# If You Had To Sell Your Stocks & Bonds Immediatley How Would You Disperse The Money?



## fmdog44 (Jul 6, 2019)

Given a substantial amount in the markets and suddenly you had to sell all knowing the FDIC guarantees only 250K per customer are set up to move your money if you had to?


----------



## RadishRose (Jul 6, 2019)

What stocks and bonds?


----------



## Ruth n Jersey (Jul 6, 2019)

I don't have any stocks or bonds but if I did I'd probably put as much into the CD's that would be insured,the rest maybe in a money market or savings account.


----------



## Lethe200 (Jul 6, 2019)

I'm confused by your question. I hope I'm not misunderstanding what you're asking, but here goes:

First, the FDIC does NOT insure stocks OR bonds. *No one does. *They both have their own risk factors, and that is what you evaluate when deciding how much and when to invest. You accept a certain amount of risk on investing, based on what you _hope _to receive back in profit. 

Now if you are talking about the SIPC, that is an *entirely different guarantee. *It is designed to protect against *brokerage fraud*, where the SEC closes down a firm for breaking regulatory law, and liquidates or sells the assets. It does *not *protect you if you are losing $$$$ in the market, *under any circumstances.*

From the SIPC website:
"....SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins.

SIPC does not protect against the decline in value of your securities. SIPC does not protect individuals who are sold worthless stocks and other securities. SIPC does not protect claims against a broker for bad investment advice, or for recommending inappropriate investments.

It is important to recognize that SIPC protection is not the same as protection for your cash at a Federal Deposit Insurance Corporation (FDIC) insured banking institution because *SIPC does not protect the value of any security*.  " (emphasis mine)

I hope this makes sense, and clears up any confusion.

To answer the OP, if I were to liquidate our entire portfolio, it would be a pain in the a$$ to find multiple banks to deposit the cash into. There is also the consideration that half our portfolio is in a non-taxable account, e.g., an IRA. _Liquidating would create a massive income tax bill at the very highest rate,_ which I believe is still 47%. In addition, our Medicare premiums would also jump to the highest level, quadrupling our healthcare costs.

I cannot envision any circumstances where it would be worthwhile for us to incur such heavy additional, and unnecessary, costs.


----------



## mathjak107 (Jul 6, 2019)

I think I know what you are asking ....I would use a us treasury money market at fidelity ...... I never care about fdic since I don’t use banks for much ...... but when I have lots of cash at times I use a fidelity treasury money market since they are state tax free


----------



## Trade (Jul 6, 2019)

Got no stocks or bonds.


----------



## raybar (Jul 6, 2019)

Why would you HAVE TO sell everything if you didn't have an immediate and unavoidable need for the money?


----------



## wvnewbie (Jul 6, 2019)

Lots & lots of lottery tickets!  High Risk = High Returns!  Save a little for a mask & firearm to begin a new career of robbing banks...<g>...


----------



## mathjak107 (Jul 7, 2019)

"Lots & lots of lottery tickets! High Risk = High Returns! Save a little for a mask & firearm to begin a new career of robbing banks...<g>... "

have no clue what this post has to do with the question ?


----------



## Liberty (Jul 7, 2019)

You could check with your bank.  You can have multiple large CD's that are guaranteed by FDIC...use different names, i.e., and/or  a business account, and personal accounts.


----------



## Lara (Jul 7, 2019)

I would do the same as Liberty but I would also throw some real estate into the mix because I have a knack for investing in real estate...or at least I used to.


----------



## fmdog44 (Jul 7, 2019)

Liberty said:


> You could check with your bank.  You can have multiple large CD's that are guaranteed by FDIC...use different names, i.e., and/or  a business account, and personal accounts.


They all would tie in to your SS#.


----------



## fmdog44 (Jul 7, 2019)

Ruth n Jersey said:


> I don't have any stocks or bonds but if I did I'd probably put as much into the CD's that would be insured,the rest maybe in a money market or savings account.


But the amount that would be insured is limited to 250K so that would not work. If there was a market crash you could lose it all by the time the red tape required to open such accounts would be satisfied.


