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  #1  
Old 11-29-2010, 08:06 AM
Revtim Revtim is offline
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Where do you keep a billion dollars?

You make a company/website to help people find albino goats, Google likes it, and buys albinogoatfinder.com from you for a billion dollars.

OK, they probably give it to you in stock, but you decide to cash it out.

What is the best financial option to store this money, that is as safe or safer than a savings account? You don't care about growing the money, you feel you probably can manage to squeak by on just the initial billion.

NEED ANSWER FAST! (yeah, I wish...)
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  #2  
Old 11-29-2010, 08:11 AM
Schnitte Schnitte is offline
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I don't get the question. If the crucial criterion is simply that storing the money needs to be "as safe or safer than a savings account", then why not simply put in in a savings account?
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Old 11-29-2010, 08:14 AM
Finagle Finagle is online now
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I think the traditional answer is that you invest in bonds, possibly US Treasury bonds, and live off the interest. Of course, right now, interest rates are pretty darn low, but if you go for a long enough term, it looks like you can still clear 4%. 4% of a billion would be enough to struggle by on, I think.

Of course, you might worry about the US defaulting on its debt, but if that happens, you probably have greater worries than losing your billion. But you can always diversify to other sorts of bonds as well.
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Old 11-29-2010, 08:17 AM
Jack Batty Jack Batty is offline
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In the root cellar down near the cement pond?
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  #5  
Old 11-29-2010, 08:40 AM
UDS UDS is offline
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If you want to preserve long-term value, invest in real assets - property and/or equities. These can be volatile - especially equities - but with a billion dollars you can stand a bit of volatility. And you'll have quite enough to diversify between different companies, markets, countries, sectors . . .

In nominal cash terms, your best investment is of course cash. Keep the money in large bills in a shoe-box under the bed or, if you haven't got a big enough shoebox, deposit it in banks (spreading your money between different banks to minimise exposure to the risk of default). But cash has a lousy return; if you want respectable long-term growth and can stand a bit of volatility, real assets are your best bet.

Last edited by UDS; 11-29-2010 at 08:42 AM..
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  #6  
Old 11-29-2010, 09:02 AM
njtt njtt is offline
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I'll hold onto it for you.
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  #7  
Old 11-29-2010, 09:09 AM
Revtim Revtim is offline
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Originally Posted by Schnitte View Post
I don't get the question. If the crucial criterion is simply that storing the money needs to be "as safe or safer than a savings account", then why not simply put in in a savings account?
The FDIC only insures up to $100000, so if the back fails that's all you get back. (I should have mentioned this in the OP, sorry)

You could spread it out over different banks, but that's 10,000 banks you'd have to use.
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  #8  
Old 11-29-2010, 09:09 AM
Dewey Finn Dewey Finn is offline
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With that amount of money, there are tax issues (minimizing the amount of tax owed) and estate planning issues (to avoid the sort of mess that Howard Hughes left). So one could talk to various "wealth management" firms that would help you manage the money and structure the inheritance. Say, for instance, that you want to leave money to your grandchildren but not to your children, or you want them to achieve something prior to inheriting, so that they don't turn out to be worthless slugs. Or if you want to follow Warren Buffett's advice and use the money to accomplish some public good.
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  #9  
Old 11-29-2010, 09:10 AM
LouisB LouisB is offline
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Don't trust that other guy; I'll take care of it for you.
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  #10  
Old 11-29-2010, 09:25 AM
friedo friedo is online now
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Originally Posted by Dewey Finn View Post
With that amount of money, there are tax issues
That really depends on what you do with it. The income tax on a billion dollars worth of T-bill or mutual fund interest isn't any harder to figure out than on a sawbuck. But if you're invested in a wide variety of businesses and holding companies, then it gets more complicated.

Estate planning is of course an entirely separate issue.
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Old 11-29-2010, 09:25 AM
KneadToKnow KneadToKnow is offline
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I keep mine in my ...

Whoa, I see what you almost did there!
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  #12  
Old 11-29-2010, 09:26 AM
joebuck20 joebuck20 is offline
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Originally Posted by Revtim View Post
The FDIC only insures up to $100000, so if the back fails that's all you get back. (I should have mentioned this in the OP, sorry)

You could spread it out over different banks, but that's 10,000 banks you'd have to use.
I could be wrong, but I thought that was raised to $250K after the 2008 bailouts. In that case you'd only need 4,000 banks.

