What Percentage CASH are you?

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herpfinance
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Re: What Percentage CASH are you?

Post by herpfinance » Wed May 09, 2018 9:55 am

Hyperborea wrote:
Wed May 09, 2018 9:31 am
Cash has never been set at a percentage of the portfolio. It's been set as a fixed amount based on need. So, it can be calculated as a percentage of the total portfolio but that's pretty much meaningless. [...] Before I retired, we had only the floats needed at the banks and very short term savings. None of those were a percentage of the portfolio.
I have many years to go until retirement, but this is my plan as well. Allocating X years worth of living expenses in cash is going to be my plan upon retirement. It's mainly an exercise in emotional comfort. Coincidentally, if you plan to withdraw a fixed percentage of your portfolio every year, then you essentially end up holding a fixed percentage of cash in your portfolio (assuming you only withdraw from cash, that is).

As long as I have a steady income, I don't need too large of a buffer, as the continuous cash flow will more than cover incoming expenses.
"The intelligent investor is a realist who sells to optimists and buys from pessimists" - Benjamin Graham

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munemaker
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Re: What Percentage CASH are you?

Post by munemaker » Wed May 09, 2018 3:18 pm

AtlasShrugged? wrote:
Wed May 09, 2018 7:38 am
Why do you do this?
munemaker....You ask a fair question; I shall answer.

...

munemaker, I hope this helps. I wanted to answer your question in a way where you'd understand why we did what we did.
Thanks for the explanation. Sorry you had to go through all that. Glad you were able to pull yourselves up. Remarkable story.

sketchy9
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Re: What Percentage CASH are you?

Post by sketchy9 » Fri May 11, 2018 6:35 pm

munemaker wrote:
Wed May 09, 2018 3:18 pm
AtlasShrugged? wrote:
Wed May 09, 2018 7:38 am
Why do you do this?
munemaker....You ask a fair question; I shall answer.

...

munemaker, I hope this helps. I wanted to answer your question in a way where you'd understand why we did what we did.
Thanks for the explanation. Sorry you had to go through all that. Glad you were able to pull yourselves up. Remarkable story.
It's still not clear to me why the need for physical cash with weapons to protect it, but to each his own.

Spirit Rider
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Re: What Percentage CASH are you?

Post by Spirit Rider » Fri May 11, 2018 7:35 pm

In the context of an Asset Class this is the SEC's definition.

Cash - Cash and cash equivalents - such as savings deposits, certificates of deposit, treasury bills, money market deposit accounts, and money market funds.

I would add Savings Bonds >= 1 year. After 1 year you can redeem Savings bonds in a day or two and you only lose the last three months interest. After 5 years, you get the full value. This far less than CD early redemption penalties.

LarryAllen
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Re: What Percentage CASH are you?

Post by LarryAllen » Fri May 11, 2018 7:37 pm

I don't keep track precisely but I would guess about 15%.

bayview
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Re: What Percentage CASH are you?

Post by bayview » Sun May 13, 2018 2:20 am

AtlasShrugged? wrote:
Wed May 09, 2018 7:38 am
Why do you do this?
munemaker....You ask a fair question; I shall answer...
I don't know if this is the source of munemaker's amazement, but it is the source of mine: a home safe (with or without handguns) containing paper cash is horribly vulnerable to fire/ heat/ water damage from attempts to put out the fire.

I can certainly understand the decision to keep much of your wealth in cash, but physical bills in a home safe seems unbelievably risky to me.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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AtlasShrugged?
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Re: What Percentage CASH are you?

Post by AtlasShrugged? » Sun May 13, 2018 5:32 am

I can certainly understand the decision to keep much of your wealth in cash, but physical bills in a home safe seems unbelievably risky to me.
bayview....We'll take our chances. It has worked out just fine, so far. No fires. No floods. Nobody shot. I'm not particularly concerned. :happy

Over time, we're transitioning into a taxable account. I figure ~3 years for the bulk to be moved over. DW and I talk. We heal more. I don't know if we will ever truly be 'over it', but like I said - we have each other, and we got through it. We live quietly, below our means. We have a plan. We are comfortable with it. We are executing it. :moneybag
“If you don't know, the thing to do is not to get scared, but to learn.”

Stick5vw
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Re: What Percentage CASH are you?

Post by Stick5vw » Sun May 13, 2018 5:54 am

We have 6 months of expenses as our emergency account, and right now besides that have about 5% of portfolio in cash.

Normally would be about 0% in cash, but there are a few potential expenses coming up later this year and we'd rather not dip into the emergency fund for these.
Last edited by Stick5vw on Sun May 13, 2018 7:19 am, edited 1 time in total.

sesq
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Re: What Percentage CASH are you?

