have all the ingredients to potentially take off: high growth rates, low taxes, a pro-business regulatory environment, a high savings rate, an educated populace, and a latent appetite for consumption easily equal to the task of surpassing the U.S. Market.



I currently hold equity indexes in Canada, Hong Kong, Japan, Singapore, and Taiwan. I have some, but not much money in India, South Korea, and China.



I know that there are many asians on this forum and many who probably invest in Asia. Which country do you think has the biggest upside potential in the next 10 years? What are the political risks and pros/cons in investing in each of these countries?



I really like Japan as the price of index has really taken a beating. Good product at discounted prices, just like Irvine. Currently you can buy the Japan Index shares at the price back in 1996 December prices. If i was offered 1996 prices to buy an Irvine home, I would take it in a heart beat.



Panda
 
I met with a financial adviser yesterday and told her my goal was to buy another home in 5 years and needed a vehicle to stow my cash. She recommended a Variable universal life policy putting $650/month into the account.



Beats ING Direct I guess
 
[quote author="Shooby" date=1213924244]I met with a financial adviser yesterday and told her my goal was to buy another home in 5 years and needed a vehicle to stow my cash. She recommended a Variable universal life policy putting $650/month into the account.



Beats ING Direct I guess</blockquote>


I suspect your advisor is advising based on their commission.



You've bought a life insurance policy that pays an insurance premium and invests in underlying funds. Or are you planning on borrowing your downpayment from your future death benefit?
 
[quote author="No_Such_Reality" date=1213925097][quote author="Shooby" date=1213924244]I met with a financial adviser yesterday and told her my goal was to buy another home in 5 years and needed a vehicle to stow my cash. She recommended a Variable universal life policy putting $650/month into the account.



Beats ING Direct I guess</blockquote>


I suspect your advisor is advising based on their commission.</blockquote>


YES!!! They make a ton of money in comission. First year's premiums might all go to the broker...



I'm not saying it is not good, but make sure you review everything carefully.
 
Yeah that's what I was suspecting. A VUL seemed like the last thing to do, but the way she explained it was that I can borrow from the cash value of the policy, which if I put $650 a month it would be worth over 33K in 5 years which I can take out tax free and use towards a down payment.
 
VUL = SCAM



I forgot what company it was but they were busted and there was a huge cover story on the SCAM in Money Magazine back in 2001-2002 I think.
 
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