Last edited by joebuck20; 11-29-2010 at 09:27 AM..
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  #13  
Old 11-29-2010, 09:28 AM
Dewey Finn Dewey Finn is offline
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Originally Posted by friedo View Post
That really depends on what you do with it. The income tax on a billion dollars worth of T-bill or mutual fund interest isn't any harder to figure out than on a sawbuck. But if you're invested in a wide variety of businesses and holding companies, then it gets more complicated.

Estate planning is of course an entirely separate issue.
Sure it's easy to figure out the taxes on the interest income from a billion dollars. The issue is how do you minimize the tax owed. If that's your goal, then treasury bills might not be the right place to invest the money.
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  #14  
Old 11-29-2010, 09:30 AM
Revtim Revtim is offline
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Originally Posted by joebuck20 View Post
I could be wrong, but I thought that was raised to $250K after the 2008 bailouts. In that case you'd only need 4,000 banks.
Ah, I find you are right:
http://www.fdic.gov/news/news/press/2010/pr10161.html
It was a temporary raise, but now it's permanent.
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  #15  
Old 11-29-2010, 09:52 AM
Susanann Susanann is offline
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Originally Posted by Schnitte View Post
If the crucial criterion is simply that storing the money needs to be "as safe or safer than a savings account", then why not simply put in in a savings account?
Savings accounts of a $ billion dollars are not insured by the FDIC.

IF the United States defaults on its currency, then holding bonds, or any dollar denominated asset would cause you to go bankrupt.

IF the world economy goes into a Depression, then stocks would nosedive.

Gold: On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years.

A billion dollars in gold is still a pretty physical small package.

Last edited by Susanann; 11-29-2010 at 09:53 AM..
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  #16  
Old 11-29-2010, 10:05 AM
Wallenstein Wallenstein is offline
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Originally Posted by Finagle View Post

Of course, you might worry about the US defaulting on its debt, but if that happens, you probably have greater worries than losing your billion. But you can always diversify to other sorts of bonds as well.
There's an old eastern bloc joke along those lines (from when Russia still exerted influence over Poland):

Two polish men (Josef and Victor) are talking in a cafe.

Josef: I inherited my grandfather's estate and I don't know what to do with all this cash; I was always taught to be cautious with my money so I want it to be safe.
Victor: Why not invest it in the village bank?
Josef: Is that not risky in these times? What happens if the villlage bank collapses? I'd lose all my money.
Victor: You worry too much. The village bank is underwritten by the town bank... it's totally safe.
Josef: But then what happens if the town bank collapses? I'd still lose all my money.
Victor: No problem... the town bank is underwritten by the provincial bank.
Josef: But what if the provincial bank collapses?
Victor: Again it's fine... the provincial bank is underwritten by the national bank of Poland.
Josef: I'm still not sure... what happens if the national bank collapses?
Victor: Well, the national bank is underwritten by the National Bank of Russia.
Josef: But if the National Bank of Russia collapses I'd lose everything!
Victor: Ah... but wouldn't it be worth it!
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  #17  
Old 11-29-2010, 10:14 AM
Simplicio Simplicio is online now
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Originally Posted by Susanann View Post
Gold: On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years.
If you bought gold during its peak, during the early 80's recession and sold it in 2000, you would have lost about 80% of your inflation adjusted money. Even if you sold it during the current recession, when its price is spiking, you would've lost about half your money in real terms. Buying gold in the middle of a recesssion has been a pretty bad idea, historically, as it does indeed loose much of its value when things settle down.
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  #18  
Old 11-29-2010, 10:22 AM
Schnitte Schnitte is offline
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Originally Posted by Susanann View Post
Savings accounts of a $ billion dollars are not insured by the FDIC.
Well, my obvious response to this is that the OP only stipulated that the investment be "as safe or safer than a savings account" - there was no mentioning of FDIC insurance. Investments in savings accounts obviously are "as safe as a savings account", meeting the requirement stipulated by the OP. But that would be nitpicking; I see your point.

My suggestion: Hire a fund manager to actively manage your billion dollar portfolio. You could give him or her pretty specific instructions about the level of risk you're willing to take, and he or she would constantly redeploy capital according to latest developments on the markets. The salary of the fund manager and the other operating expenses of this private office would be small compared to the volume.
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  #19  
Old 11-29-2010, 10:25 AM
DrDeth DrDeth is offline
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Gold: On the other hand, a billion dollars in gold will hold its value and will survive currency defaults,wars, revolutions, Depressions, disease, and anything and everything else that we have seen in the past 5000 years.

