Friday, October 03, 2008

Summer conversation with the personal banker at my bank

Last summer, not that long ago, things were chugging along normally in the economy, if there's a normal.

I was quite fortunate to receive a chunk of money. Several thousand dollars.

It was a gift that was part of an estate sale. Gifts went to a wide variety of places. I got my part as a "thank you" for years of volunteer work revolving around my web site

Anyway, it was a nice gift. Not enough to buy a house / condo. Doghouse in this market.

Still a nice gift.

What to do with it?

Personal banker suggests putting it in the stock market. That bank also manages a portfolio of mutual funds.

Stocks, that's where it grows since interest rates are so low, regular bank accounts and money market funds offer little growth even though they have the safety of FDIC.

He said, "if you want to invest in the long run, buy stock funds."

I was leery, and also not sure what my goal was.

Maybe I should spend the money, rather than save it.

How about a super vacation bike trip across USA? Take leave of absence from my job. Spend the money on something meaningful, like a bike trip. What a way to remember my deceased acquaintance.

The banker smiled and said, "That sounds like a lot of fun." "Then an FDIC account is a good place to park money for the short term, in spite of low interest." "Send me a postcard."

I parked the money, but didn't do that big trip after all. Not this year at least for various reasons. I did do some smaller trips, but the money is still saved. A nice, "rainy day fund."

Well, not long after that conversation, the stock market lost lots of money.

I'm glad I didn't invest that money in the stock market just before the crash.

Just thinking about going on a bike trip, thinking about spending, rather than investing the money, saved me quite a bit of money; ironically.

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