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Municipal money market not such a good deal right now

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  • Avatar Infinity 
    Participant
    Status: Physician
    Posts: 92
    Joined: 05/25/2019

    After taxes and adjusting for inflation, there is no capital gains left on my Prime Money Market Fund.

    What a disappointment that we have to pay tax on money that is depreciated in value!

    Anyone has a good suggestion on where to put emergency funds or funds that may be needed in the next 3-12 months?

    #229946 Reply
    Dreamgiver Dreamgiver 
    Participant
    Status: Physician
    Posts: 859
    Joined: 03/09/2017

    I moved my cash stash to VUSXX (treasury money market), which is exempt from state tax for most.

    $50k to open, but they don’t make you maintain that as a minimum balance, and it’s yielding 2.18%. In a high-tax state (like MN with a marginal rate of 9.85%), it’s a pretty good deal.

    Click to expand…

    Even in my state where the income tax is half yours VUSXX still makes sense

    #229949 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018
    Anyone has a good suggestion on where to put emergency funds or funds that may be needed in the next 3-12 months?

    Click to expand…

    Vanguard Prime Money Market Fund

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #229952 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4410
    Joined: 01/08/2016
    Anyone has a good suggestion on where to put emergency funds or funds that may be needed in the next 3-12 months?

    Click to expand…

    the same place everyone else says.

    #229967 Reply
    Liked by Infinity
    Avatar Infinity 
    Participant
    Status: Physician
    Posts: 92
    Joined: 05/25/2019
    Anyone has a good suggestion on where to put emergency funds or funds that may be needed in the next 3-12 months? 

    Click to expand…

    the same place everyone else says.

    Click to expand…

    I hope to hear offshore account. 🙂

    #229985 Reply
    Avatar treesrock 
    Participant
    Status: Physician
    Posts: 335
    Joined: 08/14/2017
    Anyone has a good suggestion on where to put emergency funds or funds that may be needed in the next 3-12 months? 

    Click to expand…

    Vanguard Prime Money Market Fund

    Click to expand…

    Why would this be better than, say, the Wealthfront Cash account which currently has a higher rate?

    #230025 Reply
    Liked by Infinity
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2374
    Joined: 03/01/2018

    Wealthfront Cash is almost certainly fine and Prime MMF is certainly not the only good option.

    I’ve had poor experience with another robo advisor so I’ll stick with Vanguard. Or Schwab. Or E*TRADE.

    T bills would be another great option.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #230028 Reply
    Liked by Infinity, Peds

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