Re: Alternative to Money market Funds?

  "Jay" <[EMAIL PROTECTED]> wrote in message
news:[EMAIL PROTECTED]
  > I have 60% of my money sitting in Money Market Funds that is yielding
  > probably 0.75%. What is a better alternative with similar risk-return
  > characteristics. May be, a little more risk than Money Market Funds but
not
  > like the usual Equity and Bond Funds. I do not mind tying it in for 6
months
  > to a year.

  Do you own any personal life insurance?

  Many of the better companies have a Premium Deposit Fund, some of which
pay as much as 4.00% and even 5.50%, while remaining completely liquid.
State laws vary, but as an example, in my state you can pre-pay up to 20
years worth of premiums and earn current interest on this fund. When I need
money, I call the company and they send me a check. Current interest is
based on the general account returns of the company, and since the company
'expects' these funds to become premiums in the future, they credit them
with interest that just happens to be pretty good right now, comparatively
speaking. Most funds interest rates change periodically, but some guarantee
their interest rate for longer than one year.

  Some companies use a Pre-Paid Discount Pool. It allows you to pre-pay
future years premiums, with imputed taxable income in the year the discount
is applied, but doesn't really pay interest you can spend and while liquid,
probably isn't what you're looking for.

  Agents learn of these funds early in their career, but soon forget about
them, because they do not pay any commission.  I use them in my practice as
an emergency fund or savings account, becaue they are paying better than all
the alternatives I can find, with little risk.

  Brent D. Gardner, ChFC
  Chartered Financial Consultant
  http://members.cox.net/brentdgardner1378/

  "Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
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