Am I holding too much cash?

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justsomeguy2018
Posts: 277
Joined: Wed Oct 03, 2018 8:11 pm

Am I holding too much cash?

Post by justsomeguy2018 » Sat Jul 13, 2019 4:25 pm

38 y.o. with 1st child coming soon.

Sitting on ~$150k cash (most of it earning around 2.15% blended interest) and ~$192k in investment/retirement accounts.

I am maxing out workplace retirement accounts, so assuming no major market decline, probably looking to end the year at around $160k cash and $210k in investment accounts.

I never intended to get to this large of a cash position, but with child coming, became more conservative recently.

My current "comfortable number" for cash is between $140k and $160k...(used to be ~$108k was my comfortable number).

I have a few rationales here:

Cash to contribute to college fund
Ample cash in case 1 parent decides to stay-at-home a few years or loses job (i.e. become 1 income household)
Ample cash in case family grows larger and larger house needed in future
Cash to reduce interest expense on car purchase or other big-ticket item (don't plan on this anytime soon, but never know what may come up)
Cash to account for increase baby expenses or unexpected "surprises"
Cash for unexpected home repairs
Cash for any potential investment opportunities outside of the market
The overall freedom of movement and decision making that liquidity provides

I guess if I lower my cash position my options would be:

pay down mortgage (4.375% current rate, but considering refinancing to a 15-yr if rates drop to 3%)
put in taxable account

Am I crazy to think I need $160k in cash? I feel like I would be good with that number, and anything excess to that I would invest or pay down mortgage, but on the other hand whenever I hit a cash milestone I keep increasing the number higher....if child wasn't in the picture I think I would feel differently, but feel like I need more backup cash with child on the way.

livesoft
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Re: Am I holding too much cash?

Post by livesoft » Sat Jul 13, 2019 4:33 pm

Since you have more than 2 weeks of expenses in cash I have to answer Yes, you are holding too much cash in my opinion.

I have no cash. I just invest all my money all the time. If I need to pay an expense, then I sell shares and pay the expense.
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Grt2bOutdoors
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Re: Am I holding too much cash?

Post by Grt2bOutdoors » Sat Jul 13, 2019 4:34 pm

Wait until you have the child, then make a decision.
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Topic Author
justsomeguy2018
Posts: 277
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Re: Am I holding too much cash?

Post by justsomeguy2018 » Sat Jul 13, 2019 4:39 pm

livesoft wrote:
Sat Jul 13, 2019 4:33 pm
Since you have more than 2 weeks of expenses in cash I have to answer Yes, you are holding too much cash in my opinion.

I have no cash. I just invest all my money all the time. If I need to pay an expense, then I sell shares and pay the expense.
You've probably been investing long enough to have enough growth where this isn't an issue, but my fear with this approach was being forced to sell during a market downturn.

livesoft
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Re: Am I holding too much cash?

Post by livesoft » Sat Jul 13, 2019 4:45 pm

You save on taxes then during a market downturn. If you never invest, then you will never have enough growth because you never started.
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Sandtrap
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Re: Am I holding too much cash?

Post by Sandtrap » Sat Jul 13, 2019 4:48 pm

justsomeguy2018 wrote:
Sat Jul 13, 2019 4:25 pm
38 y.o. with 1st child coming soon.

Sitting on ~$150k cash (most of it earning around 2.15% blended interest) and ~$192k in investment/retirement accounts.

I am maxing out workplace retirement accounts, so assuming no major market decline, probably looking to end the year at around $160k cash and $210k in investment accounts.

I never intended to get to this large of a cash position, but with child coming, became more conservative recently.

My current "comfortable number" for cash is between $140k and $160k...(used to be ~$108k was my comfortable number).

