Wednesday, June 4, 2008


Wow! As I wrote last night's post, I was expecting a ribbing from ya'll for my talking your ear off about "investment policies" and "cash management". Instead, I have received more emails with positive responses from readers in the community thanking me and asking more follow up questions on last night's blogs than almost any other post to date.....Let me just say again, "wow!" I never assumed that cash management was so cool.

Here's a little more depth on one idea. Think about why commercial paper or gov't bonds pay what they do....They are predicated on a yield curve...risk and maturity used to define rate. On the other hand, up to $100K in a bank account is relatively safe (due to FDIC/FSLIC), and many banks around the country pay rates that are a good bit higher than the implied risk. Why? Often it is because banks set their deposit rates as a business decision to "hire" money so that they can fill out the asset side of their balance sheet. For this reason, there often appear to be deals in things like the CD market. Try it out. You may find what I say is true, and 10 accounts of $100K each is safer than $1MM alone. That fact makes me sleep better at night.

Now as for the cars that I know every red-blooded LM lover dies for, here is another surprise....this just in on the community today:

Rockin! Make sure you manage your cash well enough so you can buy one of these!


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