----------



## Liberty (Jul 7, 2019)

Our bank has it spelled out for the multiple high CD users.  The issue is being FDIC insured, not paying the tax on whatever you have.  Which brings up a good point - be sure of tax implications!  

Agree with Lara about real estate investments.  The most money that's made is investing in undeveloped land and selling it for development in rapid growth areas but be careful...lol. Know folks that have lost money on REIT's, too.


----------



## mathjak107 (Jul 7, 2019)

Treasury money markets are safer then banks ......fdic insurance can be underfunded , the treasury cannot be


----------



## Liberty (Jul 7, 2019)

https://www.fdic.gov/consumers/consumer/information/fdiciorn.html


----------



## Liberty (Jul 7, 2019)

https://www.fdic.gov/consumers/consumer/information/fdiciorn.html


----------



## OneEyedDiva (Jul 7, 2019)

L200 is right. FDIC does not insure investments in the stock market. I have a significant amount in "cash" for an emergency fund so as not to have to sell my investments when I need a lot of money. Been there, done that and I learned my lesson. The only thing I can think of that would necessitate me taking distributions from all my investments would be an extended nursing home stay...but even then, all wouldn't have to be taken out at once and maybe I still wouldn't need all of it.


----------



## mathjak107 (Jul 7, 2019)

The op was not worried about insuring investments ... his concern was if he liquidated 7 figures worth what could he easily do with the money where it would not be at risk...the answer is put it in treasuries or use a treasury money market fund ...all brokerages pretty much have them


----------



## Seeker (Jul 7, 2019)

My husband handles our stocks I don' t even act like I got a clue..

All I know is they are doing pretty good right now......

That's all I want to know.


----------



## mathjak107 (Jul 7, 2019)

You could be making a big mistake....my wife once felt the same .....that was until she became a widow before I met her .....she had a mess of investments dropped in her lap , no clue  and went to the guy at her local bank she trusted .... he lost half her savings in dot com and tech ..

Today she is a changed woman ...she wants to understand everything I do and in fact I never make a change without running it by her first ....it is so important for women to learn ..

While 80% of all married men die married , 80% of all married women die alone .


Let that sink in ,,I can’t emphasis it anymore


----------



## Seeker (Jul 7, 2019)

mathjak107 said:


> You could be making a big mistake....my wife once felt the same .....that was until she became a widow before I met her .....she had a mess of investments dropped in her lap , no clue  and went to the guy at her local bank she trusted .... he lost half her savings in dot com and tech ..
> 
> Today she is a changed woman ...she wants to understand everything I do and in fact I never make a change without running it by her first ....it is so important for women to learn ..
> 
> ...




I do know I am the beneficiary..if it gets to that point I'm sure I will figure it out, if not I'll have to hire a lawyer I suppose.


----------



## mathjak107 (Jul 7, 2019)

A lawyer is not who you use for investments

Best of luck if it comes to it ....


----------



## Seeker (Jul 7, 2019)

mathjak107 said:


> A lawyer is not who you use for investments
> 
> Best of luck if it comes to it ....



Thanks..duly noted...


----------



## jujube (Jul 7, 2019)

Let's see...….half of it would go in the bank and the other $5 would go under the mattress......


----------



## fmdog44 (Jul 7, 2019)

Lethe200 said:


> I'm confused by your question. I hope I'm not misunderstanding what you're asking, but here goes:
> 
> First, the FDIC does NOT insure stocks OR bonds. *No one does. *They both have their own risk factors, and that is what you evaluate when deciding how much and when to invest. You accept a certain amount of risk on investing, based on what you _hope _to receive back in profit.
> 
> ...


You missed my question by  country mile.


----------



## fmdog44 (Jul 7, 2019)

What if the market crashes similar to the last crisis a few years back when we roughly missed a greater depression than the one in 1929? You decide to sell off 100% of your portfolio. You dump it in banks for insurance but they only insure 250K and you have only one bank set up to make deposits that are insured. What do you do? If you would have put the minimum in many banks savings accounts you could send your money to those insured banks until the storm blows over then go back in to the market. You would not do this if you were young but can the elderly _afford_ to lose  50% of their portfolios? Keep in mind it will take many years before you could get back to where your were in stocks & bonds.