I have a few rationales here:

Cash to contribute to college fund
Ample cash in case 1 parent decides to stay-at-home a few years or loses job (i.e. become 1 income household)
Ample cash in case family grows larger and larger house needed in future
Cash to reduce interest expense on car purchase or other big-ticket item (don't plan on this anytime soon, but never know what may come up)
Cash to account for increase baby expenses or unexpected "surprises"
Cash for unexpected home repairs
Cash for any potential investment opportunities outside of the market
The overall freedom of movement and decision making that liquidity provides

I guess if I lower my cash position my options would be:

pay down mortgage (4.375% current rate, but considering refinancing to a 15-yr if rates drop to 3%)
put in taxable account

Am I crazy to think I need $160k in cash? I feel like I would be good with that number, and anything excess to that I would invest or pay down mortgage, but on the other hand whenever I hit a cash milestone I keep increasing the number higher....if child wasn't in the picture I think I would feel differently, but feel like I need more backup cash with child on the way.
1
The first 2 reasons are more than enough to carry a substantial cash allocation. And, only you can ascertain how much based on those 2 factors.
2
There would be 100 different reasons and amounts for 100 people in a room.
3
The last reason alone is enough to hold that much in "cash" or similar accounts, if it gives you a comfort zone. For example: you might feel that for some reason you need to have more on hand in this scenario that other folks for personal reasons. Nobody can refute that, and shouldn't.
4. The only suggestion is to hold this $160k "Emergency Fund" in high yield accounts, CD ladders, Treasury Funds, etc, etc.
Here is a current chart from Fidelity that shows current rates on "fixed".
https://fixedincome.fidelity.com/ftgw/fi/FILanding
And a chart from Vanguard
https://personal.vanguard.com/us/FixedIncomeHome

Congratulations on having things so well thought out. :D

Congratulations on having a child. :sharebeer

FWIW: should you decide to carry less cash and add funds to your retirement accounts, then that's also a good thing to do. Something you might ponder on after your child is born and things settle down. You don't need to do anything with your funds for now.

j :D

* I see that "Grt2bOutdoors" beat me to the same suggestion as I was typing. . . .slowly. . . .
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Explorer
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Re: Am I holding too much cash?

Post by Explorer » Sat Jul 13, 2019 7:28 pm

OP - Sleeping well at night is THE MOST IMPORTANT thing in investing. No two people are alike in their investing "mettle" or the "emotional attitude" towards investing.

Your question "Am I holding too much cash?" can only be answered by one person - and you know who that person is.... so why ask?

Congratulations on having a kid and enjoying that phase of life!

Regards as always.

retiredjg
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Re: Am I holding too much cash?

Post by retiredjg » Sat Jul 13, 2019 7:37 pm

I think you are holding too much cash. But I also think you have a need to hold that much cash at the present time. You would not be comfortable without it.

Re-evaluate in a year or two.

mchampse
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Re: Am I holding too much cash?

Post by mchampse » Sat Jul 13, 2019 7:40 pm

+1 on being able to sleep at night

That said, remember that your taxable investments are liquid. You can cash them in at anytime. An emergency fund is there to make sure you don’t end up having to cash them in at an inopportune time.

All of the things you mention are certainly possible, but it’s not likely that it will add up to $160k in any short period of time. I’d suggest at least putting some of the money into a short or medium term bond fund and leaving 6-9 months of expenses. If emergencies happen, you can spend money from a smaller emergency fund and slowly liquidate some of your holdings if it appears as though you will need more.

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Stinky
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Re: Am I holding too much cash?

Post by Stinky » Sat Jul 13, 2019 7:59 pm

When you get your new baby home -
When you decide on whether both parents return to work -
When you get college fund planned out -

Then you can reassess your cash position.

You’re pretty heavy cash right now, and that’s ok. Being heavy cash is not a good long term plan for most young folks, but it’s ok for you right now.
It's a GREAT day to be alive - Travis Tritt

Dottie57
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Re: Am I holding too much cash?

Post by Dottie57 » Sat Jul 13, 2019 8:00 pm

Sandtrap wrote:
Sat Jul 13, 2019 4:48 pm
justsomeguy2018 wrote:
Sat Jul 13, 2019 4:25 pm
38 y.o. with 1st child coming soon.

Sitting on ~$150k cash (most of it earning around 2.15% blended interest) and ~$192k in investment/retirement accounts.

