On Sunday, 18 September 2016 at 16:13:55 UTC, Andrei Alexandrescu
The basic idea here is to have a buffer for short-term
borrowing. For example, for DConf we'd need to plop down some
money for renting a conference hall until proceeds from
registration roll in. The notion of being able to take a 1.60%
APY for that is quite attractive. Sadly, I've looked at IB
since and they don't offer any checking or general banking. I'm
not 100% sure, but I assume they'd lend money only for
investing; they wouldn't allow you to transfer cash on margin
into your bank. Does anyone know exactly what the case is?
I had some other thoughts on this.
There is a concept in investing called asset liability
management. They use it at insurance companies. The idea is that
if you have a liability in x years, then you should have an asset
whose value you're sure about in x years to match it.
So from the perspective of Dconf, you can estimate what your
expenses will be: downpayment for the room and expenses closer to
the date. You could represent this as a series of estimated
future cash flows at certain dates. Then, you need to think about
what kind of investments you would make where you would be sure
you can meet those liabilities. So if you need $x to rent a room
in Y months, then you might invest in a bond with a Y months
remaining such that you will have at least $x at maturity.
You could also plan a few years in advance for the next two or
three Dconfs, probably also incorporating some inflation in costs.
Then, you can think about the remainder of the portfolio, knowing
that you most significant liabilities are already covered.