Freezing in NH

I wish it was my problem.  I’m referring to an “Ask The Expert” article at CNNMoney.  Inflation and such will really eat up your cash in the long term.  For a long-term goal like retirement, you need to be earning more than money market rates.  Obviously with higher returns comes higher risk, so for money you’ll need in the short term, you should stay out of the stock market. 

But what is short term?  1 year?  3?  And what about medium-term goals?  Right now I have a house that I’m renovating and hoping to sell when finished.  I’ve got some cash hanging around that’s earmarked for repairs, plus my emergency fund.  For a while I was keeping that money in the money market account at my bank so I’d have fast access to it.  But eventually it occured to me that I really didn’t need to have my whole emergency fund available 24/7.  I could stash most of it somewhere like HSBC Direct, where it might take 5 business days to get ahold of it.  If you’re holding six months of emergency funds, you really can put five of them into something slightly less easy to get at, like a CD or an online bank. 

 Currently HSBC is doing a new money promotion where new cash gets 6% interest through the end of April.  It’s a great time to open an account and start getting more than 0.75% on your cash!

This entry was posted on Sunday, February 25th, 2007 at 12:24 pm and is filed under articles, saving. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.