I am maxing out workplace retirement accounts, so assuming no major market decline, probably looking to end the year at around $160k cash and $210k in investment accounts.

I never intended to get to this large of a cash position, but with child coming, became more conservative recently.

My current "comfortable number" for cash is between $140k and $160k...(used to be ~$108k was my comfortable number).

I have a few rationales here:

Cash to contribute to college fund
Ample cash in case 1 parent decides to stay-at-home a few years or loses job (i.e. become 1 income household)
Ample cash in case family grows larger and larger house needed in future
Cash to reduce interest expense on car purchase or other big-ticket item (don't plan on this anytime soon, but never know what may come up)
Cash to account for increase baby expenses or unexpected "surprises"
Cash for unexpected home repairs
Cash for any potential investment opportunities outside of the market
The overall freedom of movement and decision making that liquidity provides

I guess if I lower my cash position my options would be:

pay down mortgage (4.375% current rate, but considering refinancing to a 15-yr if rates drop to 3%)
put in taxable account

Am I crazy to think I need $160k in cash? I feel like I would be good with that number, and anything excess to that I would invest or pay down mortgage, but on the other hand whenever I hit a cash milestone I keep increasing the number higher....if child wasn't in the picture I think I would feel differently, but feel like I need more backup cash with child on the way.
1
The first 2 reasons are more than enough to carry a substantial cash allocation. And, only you can ascertain how much based on those 2 factors.
2
There would be 100 different reasons and amounts for 100 people in a room.
3
The last reason alone is enough to hold that much in "cash" or similar accounts, if it gives you a comfort zone. For example: you might feel that for some reason you need to have more on hand in this scenario that other folks for personal reasons. Nobody can refute that, and shouldn't.
4. The only suggestion is to hold this $160k "Emergency Fund" in high yield accounts, CD ladders, Treasury Funds, etc, etc.
Here is a current chart from Fidelity that shows current rates on "fixed".
https://fixedincome.fidelity.com/ftgw/fi/FILanding
And a chart from Vanguard
https://personal.vanguard.com/us/FixedIncomeHome

Congratulations on having things so well thought out. :D

Congratulations on having a child. :sharebeer

FWIW: should you decide to carry less cash and add funds to your retirement accounts, then that's also a good thing to do. Something you might ponder on after your child is born and things settle down. You don't need to do anything with your funds for now.

j :D

* I see that "Grt2bOutdoors" beat me to the same suggestion as I was typing. . . .slowly. . . .
My opinion is it is good to have cash on hand. I have more than OP in cash. It will be used for spending during next years until retirement. A bathroom remodel is in there too. Many would say I have too much. But I am comfortable.

Ferdinand2014
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Re: Am I holding too much cash?

Post by Ferdinand2014 » Sat Jul 13, 2019 8:16 pm

justsomeguy2018 wrote:
Sat Jul 13, 2019 4:25 pm
38 y.o. with 1st child coming soon.

Sitting on ~$150k cash (most of it earning around 2.15% blended interest) and ~$192k in investment/retirement accounts.

I am maxing out workplace retirement accounts, so assuming no major market decline, probably looking to end the year at around $160k cash and $210k in investment accounts.

I never intended to get to this large of a cash position, but with child coming, became more conservative recently.

My current "comfortable number" for cash is between $140k and $160k...(used to be ~$108k was my comfortable number).

I have a few rationales here:

Cash to contribute to college fund
Ample cash in case 1 parent decides to stay-at-home a few years or loses job (i.e. become 1 income household)
Ample cash in case family grows larger and larger house needed in future
Cash to reduce interest expense on car purchase or other big-ticket item (don't plan on this anytime soon, but never know what may come up)
Cash to account for increase baby expenses or unexpected "surprises"
Cash for unexpected home repairs
Cash for any potential investment opportunities outside of the market
The overall freedom of movement and decision making that liquidity provides

I guess if I lower my cash position my options would be:

pay down mortgage (4.375% current rate, but considering refinancing to a 15-yr if rates drop to 3%)
put in taxable account

Am I crazy to think I need $160k in cash? I feel like I would be good with that number, and anything excess to that I would invest or pay down mortgage, but on the other hand whenever I hit a cash milestone I keep increasing the number higher....if child wasn't in the picture I think I would feel differently, but feel like I need more backup cash with child on the way.
If the 192,000 in retirement accounts is in all equities then you have an allocation of about 57/43 equities/fixed income if you include emergency funds as part of your allocation. Do you sleep well? Then you have the right amount of cash. It might help to develop an investment policy statement which is discussed elsewhere on this forum.
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usagi
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Re: Am I holding too much cash?