.
We have proven otherwise in other threads. The value of gold fluctuates wildly, it can and has been confiscated by the government, during a revolution the revolutionaries will simply take it from you by force, it can be stolen and it's not insured by the govt. It'd weigh 20 tonnes, and the security involved would be staggering.

If the US government collapses, then you want guns, ammo and canned goods, gold won't be worth much then either.

To give an actual answer to the OP, you'd hire a Financial Advisor, or use one at a good Brokerage co like say Schwab. You'd spread your assets over CDs, Mutual funds, Bonds, Real property, a interest bearing checking acct and so forth. And sure, as long as you wait until the gold price bubble bursts, a few hundred thou in bullion isn't a bad idea (now is just about the worst time to get into buying gold, it's on a huge bubble).
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  #20  
Old 11-29-2010, 11:14 AM
Revtim Revtim is offline
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Can banks purchase additional FDIC insurance? Could I tell a bank that they can hold my billion if they purchase the additional FDIC insurance to cover the full amount?
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  #21  
Old 11-29-2010, 11:20 AM
Rigamarole Rigamarole is offline
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A few Swiss bank accounts (to hide it from the Feds... you do want to hide it from the Feds right?), some gold bullion (so you have something tangible to cling to. You might even want to build a Scrooge McDuck-style swimming pool and fill it with gold coins), and of course a traditional heavily-diversified mix of securities should do nicely.
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  #22  
Old 11-29-2010, 11:28 AM
Morgenstern Morgenstern is online now
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Buy a large farm and become totally self sustaining. Then put the rest in CDs.
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  #23  
Old 11-29-2010, 11:29 AM
Lumpy Lumpy is online now
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If things ever got so bad that banks wouldn't or couldn't honor your account, cash would probably be worthless as well. The financial systems of the world today don't rely on gold anymore, so it would probably just be another barterable item.
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  #24  
Old 11-29-2010, 11:34 AM
aruvqan aruvqan is offline
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I have a friend who would love to win a lottery, as she would take the innediate payout, that has the taxes already paid ... and keep it in safe deposit boxes so she doesnt get any interest on the money so she can piss off the tax people ... her entire value in cash, not making any taxable interest. She would remove her annual allowance and deposit it into a non interest bearing checking account.

I asked her once why not just put the entire amount into a noninterest bearing account, and she said that she did not want her entire worth to be able to be hacked out electronically, this way she would only lose a portion.

<shrug>

I would prefer to go with the managed route, with an annual allowance going into an interest bearing checking account, or perhaps 2, one for master card and one for visa debit cards, and an accountant that would pay off my american express account every month. I am not too worried about paying taxes.

Though with the obvious undependability of finance people lately, I am rethinking the investment accountant. I couldn't do much worse, at least I am honest.
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  #25  
Old 11-29-2010, 12:16 PM
Ravenman Ravenman is offline
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and keep it in safe deposit boxes so she doesnt get any interest on the money so she can piss off the tax people ...
Have you raised the question of keeping the money all in one safe deposit box? If the unthinkable happens, like the bank burns to the ground, then she's out of luck.

Think it can't happen? She's already defied the odds by winning the lottery.
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  #26  
Old 11-29-2010, 12:38 PM
Fear Itself Fear Itself is offline
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Originally Posted by Revtim View Post
What is the best financial option to store this money, that is as safe or safer than a savings account?
Nobody guarantees deposits/investments better than an FDIC savings account. Everything else, be it stocks, bonds or commodities like gold, you are depending on the word of much less reliable entities than the federal government, and you will be exposed to greater risk, but probably receive a higher return as a result.. So from a safety standpoint, there is nothing that meets your criteria.
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Old 11-29-2010, 12:40 PM
Simplicio Simplicio is online now
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Nobody guarantees deposits/investments better than an FDIC savings account. Everything else, be it stocks, bonds or commodities like gold, you are depending on the word of much less reliable entities than the federal government, and you will be exposed to greater risk, but probably receive a higher return as a result.. So from a safety standpoint, there is nothing that meets your criteria.
Eh? Treasury Bonds are guaranteed by the Feds, which also backs the FDIC, and so are presumably as safe as a (US) savings account. And there's no upper-limit to how much you can invest that way.

