Tempting Cash Rebate offers

Discussion of the Cash portion of the Permanent Portfolio

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welderwannabe
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Re: Tempting Cash Rebate offers

Post by welderwannabe » Sat Nov 26, 2022 4:49 pm

vnatale wrote:
Sat Nov 26, 2022 7:53 am
After someone above pointed out the actual return on an annualized basis I am no longer interested in the offer that I used to start this topic.
Math that was done was based on the worst return. I don't know who would put $300K in there to get that bonus with the other options available.

$1,000 on $75,000 is a pretty good deal. Gotta keep the money in there for 90 says it looks like. Well 20 days to put the money in, then 60 days to keep it here, so I rounded up to 90.

That works out to a 5.4% annualized return. I wouldnt move heaven and earth to get it, but thats not bad. Unfortunately seem to have to dump it in a 0% checking account so that all U get.

Ally's deal was better. They gave you $500 on $50,000, kept in there 60 days, but you could put it in a savings account already earning 3% so it works out to about 9% annualized. Thats the one im doing now. Unfortunately the entry period expired on 11/15.
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Re: Tempting Cash Rebate offers

Post by jhogue » Sun Nov 27, 2022 8:31 am

It is a simple fact; yet STILL too often ignored by investors: No debt instrument is safer or more liquid than a Treasury-backed security.

To get a higher yield you have to accept more risk. And anybody who is eager to leave their cash with Citibank would do well to first read up on its history in the stock market crash of 1929 (ever heard of Charlie Mitchell?) and, more recently, the financial crisis of 2007-2009 that forced a re-structuring of the "too big to fail" US banks like Citibank. It was the US Treasury that bailed out Citibank-- not the other way around.

That's why Harry Browne had the wisdom to specify Treasury-backed securities only for Cash in the Permanent Portfolio. Anything less might not be as permanent.
Last edited by jhogue on Sun Nov 27, 2022 8:37 am, edited 1 time in total.
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Re: Tempting Cash Rebate offers

Post by mathjak107 » Sun Nov 27, 2022 8:36 am

So far I have had my money market fail .

Also fidelity has their own team of hackers that search the dark web for anything pertaining to fidelity accounts .

They found my wife’s info up there so they immediately locked the account . The crazy thing is she never logs in .

I didn’t have access to our treasuries for about two weeks as we had to show evidence the computer was professionally scrubbed for malware and then they started to issue new accounts , cards and checks .

Since it happened late on a Friday the process didn’t even start until the following week .

So luckily we had a chase account we use with all we needed in the interim.

Nothing is 100% but risks are still so low with banks , brokerages and money markets that I don’t worry about these massive failures.

Like everything else we can dream up in our heads , little is actually going to be a problem
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Re: Tempting Cash Rebate offers

Post by jhogue » Sun Nov 27, 2022 8:56 am

I am sorry to hear of your run-in with internet bank robbers of the early 21st century variety, mathjak. I am glad to hear, however, that Fidelity is working on it.

Aside from vigilance, diversification is the only answer to this sort of problem.

That is why I keep I bonds at both in my TreasuryDirect account and paper I bonds in my local bank safe deposit box.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: Tempting Cash Rebate offers

Post by welderwannabe » Sun Nov 27, 2022 9:51 am

jhogue wrote:
Sun Nov 27, 2022 8:31 am
To get a higher yield you have to accept more risk. And anybody who is eager to leave their cash with Citibank would do well to first read up on its history in the stock market crash of 1929 (ever heard of Charlie Mitchell?) and, more recently, the financial crisis of 2007-2009 that forced a re-structuring of the "too big to fail" US banks like Citibank. It was the US Treasury that bailed out Citibank-- not the other way around.

That's why Harry Browne had the wisdom to specify Treasury-backed securities only for Cash in the Permanent Portfolio. Anything less might not be as permanent.
No one has been able to show me any evidence of a FDIC insured bank failure where depositors didnt have access to insured deposits within 48 hours. All of the examples are from non FDIC insured banks or from a time before FDIC.