Post by usagi » Sat Jul 13, 2019 8:36 pm

The simple truth is, the few wealthy people (assets 10-60 million range)I know (except one) made their fortunes because they held a large amount of cash and were able to purchase valuable assets at huge discounts to intrinsic value during periods of economic decline.

The question I would ask myself is, if I had a huge pile of cash available what would I do with it during a sharp, prolonged economic downturn?

My original investment strategy was three pronged(i'll discuss two of those prongs because they are relevant). My primary plan was based on assuming the low end of the markets average return over a 20 year period in order get to 25 times expenses. In other words that was my floor, based on the liquid capital markets available to everyone.

The second prong was based on holding a great deal of cash equivalents in order to take advantage of distortions in asset prices during periods of economic collapse. That cash was deployed to some extent in 2000 and again after 2008. About 1/2 in the equity markets and the other half in real estate and in the purchase of commercial equipment assets. That produced outside returns that has propelled me to some 135x expenses in 25 years.

My point is, the above was simple approach that allowed me to maintain large cash cushions that was important to me psychologically. I see nothing wrong with cash if it gives you comfort, I see even less wrong with it if it is part of a strategic long term what-if investment strategy that allows you to capitalize on value distortions.

7eight9
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Re: Am I holding too much cash?

Post by 7eight9 » Sat Jul 13, 2019 9:03 pm

If you are comfortable with that level of cash then that is what you should hold. The one suggestion that I would make is that if you are so inclined you can likely beat the 2.15% interest rate you are currently receiving. A higher paying account of around 2.50% should be pretty easily obtainable. If you are inclined to do a bit more then chasing bank bonuses will push that percentage higher. For example, I recently opened an account with CapitalOne - $500 bonus on $50,000 deposit. Pays 2.0% interest. Even if I left it sitting in the account after receiving the bonus for an entire year (after depositing initially) I would be getting 3.0%. But I'll move it once the bonus hits - at the minimum to an account that pays 2.50% (if that is still a prevailing rate).
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RevFran
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Re: Am I holding too much cash?

Post by RevFran » Sat Jul 13, 2019 10:03 pm

For now, you have lots of reasons to hold this much cash — but do refi to 15 years and thus start putting more money each month to your mortgage, rather than contributing to more cash. You’ll be mortgage free before the kiddo is in college!

sf_tech_saver
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Re: Am I holding too much cash?

Post by sf_tech_saver » Sat Jul 13, 2019 11:03 pm

I would explore building an after-tax bond portfolio. At some scale of a portfolio, your bonds can also function as the emergency fund.

If your bracket gets high enough muni's are really fun to collect. If 30-50% of your cash was in investment grade bonds would you really feel less secure?

My after tax is almost all VTI + Muni with very little cash. While there are some scenarios where both stocks and bonds are getting hammered at once often one or the other is doing well if I had to pull cash for an emergency.
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TxAg
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Re: Am I holding too much cash?

Post by TxAg » Sat Jul 13, 2019 11:09 pm

livesoft wrote:
Sat Jul 13, 2019 4:33 pm
Since you have more than 2 weeks of expenses in cash I have to answer Yes, you are holding too much cash in my opinion.

I have no cash. I just invest all my money all the time. If I need to pay an expense, then I sell shares and pay the expense.
+1

livesoft
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Re: Am I holding too much cash?

