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Comment by WalterBright | Hacker News Reader

The best thing a person can do in such a situation is to put the money in a savings account, and then set about learning what to do.

Nobody is going to have their best interests at heart but themselves. If you want to have money, you have to learn to manage it yourself. There's not really a choice about it.

Also, hire a properly licensed CPA. Make sure to listen to his advice on taxes. Don't give him a financial incentive to benefit if you follow his advice.

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If you put that kind of money in a savings account, the bank will call you twice a day until they have made you move the money into something more profitable (for them.)

Your bank will stop calling you if you threaten to move your account.

BTW, any sane business would put their best salesmen on dealing with their wealthier clients, and those salesmen will know that haranguing customers on the phone is hardly the best way to sell them.

Actually, you might be surprised at how often a soft no means yes, in business. Of course, in one's personal life, people try not to be rude, so a soft no is often really a hard no. An athlete or doctor or lawyer who is too busy to give the salesman the time of day might be really interested but simply too busy to make time for the call. A good salesman won't give up after the first soft no. It is often the case in these situations that persistence is polite.

I would be surprised if the bank complained. They are only on the hook for $250K per the FDIC and could cover it with a low interest interbank loan from the FED. Since their mandatory reserve is only a fraction of the cash on deposit they will happily leverage it for greater returns paying you your paltry .7% while collecting much more than that.

This highlights the problem-- the most "conservative" approach, a savings account, is actually TERRIBLE financial advice. First the money won't keep pace with inflation and second a bank failure will wipe out the fortune. That happened to savers in 2008, most notably the failure of IndyMac.

Of course. But you have to park the money somewhere while you learn about where to invest it.

If you've got more than $250K, I'd split it up into multiple accounts at different banks.

I suspect this is per depositor not per account... but I'm not sure.

FDIC covers $250,000 for all of a persons accounts in one bank. So you just need to have accounts in separate banks to 'increase' your coverage.

https://www.fdic.gov/deposit/covered/categories.html

It's per account and can be doubled with a "payable on death" designee.

> It's per account

I think you're mistaken about the first part of your statement:

The FDIC says, "All single accounts owned by the same person at the same bank are added together and insured up to $250,000." (see https://www.fdic.gov/deposit/covered/categories.html )

But you are correct that it can be doubled, tripled, quadrupled, or even greater by opening different account types such as a Retirement Account, a Joint Account, a Revocable Trust Account, etc., at the same bank since each account type seems to get separate treatment (according to the same FDIC link).

So- Your money not keeping pace with inflation is better than anyone profiled in the article managed. Worst case scenario, bank failure, they might still be better off.

People fall into two broad traps. Either they are loosing money for no good reason (a consumption culture with ever escalating healthcare/edu/housing prices makes this simple), or they are accumulating money for no good reason, thanks to some class they took that says beating inflation is the point of their story. Once your housing/family healthcare/edu expenses are taken care off kiddos, there is no good reason to be beating inflation. Unless you are trying to build the Taj Mahal or something.

Actually there are some very straight forward wealth management schemes that may not get you the most return on your money but are better in nearly every metric than putting your cash in a bank savings account. The canonical example is a treasury ladder.

The bank wouldn't complain but if your account is significantly above the FDIC's $250k limit, it's usually worth it for them to invest a few days or weeks of a salesperson's time to get you to convert to a more profitable investment account. That kind of human attention is just not profitable with an account that only has 10s or 100s of thousands of dollars.

A savings account without a fixed term requires that the bank balances that with reasonably short instruments. If it's a huge sum they will get nervous since they need a certain amount of liquidity as reserves and that's expensive. Keeping liquidity over the night gives very little interest, or even negative interest in some countries.

Savings accounts don't do great over the long term. The safest thing is usually just to buy real estate as long as the prices aren't stupid.

You start with “the safest thing is..” then suggest property, only if they have knowledge of what prices are reasonable.

Doesn’t sound safe. Index fund would probably be safer. Or savings account.

Do you know many people impoverished in their old age because they bought a couple of houses (assuming no mortgages)? Bank savings inflate away, stocks crash, houses are typically as safe as houses.

Houses cost property taxes, insurance, and maintenance. Those have been known to force seniors out of their homes.

The canonical problem isn’t “a couple of houses as part of a diversified portfolio”. It’s “entire net worth is effectively tied up in one house”. We saw what happened with this 10 years ago. Houses are only reasonable stores of value if there is some scarcity attached to the particular house.

property markets still collapse. Towns turn into ghost towns, it’s not bulletproof. The absolute safest thing is cash in a bank. It’s an absolutely terrible investment, and you’d be an idiot to do it, but it’s safe.

This article is from 2009, which, if you'll recall, was not a banner year for demonstrating the stability of real estate investments. Also, as detailed in the article, a big problem with real estate investments is knowing whether an investment is really worth what you are paying.

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