The whole 'FDIC could fail and congress wouldn't help' argument is just too thin for me with our modern government that has backstopped money markets based on commercial paper (March 2020), stopped student loan payments and continue to extend it, suspended rent evictions. A real populist government. There is a 0% chance the congress wouldn't ensure the FDIC has the resources it needs to handle any and all bank failures up to the FDIC insurance limits. The fact that the Treasury stepped in to help Citibank and others in 2008/2009 just makes my point.

When and if the winds change I will reevaluate, but for now if someone wants to offer me $500 on $50,000 for a 3 month deposit plus normal interest, and the FDIC insures it, i'm all in.


I fully respect all of you PP purists that are following HB's guidance to the letter, but I will continue to keep up to the first $250K in cash in FDIC insured banks if it makes more financial sense to do so based on interest rates and deposit bonuses.
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Re: Tempting Cash Rebate offers

Post by mathjak107 » Sun Nov 27, 2022 9:56 am

I would agree
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Re: Tempting Cash Rebate offers

Post by mathjak107 » Sun Nov 27, 2022 10:16 am

I would argue a power grid hack or weather taking out internet access is a bigger worry then the bank going belly up .

We had it happen twice here in nyc .

Once on 9/11 when major communication lines were destroyed and then again in sandy where power and communication lines were down
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Re: Tempting Cash Rebate offers

Post by boglerdude » Sun Nov 27, 2022 11:38 pm

A Carrington Event. Social credit scores and your accounts getting locked for donating to libertarians, as happened in Canada. Both of these threats I feel stupid for not knowing about before March 2020.

Vanguard's sweep/default account VMFXX is at 3.67%

And they'e launching a new cash account https://www.doctorofcredit.com/vanguard ... s-3-5-apy/
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Re: Tempting Cash Rebate offers

Post by vnatale » Mon Nov 28, 2022 3:55 am

boglerdude wrote:
Sun Nov 27, 2022 11:38 pm

A Carrington Event. Social credit scores and your accounts getting locked for donating to libertarians, as happened in Canada. Both of these threats I feel stupid for not knowing about before March 2020.

Vanguard's sweep/default account VMFXX is at 3.67%

And they'e launching a new cash account https://www.doctorofcredit.com/vanguard ... s-3-5-apy/


Had never prior heard of the Carrington Event! Scary! Four to ten years for the country to fully recover from it??!!

https://www.itpro.co.uk/business-strate ... ened-today

I had been in VMFXX until March 2020 when I converted all those accounts to the Treasury money market account.

Regarding Vanguard's latest cash account? Don't see what is it composition of investments.
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Re: Tempting Cash Rebate offers

Post by whatchamacallit » Mon Nov 28, 2022 11:29 am

After seeing rate was better for lower amounts, I contemplated the $500 for $30k offer but still don't think it is worth it.

After state tax, rate would be more like 5.1

1 year Treasury is 4.75

So all the trouble to earn an extra .35 %

$100 maybe?
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Re: Tempting Cash Rebate offers

Post by welderwannabe » Mon Nov 28, 2022 1:34 pm

whatchamacallit wrote:
Mon Nov 28, 2022 11:29 am
After seeing rate was better for lower amounts, I contemplated the $500 for $30k offer but still don't think it is worth it.

After state tax, rate would be more like 5.1

1 year Treasury is 4.75

So all the trouble to earn an extra .35 %

$100 maybe?
500 on 30,000, assuming you keep it in there 90 days, is about 6.7% annualized before state taxes. Unless my math is wrong, youve gotta have some obscene state taxes to drag that down to 5.1%. You also shouldnt compare that to a 52 week bill, its got more interest rate risk than this 90 day requiremen. Its more appropriate to compare it to a 13 week bill, which is paying 4.3% right now. Lots more interest rate risk with the 52 week bill too.

Agree the deal would be far better if they let you put it in a savings account that earned decent interest as well, so you could double dip, like Ally's deal did.

I'd probably shop around for a better deal.
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Re: Tempting Cash Rebate offers

Post by whatchamacallit » Mon Nov 28, 2022 3:20 pm

You are right. I was mixing up the 30k and 70k bonuses.

Long story short is you are not getting that full bonus when you look at opportunity cost of moving from Treasury to citi

So maybe you get $300 of that $500 bonus if you are lucky.

Would be much more attractive if Treasury wasn't already paying so well.
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