Post by livesoft » Sun Jul 14, 2019 1:28 am

I just read a book review on updated I Will Teach You To Be Rich

For this thread, the reviewer writes:
First, concentrate on the relatively few personal finance decisions that truly matter to your long-term financial health. For example, don’t agonize about whether you can earn a tiny bit more — 2.35 percent as opposed to 2.3 percent — on a certificate of deposit. After all, on a $20,000 C.D., the difference would be just $10 a year. Instead, make sure that the cash component of your overall portfolio is small. It should be just big enough to cover foreseeable emergencies if you are young, he argues.

The rest of your money should be invested, because both bonds and stocks have typically returned substantially more than cash equivalents like C.D.s and money market funds, he writes.
Something the reviewer wrote earlier:
The bragging, as well as the frequently unsympathetic tone, remains, although he does warn readers upfront what to expect.

“Listen up, crybabies,” he writes. “This isn’t your grandma’s house and I am not going to bake you cookies and coddle you.”
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invest4
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Re: Am I holding too much cash?

Post by invest4 » Sun Jul 14, 2019 6:35 am

1st baby - woot!

Of course, uncharted waters can also be unsettling (my own wife stopped working for example).

IGood news - barring daycare or medical issues, babies are cheap! (imho). I believe you have more cash than needed, but sounds as though you plan to deploy some of it.

* 529 - makes sense. Assess best approach and amounts (state tax benefits, over several years, etc.?)

* Paying for car - yes (hopefully a used one in my opinion).

* Other unexpected - yes. Powerful feeling to be confident in handling the most likely surprises.

* 15 year mortgage - I do not advise this. I propose a 30 year to avail yourself of historically low interest rates and the flexibility to pay more if able / desired, but have lower monthly nut if you experience significant financial challenges.

HSA - if available to you, another option to reduce some of that cash in a super duper tax advantaged vehicle.

You don’t provide much more info re: income, daycare required, also making annual Roth contributions, etc. I also get the impression you are adding to the pile (bonuses, other?).

My initial thought is 80k... bump it to 100k if want to buffer a bit. Of course, whatever makes your family comfortable is important.

For interest, I carry 230k cash at the moment, but in a very different phase...family of 6 with college in progress, etc.

Congratulations again and best wishes!

etherlinkage
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Re: Am I holding too much cash?

Post by etherlinkage » Sun Jul 14, 2019 8:46 am

livesoft wrote:
Sat Jul 13, 2019 4:45 pm
You save on taxes then during a market downturn. If you never invest, then you will never have enough growth because you never started.

I’m interested by your comments. Do you feel as though 2 weeks is appropriate for both retirees and people still in the workforce? I’ve always abided by the 3 months of expenses, but that leads to a certain degree of opportunity cost.
Save early, save aggressively, and stay the course.

renue74
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Re: Am I holding too much cash?

Post by renue74 » Sun Jul 14, 2019 8:50 am

livesoft wrote:
Sat Jul 13, 2019 4:33 pm
Since you have more than 2 weeks of expenses in cash I have to answer Yes, you are holding too much cash in my opinion.

I have no cash. I just invest all my money all the time. If I need to pay an expense, then I sell shares and pay the expense.
+1 This is what I do.

I'm sorry, but I never understood having emergency funds or cash on hand. If we have a major expense, I simply sell some shares.

If we have a real emergency, which I can't recall having in a long time, we use a credit card if we must pay a large sum immediately and then pay off with sold shares of XYZ.

Invest the cash.

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goingup
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Re: Am I holding too much cash?

Post by goingup » Sun Jul 14, 2019 9:28 am

OP-
That's too much cash for your situation. I've read your prior posts and you've been pessimistic about investing in the market for nearly a year. I suspect your list of rationales has a lot to do with fear of losing money in the market.

My suggestion is to make a plan for investing in a taxable account instead of continuing to horde cash. If you use mutual funds you can automate purchases from your checking account. If you use ETFs set up a calendar of monthly purchases and stick to it. Jack Bogle famously said, "Invest we must".