----------



## Aunt Bea (Jul 8, 2019)

I suppose it would depend on why I felt the need to sell everything.

If it's because of paranoia over the collapse of the financial markets I would say that diversification would be the safest way to calm your nerves. Spread the money over various asset classes with the idea that some markets may fail while other markets may thrive and continue to rebalance over time.

If the desire/need is to keep it all in cash I would open accounts in several financial institutions, another form of diversification, with the idea that one or two banks may fail while others will survive.  If all the banks fail cash will be worthless and we'll all have more urgent things on our mind.

Good luck!


----------



## mathjak107 (Jul 8, 2019)

There is a lot of reality missing from your scenario ..... first of all even at 65 you have money that you won’t eat with for more than 25-30 years ...that is still very long term money and should be the money in equities ...even a 50/50 mix has more than a decade worth of bond money so this fear is really unfounded ......so if anything this would be a bad investor behavior scenario or poor planning scenario not a stock market issue ...50/50 has never ever lost a penny over any 10 or 20 year period  ever .....so this scenario really has no actual basis financially to even be a financial issue anymore then not going out of the house because you can get hit by a car , or not driving or flying because accidents happen  would make sense .

We have had 119 30 year retirement cycles to date ... 90% of them at a 4% withdrawal rate had you end with more than you even started with ..that is through crashes , wars ,the Great Depression,the Great Recession and every negative you can think of ....to put it in perspective you stand the same 10% chance of a 4% draw failing as your portfolio ending with 6x what you started ....

FDIC could be a problem and a delay getting paid in a massive bank failure ,,, treasuries are never a problem.just keep long term money long term money and intermediate and short term money in appropriate investments and this would likely negate this whole scenario.

Even the Great Depression had you whole again in dollar terms in just 4-1/2 years


----------



## Liberty (Jul 8, 2019)

fmdog44...thought that was what you were asking yesterday.  I'd talk to my banker.  We have a great local bank that we've dealt with for years.
The bank is very well funded and I don't want to go into details but there are legal and insured ways to sleep great at night financially.  We've been in and out of the market, owned 3 businesses, etc.,  and my husband will not invest in stocks or bonds and he is a WSOP poker player...has split big money pots and pays 10 grand to enter some tournaments.  So, with that said, we're a bit creative about investing.  Talking to your banker can help you envision what would resonate with you as far as stewardship of your money.  You normally always learn something when having a sit down with a local well funded banker.


----------



## mathjak107 (Jul 8, 2019)

Oh yeah ,, mostly what you learn from a banker is all about the high fee ,high commission products they offer ....


----------



## Liberty (Jul 8, 2019)

Wow, your bankers must be way different than our bankers...lol.  Our bankers are morelike "Dutch uncles"...rarely do they try to sell you something.

Now stock brokers or money managers are a way different story, talk about selling hard and fast.


----------



## Uptosnuff (Jul 8, 2019)

I wouldn't trust a banker to give me a good recipe for chocolate chip cookies.  Somehow or other you would wind up paying through the nose for it.  They are in the business of money; making it, managing it, fleecing others out of theirs.  They are probably the last people I would ask.


----------



## mathjak107 (Jul 8, 2019)

Banks love selling annuity products....


----------



## Liberty (Jul 8, 2019)

So don't ask them already...lol.  By the way, I do know a local one who makes great chocolate chip cookies.


----------



## Liberty (Jul 8, 2019)

If you don't like bankers, who would you recommend to ask for "impersonal" financial  advice?  Our hometown bankers have never tried to push annuities or anything else.  Of course, we could be the exception to the rule where banking is concerned.

So who would you recommend?


----------



## mathjak107 (Jul 8, 2019)

There is no such thing as impersonal financial advice .... advice has to be for you and your personal situation  to be worth anything ... it should be from a skilled financial adviser..if you think paying for good advice is expensive wait until you see what free costs


----------



## Aunt Bea (Jul 8, 2019)

No matter who you go to for financial advice you need to understand and verify every word before entrusting your money to them.

