Cohousing-L Mailing List: RE: investing reserves - beyond fixed income

[Casey Morrigan (cjmorr]

We actually first made a policy decision about how to invest our reserves, 
got an o.k. on that, and then followed the policy.

The policy decision was that we would invest in things that never risked 
members' equity, though we knew there was a tradeoff for possibly reduced 
investment income.  At the time, we thought that CD's were the best way to 
go.  Our local bank had some pretty good interest rates. We had recommended 
that.  We got an ok from the full community on the investment policy and 
then got the ok on the CD's from the Coordinating Committee.

Then we thought about cash flow, and whether we might need to pull out 
money in an emergency, and did some short term CD's and then, some longer 
term ones with higher interest rates. We just made some best guesses; we 
didn't really know.

I like the tax free bonds idea; we hadn't thought of that.  We are still 
pretty young for an HOA, and don't pay a lot in absolute numbers on our 
investment income, but as David says, it's around 40% when you add up state 
and fed. Thanks for that idea.  We'll explore that in our next finance 
committee meeting.

Casey Morrigan
Two Acre Wood
Sebastopol, California


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