Holding cash over time is a tremendous drag on portfolio returns. At your age and level of wealth holding nearly 50% of your assets in cash will slow your ability to build wealth over time. Get yourself invested in an appropriate stock/bond mix. Keep a reasonable emergency fund, too. Of course, you may lose money by holding either stock or bond funds, but you consider yourself an investor, right? That comes with the territory. :D

livesoft
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Re: Am I holding too much cash?

Post by livesoft » Sun Jul 14, 2019 10:47 am

etherlinkage wrote:
Sun Jul 14, 2019 8:46 am
I’m interested by your comments. Do you feel as though 2 weeks is appropriate for both retirees and people still in the workforce? I’ve always abided by the 3 months of expenses, but that leads to a certain degree of opportunity cost.
Clearly, one has enough of an emergency fund to cover their fears. I have enough taxable assets that I am fearless. Perhaps you do not have enough taxable assets that you are not that fearless. A point I want to make is that if you have ANY investments in equities, then they are going to lose money no matter how big your emergency fund is. I am pretty sure that many people on this forum would consider 3 months of expense inadequate for an emergency fund. If that was ALL the assets that one had, then I would agree with them, but if one has 2 years of expenses invested in equities in a taxable account I think that would be more than adequate.

The problem is that if one is always building up a cash emergency fund, then one will never get enough equities in taxable. One has to start somewhere. I guess one could save up 2 or 3 years worth like the OP and then invest most of it as a lump-sum in equities. But I think it is probably better to get started earlier.
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Broken Man 1999
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Re: Am I holding too much cash?

Post by Broken Man 1999 » Sun Jul 14, 2019 10:59 am

I try to hold as little cash as is possible. The cash held is simply what our needs are based on next month's bills. I sell individual stocks or redirect dividends to have the cash available at the end of the month, where it is transferred to my credit union account to pay bills.

The life-span of my cash is 2-3 weeks, at the most.

Broken Man 1999
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ruralavalon
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Re: Am I holding too much cash?

Post by ruralavalon » Sun Jul 14, 2019 11:26 am

Congratulations on your first child coming soon :) .

It is good to see that you are maxing out your workplace retirement accounts.

Are you also eligible to contribute to IRAs?


justsomeguy2018 wrote:
Sat Jul 13, 2019 4:25 pm
38 y.o. with 1st child coming soon.

Sitting on ~$150k cash (most of it earning around 2.15% blended interest) and ~$192k in investment/retirement accounts.

I am maxing out workplace retirement accounts, so assuming no major market decline, probably looking to end the year at around $160k cash and $210k in investment accounts.

I never intended to get to this large of a cash position, but with child coming, became more conservative recently.

My current "comfortable number" for cash is between $140k and $160k...(used to be ~$108k was my comfortable number).

I have a few rationales here:

Cash to contribute to college fund
Ample cash in case 1 parent decides to stay-at-home a few years or loses job (i.e. become 1 income household)
Ample cash in case family grows larger and larger house needed in future
Cash to reduce interest expense on car purchase or other big-ticket item (don't plan on this anytime soon, but never know what may come up)
Cash to account for increase baby expenses or unexpected "surprises"
Cash for unexpected home repairs
Cash for any potential investment opportunities outside of the market
The overall freedom of movement and decision making that liquidity provides

I guess if I lower my cash position my options would be:

pay down mortgage (4.375% current rate, but considering refinancing to a 15-yr if rates drop to 3%)
put in taxable account

Am I crazy to think I need $160k in cash? I feel like I would be good with that number, and anything excess to that I would invest or pay down mortgage, but on the other hand whenever I hit a cash milestone I keep increasing the number higher....if child wasn't in the picture I think I would feel differently, but feel like I need more backup cash with child on the way.
I think you do have way too much cash for your situation

A child does change everything. Raising children is expensive. But I think you are overreacting, perhaps understandably, because at age 38 this will be a big change for you. You mention the child 4 times, so obviously this troubles you.

For what it is worth on one income we raised 4 children, paid for their college expenses, and 3 weddings so far, and never had even remotely that much cash on hand. You just don't need to do that.