The only person that cares about my success or failure in the financial world is me so I try to educate/protect myself and make my own decisions.  IMO relying on someone else to handle my financial affairs is just an expensive way to transfer blame when things don't work out.

I learned slowly as I saved, by the time I had saved a thousand dollars I knew how to invest a thousand dollars and so it went as my savings and investments increased over the years.


----------



## mathjak107 (Jul 8, 2019)

Way to go aunt bea


----------



## Liberty (Jul 8, 2019)

Yep, aunt Bea is cool.  Nice to have good advice but nicer to use your own mind.  The wise man is the one that knows his own self.

Glad to have good friends, too!  That's a bonus.


----------



## Uptosnuff (Jul 8, 2019)

Liberty said:


> So don't ask them already...lol.  By the way, I do know a local one who makes great chocolate chip cookies.


Yes, but will they give you the recipe?  For free?


----------



## Liberty (Jul 8, 2019)

Yep...do you want it? Its an award winner.  Can vouch for that.  Its called "Hall of Famer".  Long story.
Its not fair because we do have good friends in this town and have lived here for many years.  They can't charge the garden club 
for anything...lol.  It would be called "payback".


----------



## mathjak107 (Jul 9, 2019)

Aunt Bea said:


> No matter who you go to for financial advice you need to understand and verify every word before entrusting your money to them.
> 
> The only person that cares about my success or failure in the financial world is me so I try to educate/protect myself and make my own decisions.  IMO relying on someone else to handle my financial affairs is just an expensive way to transfer blame when things don't work out.
> 
> I learned slowly as I saved, by the time I had saved a thousand dollars I knew how to invest a thousand dollars and so it went as my savings and investments increased over the years.


In the financial world you are not a client you are a customer......they make their living off you in one way or another


----------



## mathjak107 (Jul 9, 2019)

Uptosnuff said:


> I wouldn't trust a banker to give me a good recipe for chocolate chip cookies.  Somehow or other you would wind up paying through the nose for it.  They are in the business of money; making it, managing it, fleecing others out of theirs.  They are probably the last people I would ask.


We went to out local bank to renew a cd when rates were very very low...our person at the bank told us they had a much  better deal for us and handed us off to the financial guy .

I got to tell you , the product turned out to be a a variable annuity .it offered a 10% guaranteed growth rate for 10 years regardless of whatever markets do ....

It sounded so great that if I did not know how to look under the hood and analyze these things I would have jumped at it.
It had high fees , commissions and a structure that made your hair hurt trying to figure out.....in the end  you actually saw a fraction of that 10% growth rate the way the product manipulated a phantom account and your actual account


----------



## Lethe200 (Jul 11, 2019)

fmdog44 said:


> You missed my question by  country mile.


That's fine. As I said, your original question was not very clear to me.


----------



## Colli❤️ (Nov 24, 2019)

I thought about that as you I do not trust any of my money  with banks and stock market is very scary. I had a fair size amount in and IRA/401(k) and called this place after reading great things and customers comments and they helped me with info regarding rolling it over into an IRA/401(k) w Precious Metals and crypto and it was effortless which was a bonus for me. I even bought myself some gold bars and platinum coins and the shipment was quick. Check them out, it is better to know you will have assets when the s hits the fan, good luck!! https://regalassets.com/request-free-gold-investment-kit?id=0


----------



## fmdog44 (Dec 6, 2019)

Liberty said:


> You could check with your bank.  You can have multiple large CD's that are guaranteed by FDIC...use different names, i.e., and/or  a business account, and personal accounts.


Keep in mind one bank can only insure you for 250K regardless of how it is distributed through savings & CDs  so if you have more you will not be insured. I opened three more banks in addition to the one I have. Some if not most only require a minimum deposit. Only two banks are offering 2.0+% right now on savings while two of my current banks have dropped their rate to 1.8% & 1.7%.


