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Comment: What Would Your Advise Be?

Author: Lucky Luciano
Date: 2024-09-05 16:39:57

you have money sitting in your bank account, about 500,000 currency units.

You are approached by an official of the bank, who introduces you to their investment products. He tells you that they will invest your money in US Treasuries.

They will charge a management fee for their service, which will be 0.05% of your total funds under management.

US Treasuries will earn you the following interest.

1 month - 1%

3 months - 1.5%

6 months- 2%

1 Year - 2.5%.

What would you say to such a proposal?

CHB, Yaw Konadu et al, any suggestions, comments?

Your Comment:
Subject: Your Name:

Comments

Lucky Luciano on Sep 5, 16:42
Re: What Would Your Advise Be?I forgot to add. Their management fee will be charged quarterly on your total funds under management.
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Bajan on Sep 5, 16:42
Re: What Would Your Advise Be?Fuck off with your idiocy. stupid simple-minded Ewe bitch! That is my adviCe, not adviSe. FOOL!
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barima. on Sep 5, 16:53
Re: What Would Your Advise Be?The management fee is very reasonable. However, what are the other options? The TB interest rate is very low. There are far better rates for fixed deposits in the US.
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HRH Naana on Sep 5, 17:00
Re: What Would Your Advise Be?american fiction. HRH
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Nana Assange on Sep 5, 17:22
Re: What Would Your Advise Be?Earning interest of 2.5% for 1 year is rather paltry. I know credit unions that pay twice that for CDs and other deposits.
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Lucky Luciano on Sep 5, 17:36
Re: What Would Your Advise Be?Thanks for your comments. For your information, note that we are not dealing with Ghana cedis. This is why the bank official has put across US Treasuries as the proposed investment.
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BossNigga on Sep 5, 17:48
Re: What Would Your Advise Be?You didn’t state the exact amount of bank charges but some of them charge as high as 2.5 percent of the sum invested, if total interest from the investment during the investment is more than the interest charged then it’s worth it. And unlike the Ghana government paper it’s almost risk free. Do they sell say 360 days bills or the maximum is 180 days?
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Kofi Ameko on Sep 5, 17:49
And the man is a fund manager?Service fee of 0.05% is meaningless. How is it compounded? Is it daily, hourly, yearly, weekly etc? Tell the man that he does not know his job. His information is unsuitable. Some Accountants will foolishly assume Norminal rate. That is another tosh.
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Lucky Luciano on Sep 5, 18:02
Re: And the man is a fund manager?I provided enough info about service charge. 0.05% on total funds under management. It will be charged quarterly. One would be able to work out what the service charge will be based on this information. It is not meaningless.
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Kofi Ameko on Sep 5, 18:29
Re: And the man is a fund manager?The quarterly was missing from the information provided in the advisory post. Now it is complete.The fund manager might have read my post. Any wonder the BoG released 700 million cedis last week in support of bailout for CFMCs( Collapsed Fund Management Companies)?barima has been silent on this because they are not SOEs.
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Anonymous- CHB on Sep 5, 17:59
Re: What Would Your Advise Be?1. The fees about $62/Qtr on AUM. There is no hidden fees? 2. Have you made your money already and and hence you are just looking to park ur sika somewhere safe and secure for a while then yes...these are zero-risk and so returns are typically very low because Uncle Sam unlike KOA, does not do hair cut. 3. Remember US Inflation Rate is currently at 2.9% and inflation rate is higher than the T-bill's returns after 1yr at 2.5%....is US inflation headed done? If u 4 The Killer...You small returns back to Ghana cedi will wipe ur gains...Cedi/Dollar will be Ghc20/$1 in a years time. Ohhhh I forgot, JDM is coming it will be around Ghc8/$!!
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Lucky Luciano on Sep 5, 18:19
Re: What Would Your Advise Be?i) The answer to your question (2) is YES ii) Concerning item (4), the small returns back to Ghana will b in the same currency units invest, so cedi rate will not affect it. What will you say after this clarification.
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Anonymous- CHB on Sep 6, 10:17
Re: What Would Your Advise Be?If you don't need the sika within the year, I will go for the annual at 2.5% hoping to yield $12,500 -$1,000 = $11,500 Obv u know if u withdraw before the year, u will face penalties But what did the Guy charging you $1,000/year to "passively" manage your AUM suggest?
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Kwaw No Need on Sep 5, 18:04
Re: What Would Your Advise Be?Choose the first option. 1% per month, assuming monthly compounding will yield 12.6825% (1+r)^n. None on the other options come close.
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Anonymous- CHB on Sep 5, 18:16
Re: What Would Your Advise Be?Interesting point NN I need to understand the US Treasury bills as its lacking.... my understanding was do not pay interest payments and are instead sold at a discount to their face value, the yield determines the initial discount u buy But you receive the full face amount when the T-bill matures. So the difference btn purchase price and the face value at maturity is the implied interest
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Lucky Luciano on Sep 5, 18:21
Re: What Would Your Advise Be?Interest is computed pro-rata per annum, and is not compounded
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Kofi Ameko on Sep 5, 22:13
Re: What Would Your Advise Be?Kwaw No need, What is your r?
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As3ms3b3 on Sep 5, 18:38
Re: What Would Your Advise Be?why is the rate per month so high compared to the others?
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Lucky Luciano on Sep 5, 18:56
Re: What Would Your Advise Be?Per month has lowest rate.
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Yaw Konadu - On The Road on Sep 5, 20:21
Re: What Would Your Advise Be?I just saw your post. I have been busy all day. I will think about it. Thanks. YK
Reply