You will have 43% in cash than and just 57% in retirement investments. Cash is certain to give you to give you a negative real return net of inflation and taxes. Holding that much cash is a very bad idea in my opinion.

In my opinion either: (1) paying off the mortgage; or (2) investing in a taxable brokerage account using very tax-efficient stock index funds, would be better for you.

Paying off the mortgage reduces your need for a cash resrrve, by reducing the amount of your basic living expenses. A large taxable account nearly eliminates the need for a cash reserve.

. . . . .

how much in cash or equivalent would be suitable for an emergency fund?

About how much are your basic living expenses annually? How stable is your job, your employer, and the industry you work in? Do you have any debt other than the mortgage note?
Last edited by ruralavalon on Sun Jul 14, 2019 11:40 am, edited 3 times in total.
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delamer
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Re: Am I holding too much cash?

Post by delamer » Sun Jul 14, 2019 11:37 am

You literally listed 8 potential reasons that you’d need cash.

Surely not all of those while come to pass in the next 5 years?

Plus you are almost 50% in cash overall, which is a very high allocation regardless of the actual dollars involved.

Jefferson
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Re: Am I holding too much cash?

Post by Jefferson » Sun Jul 14, 2019 11:55 am

OP,

I’m 38 years old. I have $1.24MM in stocks and bonds and $350K in cash.

I have reasons. So do you. You don’t need to justify them to anyone but yourself.

Holding a significant amount of cash means that you are likely leaving some upside on the table. Whether your reasons outweigh this is up to you.

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ruralavalon
Posts: 16159
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Location: Illinois

Re: Am I holding too much cash?

Post by ruralavalon » Sun Jul 14, 2019 12:07 pm

Jefferson wrote:
Sun Jul 14, 2019 11:55 am
OP,

I’m 38 years old. I have $1.24MM in stocks and bonds and $350K in cash.

I have reasons. So do you. You don’t need to justify them to anyone but yourself.

Holding a significant amount of cash means that you are likely leaving some upside on the table. Whether your reasons outweigh this is up to you.
But at age 38 justsomeguy2018 has only $192k or $210k in retirement savings. This is not good.
Last edited by ruralavalon on Sun Jul 14, 2019 12:11 pm, edited 1 time in total.
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Jefferson
Posts: 108
Joined: Wed Feb 21, 2018 1:37 pm

Re: Am I holding too much cash?

Post by Jefferson » Sun Jul 14, 2019 12:11 pm

ruralavalon wrote:
Sun Jul 14, 2019 12:07 pm
Jefferson wrote:
Sun Jul 14, 2019 11:55 am
OP,

I’m 38 years old. I have $1.24MM in stocks and bonds and $350K in cash.

I have reasons. So do you. You don’t need to justify them to anyone but yourself.

Holding a significant amount of cash means that you are likely leaving some upside on the table. Whether your reasons outweigh this is up to you.
But at age 38 justsomeguy2018 has only $192k or $210k in retirement savings, which is not good.
I had almost exactly the same thing at 34. “Good” is a relative term.

lostdog
Posts: 1857
Joined: Thu Feb 04, 2016 2:15 pm

Re: Am I holding too much cash?

Post by lostdog » Sun Jul 14, 2019 12:22 pm

TxAg wrote:
Sat Jul 13, 2019 11:09 pm
livesoft wrote:
Sat Jul 13, 2019 4:33 pm
Since you have more than 2 weeks of expenses in cash I have to answer Yes, you are holding too much cash in my opinion.

I have no cash. I just invest all my money all the time. If I need to pay an expense, then I sell shares and pay the expense.
+1
+2
VT/VTWAX+BNDW

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Wiggums
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Re: Am I holding too much cash?

Post by Wiggums » Sun Jul 14, 2019 12:49 pm

Stinky wrote:
Sat Jul 13, 2019 7:59 pm
When you get your new baby home -
When you decide on whether both parents return to work -
When you get college fund planned out -

Then you can reassess your cash position.

You’re pretty heavy cash right now, and that’s ok. Being heavy cash is not a good long term plan for most young folks, but it’s ok for you right now.
+1 I agree.

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