Last edited by Simplicio; 11-29-2010 at 12:40 PM..
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  #28  
Old 11-29-2010, 12:42 PM
tr0psn4j tr0psn4j is offline
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Under a mattress. A REALLY REALLY BIG mattress.
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  #29  
Old 11-29-2010, 12:44 PM
Animastryfe Animastryfe is offline
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This article sums up the advice given to Google employees when the company was about to IPO in 2004.
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  #30  
Old 11-29-2010, 12:58 PM
Fear Itself Fear Itself is offline
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Eh? Treasury Bonds are guaranteed by the Feds, which also backs the FDIC, and so are presumably as safe as a (US) savings account. And there's no upper-limit to how much you can invest that way.
Point taken re: US Treasury bonds. But there are many other types of investment bonds, which do not have the backing of the US government.
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  #31  
Old 11-29-2010, 01:08 PM
Markxxx Markxxx is offline
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OK let me ask this, assuming all $100 bills, how big of a storage area would you need?

$1,000,000,000 / $100 = 10,000,000

So that is 10 million one hundred dollar bills.

Anyone want to figure out how big of a storage case you'd need?
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  #32  
Old 11-29-2010, 01:16 PM
Jackknifed Juggernaut Jackknifed Juggernaut is offline
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There's some very good advice here....with the big underlying assumption that the US remains status quo in terms of the world economy. While the US Treasury Bill is still considered to be the "risk-free" investment, it's definitely become less risk-free than in decades past, if that makes any sense. In this everchanging world, there's no guarantee of anything. What good is $1 billion backed by the US government if a new Honda costs more $1 billion? Extreme example I know, but I hope you understand my point. In 50 years (or earlier), you might not want to live in the US and your US dollars may be worthless relative to other currencies.

My point is that in this day and age, you'd want to diversify globally. Personally, I'd keep 30-40% in the US in mostly low risk investments. I'd spread the rest around the world in various low risk investments, in countries and currencies that treat all investors equally. There are some countries that have different rules for foreign investors. You might have a hard time getting liquidity in these countries at the exact wrong time.
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  #33  
Old 11-29-2010, 01:20 PM
Ravenman Ravenman is offline
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Anyone want to figure out how big of a storage case you'd need?
All you'd need is one thousand "5 inch Zero Halliburton Premier Attache Cases. Buying that many cases would set you back more than half a million dollars, though.

Cite.
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  #34  
Old 11-29-2010, 01:20 PM
Covered_In_Bees! Covered_In_Bees! is offline
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You build a special room for it.

Something like these.
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  #35  
Old 11-29-2010, 01:49 PM
tr0psn4j tr0psn4j is offline
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Originally Posted by Markxxx View Post
OK let me ask this, assuming all $100 bills, how big of a storage area would you need?

$1,000,000,000 / $100 = 10,000,000

So that is 10 million one hundred dollar bills.

Anyone want to figure out how big of a storage case you'd need?
You can have a 3600' tall container if you want to put all billion of them in one stack.
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  #36  
Old 11-29-2010, 02:07 PM
robcaro robcaro is offline
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Well, assuming that you get that money at 20 years old, you can spend for the next 70 years $14,285,714 each year. That is $1,190,476 each month. This is without any interest. Just need a place to store the dollars.
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  #37  
Old 11-29-2010, 02:11 PM
Uncertain Uncertain is offline
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IF the United States defaults on its currency, then holding bonds, or any dollar denominated asset would cause you to go bankrupt.
What would it mean for the US to "default on its currency", since it's not on the gold standard (or any other commodity-backed system). Hyperinflation could make the US dollar virtually worthless, but would that be described as a "default".
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Old 11-29-2010, 04:04 PM
Lumpy Lumpy is online now
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What would it mean for the US to "default on its currency", since it's not on the gold standard (or any other commodity-backed system). Hyperinflation could make the US dollar virtually worthless, but would that be described as a "default".
The solvency of a currency is the balance between issuing a currency (essentially, making a promise), and accepting that currency back, either as payment for debts owed the issuer or paying back debts of that currency the issuer owes (essentially, keeping one's promises). If the United States defaulted on it's debts, then no one would ever invest in US government securities again. And those are usually bought with dollars, so world demand for dollars would go way, way down.
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  #39  
Old 11-29-2010, 04:43 PM
Martin Hyde Martin Hyde is offline
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If you're looking to similar safety as a savings account, then U.S. Treasury Bonds are exactly what you're looking for, and there are various ways to store them that are extremely safe. You can have them in physical bonds spread around in a bunch of safety deposit boxes. TreasuryDirect.com lets you buy bonds and in exchange you receive basically an account with them that verifies you have a right to the bond (but you can't get a physical paper version this way.)

