Certificate of deposit ?

[CHCRandy]

Andsince you opened the door, what exactly is Warren Buffet's opinion of those dividend stocks you love so much? I assume you don't hold shares of Berkshire Hathaway (A or B).

"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a fly epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497"...... He owns stock in 44 companies, and 34 pay dividends. His largest holdings are dividend stocks. That tells me he likes them.

 

[JettaKnight]

"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a fly epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497"...... He owns stock in 44 companies, and 34 pay dividends. His largest holdings are dividend stocks. That tells me he likes them.

Huh, I guess I'm all washed up on that. So why doesn't the Sage of Omaha give them out?

 

[CHCRandy]

Huh, I guess I'm all washed up on that. So why doesn't the Sage of Omaha give them out?

I am sure you already know and are messing with me..... but he says he would rather use profits to acquire a nest egg that can be used to buy more equity in top companies or buy back shares, than to return to investors and not continue to grow the cash making machine. BRK shareholders are still getting a dividend....it is just in the form of investments that grow the share price in BRK. They know if they take a cash dividend....it is just that much less Buffet has to use to make them more $. The guy is a genius...he uses others money to buy stocks that pay HIM dividends which he then reinvests to make himself and others more money by increasing stock value. His top 5 holdings make $3 billion a year in dividend income, and that's not counting the other 29 that pay dividends, that's easy money for him.

 

[rhinoabe]

My mom is 76yo with onsets of dementia she has a bucket list. she has enough income to satisfy her monthly bills. She will not use a debit card or write checks. If it wasn't for her cd's. she would not be required to file taxes based on her income. also the bank will not know what I put in the safe deposit box.

 

[Indysioux]

It's been tough to find anything that pays decent interest. Instead of CD's, I've been using an online Money Market / Savings account, Discover Bank. Currently its paying 0.95%, which is not great. It's tied to my checking account, so I can easily transfer money back and forth. Another decent choice is Synchrony Bank, which used to be GE Capital. All signs point to the Fed raising interest rates this month, so hopefully Discover will increase their rates.

Disclaimer - I tried to convince the Mrs. that investing in firearms was the way to go, but she didn't go for it

 

[JettaKnight]

I am sure you already know and are messing with me..... but he says he would rather use profits to acquire a nest egg that can be used to buy more equity in top companies or buy back shares, than to return to investors and not continue to grow the cash making machine. BRK shareholders are still getting a dividend....it is just in the form of investments that grow the share price in BRK. They know if they take a cash dividend....it is just that much less Buffet has to use to make them more $. The guy is a genius...he uses others money to buy stocks that pay HIM dividends which he then reinvests to make himself and others more money by increasing stock value. His top 5 holdings make $3 billion a year in dividend income, and that's not counting the other 29 that pay dividends, that's easy money for him.

Partially messing...

However, I not so sure about the value of dividend stocks. They look super good because, well they pay out cash regularly. But, then you've got cash that you either have to accumulate and reinvest on your own - adding brokerage fees*, or invest in some specific DRIP. And if you're doing this is a taxable account, you have to pay taxes (albeit at a lower rate).


I really need to see some long term research on it. Nevertheless, I used to invest in high yield ETF's, but it really didn't pan out well, so I moved on.


Regardless, we're veering from from the OP's question.

* Good news for some of us, TDAmeritrade is finally lowering their commissions.

 

[rhinoabe]

Mom will not invest, Her father lost his but in the great stock market crash and they lived dirt poor. I also don't want her to be able to have easy access to her funds, she was swindled out of few dollars on a home improvement scam that she paid cash for.

 

[JettaKnight]

My mom is 76yo with onsets of dementia she has a bucket list. she has enough income to satisfy her monthly bills. She will not use a debit card or write checks. If it wasn't for her cd's. she would not be required to file taxes based on her income. also the bank will not know what I put in the safe deposit box.

Feel free to answer as much or as little as you want.

OK... So, I'm guessing that she's been cashing out a large number of CD, or is her income from other sources like pensions? The CD's shouldn't change her filing threshold - $11,900 gross income. Since only the interest of those CD's go to gross income... that's a lot of CD's being cashed out or it's not the only reason you need to file a tax return. And if your penalty is to forgo any interest... I don't get it.

As to the safe deposit box, I suggest you think about that a bit more. Here's some thoughts:
1. If that money is lost, stolen, etc., then the bank or FIDC won't cover it.
2. It will lose value because of inflation.
3. There's no record of what was put in, or how much was removed, or when money is removed.
4. You'll be paying a fee to store cash.
5. You can only access a box when the bank is open...
6. ...if the bank is open, then why not just walk to the teller and say, "I'd like $XXXX withdrawn from my savings account"?*
7. If she's starting to get dementia, wouldn't you want some record?

I don't know all about your situation, it sounds... complicated. I'm not telling you what to do, but merely providing advice; FWIW, I file about 20-30 tax returns a year.


* I don't have a debit card or ATM card, I just talk to friendly tellers.

 

[PGRChaplain]

Cash out the CD's and let your Mom have the Time of her Life! If she has to go to a Nursing Home all of her assets will go for her care in a short time. Let her Enjoy Life while she can! My Mom Passed last May 12th, she was 100 years 6 months and 14 days old. She always wanted to go to Alaska, I regret not taking her.