We took the money we had for a down payment on a house and brought it all home for Y2K. Now we have decided not to buy the house and aren't sure what to do with the money. We save about $1600.00 a month and thought we could just buy CDs with it for the next five years. The bank wants us to put it into mutual funds but with my luck the stock market would crash and we would lose our money. The stock market is on such a roll right know, it just can't last--can it? Anybody got any suggestions? I know this question has been asked a zillion times before. Sorry!

Anne

-- Anne in TN (imnot@work.com), January 20, 2000

Answers

1)Pay off personal debts.

2)Buy a home if you don't have one. I'm sure you can find something you can afford.

3) Come up with a small/or large plan to help the poor in someway for form.

4) Diversify, remember Moses in the good book, land, cattle and gold.

5) I don't mean for you to buy gold but, note the diversification.

6) Invest in short term money market funds.

7) If you have a home then check into cutting costs by purchasing a small car to save fuel costs, or buy a energy efficient furnace.

8) Take a chance and invest in your local economy.

Good luck justthinkin

-- justthinkin com (justthinkin@money.com), January 20, 2000.

You should be buying supplies with the money you have. They will have the best chance of retaining their value when TSHTF.

-- (tod_berg@hotmail.com), January 20, 2000.

justthinkin,

Thank you so much for your quick answers. I have some questions about them:

Why sould we buy a house? We have been here 10 years and rent is cheap.

What is a money market fund? Is it a colorful way to mean stock market?

How would we invest in our local economy? Do you mean buy stuff locally? We already do that.

-- Anne in TN (imnot@work.com), January 20, 2000.

You could give it to me and I'll look after it for you, if you like.

-- lolly (a@b.c), January 20, 2000.

Anne,

There are two reasons to buy a house: 1. You expect house values to increase over time. This worked well in the stagflation of the 1970s. 2. You get the federal mortgage interest deduction if you borrow money to pay for the house. Its value depends upon your tax bracket.

A money market fund is actually a fancy name for a savings/checking account. You can sometimes write checks on them, but they tend to invest in bonds with very short term maturities.

-- nothere nothere (notherethere@hotmail.com), January 20, 2000.

Ann....there are other things that are much safer than stocks. T Bills and T bonds (treasurery bills and bonds) and also you can go to any broker and see what bonds they have in inventory. I found some today that were paying 8.5%. And if you get municipal bonds you probably wouldn't have to pay any tax. Go talk with a major brokerage house and explain your needs. Then go home and think it over before you make any decisions. Taz

-- Taz (Tassi123@aol.com), January 20, 2000.

Don't lock your money into CDs for five years. Don't put it in the stock market right now as it's so high and going to deflate--at some point.

-- Mara (MaraWayne@aol.com), January 20, 2000.

$1600/mo is a strong saving program. Good for you. After you talk to the investment broker, take Taz's advise. Go home and think about it.

So you are paying low rent. Stay there, if you are happy, but I would suggest buying raw land. If I lived in east tenn, I would buy the whole knob! They Don't make any more of those.

Tommy

-- Tommy Rogers (Been there@Just a Thought.com), January 20, 2000.

Pay of your Debts,make no new Debts,hang on to it.Buy Treasuries,dont give it to the Poor,thats subsidizing the Rich,that steal it from the Poor.

-- H H N (flohans@jobies.com), January 20, 2000.

Anne: You have lots of good advice here. I wrote you a poem: summary: park it safe while you decide. Good Luck! - Heckie

Anne, some say bonds, some say land Choose CDs or Money Market, or give the poor a hand No one said futures, no one said Gold One problem is: you haven't told

What your risk comfort is, your timeline too When you know those, you narrow the view. Hold for the short term? Invest for the long? Each person makes decisions, it's the same old song: Where should I put it; and, what if I'm wrong?

Free advice is worth just what you pay But I'm going to offer you that chance today. Go to the grocery store, buy those mags honey, You know the ones: Kiplingers, Forbes and, yes, Money! Read them once over, they say different things, But after a while, a pattern they bring: which is: Stick to the basics, play safe for short term Watch out for inflation, or money will burn If you go for the quick bucks, your luck can turn.

The middle is better, but where in the middle? For now, park it safe, then take time to fiddle

with No-loads and CDs and Coins and wild flings Junk bonds, T-Bills, coins, and much wilder things

But somewhere inside there, take time to enjoy the present tense, Your husband, your daughter, your boy.

My ditty is ended, don't know why I started My final advice: A fool and his money is soon parted.

-- Heckie (hlujan45@aol.com), January 21, 2000.

My wife and I were in a similar position. We were saving 2k+ a month. We were also renting from a real jerk.

We decided that it was better to rent from the govt as it were, than rent from a landlord. We came to this decision after realizing that if we were paying $700 a month to rent, that after 10 years, we'd have wasted $84,000 that could have been put into a house.

Sure, a fair bit of that money would have gone for interest, but still...

Also, we wanted to become as self-sufficient as we could (gardening, solar setup, etc), and you can't do these things when you rent typically. Unless it's way out in the country, and you have a really laid back landlord, which I bet is rare as heck.

Before we became aware of Y2k, we had a fair chunk of money in money markets (started at 5.5% and went down to 4.5% with time). Also had some short term CDs. We wanted liquidity for our money, and we don't trust the stock market all that much.

We will eventually probably have to invest in the stock market because we want higher yields so we can someday retire.

However, I believe that for us, investing in the material goods first was the best option. We are well prepared for most natural disasters, and hard times, by and large. All the money we invest after that is a bonus, really.

Good luck.

-- Bill (billclo@blazenet.net), January 21, 2000.

---"brought it all home"---

This sounds like you have a whole lotta CASH in the house? While you consider what to spend it on, with all the helpful comments already given, I strongly suggest you protect yourself against loss if you haven't done this already.

Invest in a small fire safe that you can buy at your local Kmart/ Walmart/ better yet support your local small hardware store. The basic small fire safe costs 25 or 30 dollars; typically grey color and made of plastic with insulation inside; it has a single attachment point in the bottom so you can screw it into a basement concrete floor (without compromising fire integrity), then cover it with some dusty boxes of junk for "hide in plain sight" theft protection.

These cheapo safes are really for fire protection, not so much for strong theft protection. If the house burns down you can pull this box from the ashes and you have a nest-egg to survive with. Also put your important papers in there! Passport, birth certificates, etc.

The smallest size fire safe at Kmart will easily hold more than $25,000 in bundles of tens and twenties. Don't ask how I know this. Larger sizes are available at the Kmart for minimal increased cost.

Good luck with your money decision. I support the idea of getting more tangibles (food, extra clothes, firearms and proper training, etc.) plus maybe that dental work you have been putting off, plus a bit of cash reserve just in case.

--Andre in southcentral Pennsylvania

-- Andre Weltman (aweltman@health.state.pa.us), January 21, 2000.

I sure appreciate all these wonderful suggestions I have gotten. Thank you everybody for taking the time out to write. Ane Heckie, that was quite a poem! Wow, how creative! Maybe I'll let you know what we finally decide to do.

Anne

-- Anne in TN (imnot@work.com), January 21, 2000.