Only problem is buying directly from the treasury makes it difficult for one person to get $1bn in bonds, there are strict limits on the amount an individual can purchase in a year and the dollar value is vastly below one billion dollars. So you'd probably need to buy actual bonds on the secondary market. I wouldn't invest in funds that attempt to "track" the performance of savings bonds, if you're looking for the general safety/return value of a savings account actual bonds are the way to go.

Some posters have suggested gold, but I would ask what you're insuring against there. Gold makes sense as part of an investment portfolio, but if you're just looking for similar safety to a savings account for a huge sum of money gold doesn't make sense to me. Firstly, where will it be stored? Any answer to that question will involve some percentage of your wealth being lost to storage costs. Trying to store it yourself with your own private security would probably cost even more. How would you convert it into liquid assets that you can actually use to buy things in today's economy? As a billionaire I'm sure you can have people who work for you that take care of all this, but then again, that cuts into your wealth even further.

The truth of the matter is, a simple U.S. savings bond is far more practical and realistic. What would you be insuring against with $1bn in gold?

If things are so bad that a person holding a billion dollars in U.S. savings bonds would be rendered a pauper, then the whole world is in serious financial and societal trouble. At least in the context of any living person's foreseeable lifetime.

If mass wars and general apocalypse hit the planet, how exactly is gold going to help you? No amount of gold will equal what truly matters in such situations, which is force, and power. No amount of gold can stop a marauding band of post-apocalyptic Road Warrior extras from taking it from you by force.

Tsar Nicholas II was one of the wealthiest men on the planet in his day. His wealth dramatically exceeded that of any other European monarch. He controlled something like 10% of the world's land mass, and all the wealth that entailed. He had entire rooms made of gold, he had more gold than you could ever imagine. He had one of the largest military forces on the planet, as well.

At the end of the day, him and his family got put against a wall in a basement and killed, all their wealth taken. People that act like gold is some sort of magical metal that will make you powerful and rich in the face of societal collapse are not students of history. Gold has been valued throughout history, and will continue to be so, however the people holding it have not been well protected by history's vagaries. Roman Emperors to Russian Tsars have found out the hard way that wealth alone is no safety net if things get really ugly.
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  #40  
Old 11-29-2010, 04:57 PM
coremelt coremelt is online now
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What is the best financial option to store this money, that is as safe or safer than a savings account? You don't care about growing the money, you feel you probably can manage to squeak by on just the initial billion.
)
Well you say you don't care about growing it, but that's actually the safest option. If it's diversified into owning multiple businesses, property, stocks AND treasury bonds then in any case other than a complete economic meltdown you'll still have your billion dollars (and more).

Eg if your overall investments are averaging 7-9% return it doesn't matter if one business goes bankrupt, or one property loses value.

With a billion you'd get a wealth management company and you'd advise them to go for growth or stability. A good company would advise you on diversifying the money across so many areas that you'd easily good a nice safe return and be in no danger of losing more than a small fraction no matter what happened. Thats safer than US treasury bonds (IMO)
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  #41  
Old 11-29-2010, 10:21 PM
Susanann Susanann is offline
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What would it mean for the US to "default on its currency", since it's not on the gold standard (or any other commodity-backed system). Hyperinflation could make the US dollar virtually worthless, but would that be described as a "default".
Yes, deflating the dollar to become worthless, is called : "inflationary default"


It is still a "default". US dollar Federal Reserve notes will still be worthless.
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  #42  
Old 11-29-2010, 10:24 PM
cmyk cmyk is offline
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When you finally make your first billion, you're automatically initialized into the Billion Dollar Club. Besides a humidor of Cuban cigars rolled in $100s, and a lovely pair of cuff links with little anchors on them, they give you a nice attaché made of baby seal skin to carry your cash around in. It also has a convenient pocket for your smartphone.
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  #43  
Old 11-29-2010, 10:24 PM
Susanann Susanann is offline
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If you bought gold during its peak, during the early 80's recession and sold it in 2000, you would have lost about 80% of your inflation adjusted money.
If you are the kind of person who buys only at peaks, then the Dow Jones that you bought in 1929 and which was worth 20 ounces of gold. Today, 80 years later, the Dow Jones is now worth just 9 ounces of gold.......................a loss of over 50%.
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Old 11-29-2010, 10:30 PM
Susanann Susanann is offline
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The value of gold fluctuates wildly, it can and has been confiscated by the government, during a revolution the revolutionaries will simply take it from you by force, it can be stolen and it's not insured by the govt. .
1. the price of everything "fluctuates", even stocks, real estate, paper money/fiat currency, and baseball cards.