----------



## fmdog44 (Dec 6, 2019)

mathjak107 said:


> There is a lot of reality missing from your scenario ..... first of all even at 65 you have money that you won’t eat with for more than 25-30 years ...that is still very long term money and should be the money in equities ...even a 50/50 mix has more than a decade worth of bond money so this fear is really unfounded ......so if anything this would be a bad investor behavior scenario or poor planning scenario not a stock market issue ...50/50 has never ever lost a penny over any 10 or 20 year period  ever .....so this scenario really has no actual basis financially to even be a financial issue anymore then not going out of the house because you can get hit by a car , or not driving or flying because accidents happen  would make sense .
> 
> We have had 119 30 year retirement cycles to date ... 90% of them at a 4% withdrawal rate had you end with more than you even started with ..that is through crashes , wars ,the Great Depression,the Great Recession and every negative you can think of ....to put it in perspective you stand the same 10% chance of a 4% draw failing as your portfolio ending with 6x what you started ....
> 
> ...


True but you omit one's individual age versus the national average of life expectancy so age factors in to make it more of a gamble or guessing game. That is what I was getting at in my OP. Second the 4 1/2 years omits a lot of life's everyday expenses. I have never heard of anyone getting in to full recovery after just 4.5 years of losing everything - job, home, shoes & socks as some did and the last near depression is viewed as one that would have dwarfed the 29 crash.  Some money in the safe deposit box is never a bad idea.


----------



## Liberty (Dec 6, 2019)

fmdog44 said:


> Keep in mind one bank can only insure you for 250K regardless of how it is distributed through savings & CDs  so if you have more you will not be insured. I opened three more banks in addition to the one I have. Some if not most only require a minimum deposit. Only two banks are offering 2.0+% right now on savings while two of my current banks have dropped their rate to 1.8% & 1.7%.


Sorry, but we checked very carefully with our bank. Ours are  insured, in different names and they are insured totally FDIC insusred per our bank's written conformation.  You might want to check with your bank to see what options are available to you.  Of course we also have a business that is still "alive".  May shelve it, or may not.


----------



## Liberty (Dec 6, 2019)

What I would like to know is how to help an 86 yr old lady sell her stocks without encumbering  the 40% tax rate due.  She had a financial advisor, wonder why he or she didn't start dispensing the stocks earlier than now.  Of course if she leaves it for her heirs they won't have to pay anything so guess that's the only basic legal answer!


----------



## Packerjohn (Dec 6, 2019)

No stocks & no bonds for this guy.  Hack!  I spent my money travelling the world.  Why die the richest man in the graveyard ?


----------



## Knight (Dec 6, 2019)

fmdog44 said:


> Given a substantial amount in the markets and suddenly you had to sell all knowing the FDIC guarantees only 250K per customer are set up to move your money if you had to?


What do you consider a substantial amount ?  

But for us given our age my wife and me I think we'd convert all to cash then enjoy whatever time we have left doing whatever we wanted to.  Only because we have zero debt. I don't count food, utilities, taxes, transportation & insurance as debt.


----------



## Liberty (Dec 6, 2019)

Packerjohn said:


> No stocks & no bonds for this guy.  Hack!  I spent my money travelling the world.  Why die the richest man in the graveyard ?


You got it Packerjohn.  Just can't figure out why this lady didn't start taking some of this money out!  As it stands, unless someone on this 
forum has a brilliant idea, that's probably what she will do... die a rich retired nurse and leave to her kin!


----------



## Packerjohn (Dec 6, 2019)

Hey, I got a half-brother who sold the farm over 10 years ago.  He stashed over 1/4 million in the bank.  Wouldn't go out for coffee because it is too expensive; wouldn't go out for a haircut because it is too expensive.  Wouldn't even make you a cup of coffee when you visit.  Maybe it's too expensive!  LOL  Can't figure this out.  Too many people deny themselves the pleasure of life is that they can leave some sort of stupid legacy to family or some place else.  Me thinks there is something plenty wrong with this picture!


