Monday, January 12, 2009

What would you do with $100,000?

Early last year sold equities to pay down my HELOC. At that time the interest rate was still fairly high.

The HELOC interest rate now is much lower (as are returns for deposit accounts).

I'm wondering if I should pull the cash out of the HELOC and put it into various accounts (depository, investment, etc...). The number isn't exactly $100k, but it's close enough for this kind of thinking.

Why am I thinking this way?

I've heard rumors that some banks have been freezing lines of credit in some areas - though nothing specific in Chicago. I assume the coasts were hit more heavily as the value of home equity dropped there much more severely than in the Midwest.

I need some or much of this money as emergency funds in case I lose my job. (it's not my only potential cash source, but an important one).

Also, considering that the market is quite low, maybe it's time to put some or all of it back into the market.

What would you do? I'm really chewing on this issue right now. If you pulled it out, where would you put it?

To feel more comfortable about my legal situation with the HELOC, I may ask a real estate attorney his opinion on whether the bank can freeze my HELOC. How would you confirm it?


1 comment:

Bigqueue said...

I for one am going to stay away from credit because this is the very thing that went hayire and brought things down.

But the question is.....What are interest rates going to look like....and how much am I going to be able to get on my investments?

If I look at my last 24 months.....I think my answer is negative....that is, unless I was so conservative as to just keep in in my mattress.....or in a low-interest CD.

But those would not have made the interest needed to overcome I would have lost I suppose.

And what happens to equity loan rates if we go into a period of hyperinflation....don't suppose I would be able to keep up then either.

Do what you want....I'm not a professional money person by any means....but I'm going to try and "save" and perhaps diversify my investments across other currencies as well.

Good luck to and me included!