2. The government can take your money even if you have no money but just an income, even if your wealth is in property or real estate, even if you buy and sell stocks, even if you get interest from CD's or Savings Bonds.

The government has "tried" to confiscate gold, but it never succeeded. No individuals ever turned in any gold, the government never went house to house to take gold, which is why old gold coins, i.e. pre 1933 gold coins, are so darn plentiful.


3. "Anything" of value, can be, and has been, stolen by criminals.

Last edited by Susanann; 11-29-2010 at 10:31 PM..
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  #45  
Old 11-29-2010, 10:37 PM
Simplicio Simplicio is online now
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Originally Posted by Susanann View Post
If you are the kind of person who buys only at peaks, then the Dow Jones that you bought in 1929 and which was worth 20 ounces of gold. Today, 80 years later, the Dow Jones is now worth just 9 ounces of gold.......................a loss of over 50%.
Err...I was responding to your statement that gold "holds its value". It doesn't, it fluctuates and if you buy at the wrong time (like now), it will loose a large chunk of its value.
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  #46  
Old 11-29-2010, 10:39 PM
Dewey Finn Dewey Finn is offline
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Originally Posted by Susanann View Post
A billion dollars in gold is still a pretty physical small package.
What do you consider to be a "pretty physical small package"? Because were you to convert the hypothetical billion dollars to a pile of gold you'd have what appears to be 25 tons to deal with. Seems kind of big. I doubt the floors in most homes are designed to support that.
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  #47  
Old 11-29-2010, 11:04 PM
DrDeth DrDeth is offline
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Originally Posted by Susanann View Post
1. the price of everything "fluctuates", even stocks, real estate, paper money/fiat currency, and baseball cards.


2. The government can take your money even if you have no money but just an income, even if your wealth is in property or real estate, even if you buy and sell stocks, even if you get interest from CD's or Savings Bonds.

The government has "tried" to confiscate gold, but it never succeeded. No individuals ever turned in any gold, the government never went house to house to take gold, which is why old gold coins, i.e. pre 1933 gold coins, are so darn plentiful.


3. "Anything" of value, can be, and has been, stolen by criminals.
1-True, which makes gold not unique or special, it's just another commodity.
2.True, which makes gold not unique or special, it's just another commodity.
3.True, which makes gold not unique or special, it's just another commodity.

Thank you for proving my point and invalidating yours. Gold is not unique or special, it's just another commodity
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  #48  
Old 11-29-2010, 11:39 PM
Chief Pedant Chief Pedant is offline
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Originally Posted by DrDeth View Post

Thank you for proving my point and invalidating yours. Gold is not unique or special, it's just another commodity
I don't think it's "just another commodity" and its current price well above its production cost backs me up, I think. It's not consumed like oil, so its supply and demand is almost entirely a function of some un-definable panache beyond its industrial utility. It's true there was a very brief spike of gold in the 80s, but in the very long run gold has outperformed even nations for stability. What 500 year-old currency would you put up against gold for purchasing power?
Those of us who think the pro-gold sentiment will persist even into real crises would suggest putting part of an investment portfolio into gold; putting more than 10 or 20% doesn't seem prudent to me.

I think the intent of the OP was not to find out how to invest wisely, though, or even to invest conservatively. I read the intent as wondering where to store such a large amount of cash as safely (and, I'd think, as liquidly) as possible.

If I were making such a decision and my horizon was short-term, TBill-based instruments are fine. Longer term I'd look to place the funds in the currencies of countries who run smaller deficits.

Last edited by Chief Pedant; 11-29-2010 at 11:39 PM..
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  #49  
Old 11-30-2010, 03:08 AM
Uncertain Uncertain is offline
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Originally Posted by Susanann View Post
If you are the kind of person who buys only at peaks, then the Dow Jones that you bought in 1929 and which was worth 20 ounces of gold. Today, 80 years later, the Dow Jones is now worth just 9 ounces of gold.......................a loss of over 50%.
Does that analysis include all the dividends that were paid over all those years?
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  #50  
Old 11-30-2010, 03:22 AM
Schnitte Schnitte is offline
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Originally Posted by Uncertain View Post
Does that analysis include all the dividends that were paid over all those years?
Not to mention the fact that the composition of the Dow Jones changes over time, so the idea of buying "the Dow Jones" in 1929 and holding it until 2010 is unfeasible. Of course, you could buy sa portfolio of shares composed of the same shares with the same relative weighting as in the Dow Jones, but then you'd have to reinvest each time the composition of the Dow Jones changes.
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