----------



## Liberty (Dec 6, 2019)

Packerjohn said:


> Hey, I got a half-brother who sold the farm over 10 years ago.  He stashed over 1/4 million in the bank.  Wouldn't go out for coffee because it is too expensive; wouldn't go out for a haircut because it is too expensive.  Wouldn't even make you a cup of coffee when you visit.  Maybe it's too expensive!  LOL  Can't figure this out.  Too many people deny themselves the pleasure of life is that they can leave some sort of stupid legacy to family or some place else.  Me thinks there is something plenty wrong with this picture!


You are so right.  A lot of folks want to die and leave their kids with a "legacy".  Son and sig other just came and told us "want you to enjoy your money and die with 5 bucks in the bank"...lol.  Love them, but that probably won't happen.  The issue is when some people get money, they just want to keep adding to it. The market is especially susceptible to this kind of thinking...just keep looking at the "bankroll".  Don't spend it just keep adding it back in. 

Glad you've had a happy life.  Everyone is different, if it pleases you to just look at numbers on a statement sheet, pat yourself on the chest and enjoy it, more power to you, you probably think you are going to take it with you or just want to die and leave that "legacy" to your children, who so desperately need it"...lol.


----------



## Nautilus (Dec 6, 2019)

I would take an around the world cruise...or two.  Carpe Diem! Die broke.


----------



## fmdog44 (Dec 6, 2019)

Liberty said:


> Sorry, but we checked very carefully with our bank. Ours are  insured, in different names and they are insured totally FDIC insusred per our bank's written conformation.  You might want to check with your bank to see what options are available to you.  Of course we also have a business that is still "alive".  May shelve it, or may not.


I have one name, mine.


----------



## Packerjohn (Dec 7, 2019)

I have learned something in my life.  When you are young & getting married you need a lot of "stuff":  car, house, furniture, appliances, raising kids, etc.  When you get to my age you need very little (actually, food, clothing & shelter & I seldom buy clothing).  It's silly to gamble & dream of winning millions.  At our age you can only eat & drink so much or you will get sick.  You can travel if you want to because that can cost a lot of money.  Those silly retirement "experts" who tell you that you need 1.5 million dollars or whatever to retire are full of hot beans.  They don't know how long you might live & they don't know what lifestyle you might like.  You slave like mad & then you wonder what the hack you can do with all that money in the bank.  Give it all to kids!  Sad situation.


----------



## Liberty (Dec 7, 2019)

Packerjohn said:


> I have learned something in my life.  When you are young & getting married you need a lot of "stuff":  car, house, furniture, appliances, raising kids, etc.  When you get to my age you need very little (actually, food, clothing & shelter & I seldom buy clothing).  It's silly to gamble & dream of winning millions.  At our age you can only eat & drink so much or you will get sick.  You can travel if you want to because that can cost a lot of money.  Those silly retirement "experts" who tell you that you need 1.5 million dollars or whatever to retire are full of hot beans.  They don't know how long you might live & they don't know what lifestyle you might like.  You slave like mad & then you wonder what the hack you can do with all that money in the bank.  Give it all to kids!  Sad situation.


Think that figure mentioned takes the averages in...if you live in a high cost area like NYC or California, then naturally you would need more.  It also includes health costs.  Of course you are right, areas  and lifestyles certainly vary and I sometimes wonder how our parents did it and could afford to did without having that big nest egg!


----------



## Packerjohn (Dec 7, 2019)

Life sure is different for us than for our parents:  more pollution, more stress, more people, more crime, more technology, more of everything.  Far as the money goes, well, enjoy it (if you have any) while you are still breathing.  After you stop breathing, you will not need it.  Remember, you really can't take it with you.  LOL


----------



## Liberty (Dec 7, 2019)

Packerjohn said:


> Life sure is different for us than for our parents:  more pollution, more stress, more people, more crime, more technology, more of everything.  Far as the money goes, well, enjoy it (if you have any) while you are still breathing.  After you stop breathing, you will not need it.  Remember, you really can't take it with you.  LOL


Yeah, love that show "Strange Inheritances"...she ends each show with "remember, you can't take it with you"!


----------