Post by sesq » Sun May 13, 2018 6:08 am

I just clawed out of 8 months of unemployment so I am planning to set it at a years worth of expenses. Which on an after tax basis (I accrue capital gain tax and tax on tax deferred accounts) will be about 8% in cash, 20% bonds, 25% International equities 45% domestic equities and 2% company stock. I tend to lump cash and bonds together and I am angling for a 30% allocation to the pair, with a year of expenses in cash. My portfolio isn't on an IPS and there is a lot of flux in it right now with recent unemployment, moving for a new job (upcoming house sale and purchase), and what not. I have to decide how much of a mortgage I want to carry since the new place is in a higher cost of living area and we will have about a 15% more expensive house. I had the mortgage paid off but I am concerned that to do that in the new place would be a hit to my taxable accounts. I am going to take a mortgage and then figure it out over a few months once we settle in.

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Sheepdog
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Re: What Percentage CASH are you?

Post by Sheepdog » Sun May 13, 2018 7:18 am

Age 84+..15.7% cash and cash equivalents. (Cash equivalents include short term bonds, fixed term SPIAs, and CDs coming due within a year.) If I were to include I bonds, it would be 36%
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

minimalistmarc
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Re: What Percentage CASH are you?

Post by minimalistmarc » Sun May 13, 2018 8:19 am

About 0.5% but looking to increase that to 5%.

My reason is that I have 2 young kids under 4 and a wife and I'm thinking I should keep a "safe pot" aside for their benefit rather than just sticking to my own desire of 100% invested in assets.

minimalistmarc
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Re: What Percentage CASH are you?

Post by minimalistmarc » Sun May 13, 2018 8:21 am

Plainviews wrote:
Mon May 07, 2018 10:20 am
Highest number loses right?

I'm sitting at about 80% cash, and this is coming from someone who preaches 3 fund to anyone who asks.

My retirement account is almost all 3 fund. Taxable had some cash already, but with a sale of a house 6 months ago, I'm sitting at 80% cash overall. I know in principle, now is the best time to enter the market. I also know to DCA when you just can't bite the bullet.

That said, we're on year 10 of a bull market, and I rationalize that even if it continues to rise, how much can it really? I'm not trying to catch the bottom, but I don't think we're too far from the top. I wish I had a better plan, but it's currently a wait and see.

I do look forward to the moment that I put all this cash into the 3 fund, then I can relax and zone out and focus on more important things.
Good news, that moment is now. And if not now, then tomorrow is fine too :) :sharebeer

minimalistmarc
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Re: What Percentage CASH are you?

Post by minimalistmarc » Sun May 13, 2018 8:24 am

mikebee wrote:
Tue May 08, 2018 2:54 pm
100 % Cash (prime money market)
Two houses, 3 cars all paid for. Zero debt.
Made a bundle earlier this year by market timing. Dont want to make any more as I would get into highest tax bracket, amt, extortionate medicare premiums etc
Made a bundle in 2009 by timing.
Both pure luck of course.
Now very nervous. Waiting for S&P to go down to 2600 and 10 year to hit 4% then I will go 50% in Vanguard Total Stock Market and 50% into High Yield Corporate Bond.
Then hanging up my boots, I will be done with investing until I die.
I bet you don't lol

btenny
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Re: What Percentage CASH are you?

Post by btenny » Sun May 13, 2018 11:25 am

Retired going on 19 years. Definitely an old guy now but planning on a lot more good years. Have lived through 2 very big recessions in retirement and cash was king both times. I keep about 8% in cash in various accounts. This is 2+ years spending money plus our SS and pensions. I spend out of this pile as needed and rebalance about once a year. I also fund big expenses (new car, house updates, cruise vacations, etc.) as needed from this money. I also keep 7% in limited term muni funds that can be used as desired to purchase stocks or fund special medical bills or buy anything I want with no tax or portfolio risk.

Good Luck.

md&pharmacist
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Re: What Percentage CASH are you?

Post by md&pharmacist » Sun May 13, 2018 5:45 pm

Plainviews wrote:
Mon May 07, 2018 10:20 am
Highest number loses right?

I'm sitting at about 80% cash, and this is coming from someone who preaches 3 fund to anyone who asks.

My retirement account is almost all 3 fund. Taxable had some cash already, but with a sale of a house 6 months ago, I'm sitting at 80% cash overall. I know in principle, now is the best time to enter the market. I also know to DCA when you just can't bite the bullet.

That said, we're on year 10 of a bull market, and I rationalize that even if it continues to rise, how much can it really? I'm not trying to catch the bottom, but I don't think we're too far from the top. I wish I had a better plan, but it's currently a wait and see.

I do look forward to the moment that I put all this cash into the 3 fund, then I can relax and zone out and focus on more important things.
Plainsview, you have a great plan!

I'm at 50% of investable liquid assets, or 15% of my total NW in the markets. I'm decreasing my exposure further by selling into the market euphoria (high).

Buying now is buying high and hoping to get lucky enough to sell higher when you have to sell. Doesn't make sense to me either.

Although, rather than a 3 passive fund portfolio, after the next major correction stabilizes risk is relatively very low (think 2009), and I will buy the best active/leveraged index funds for better returns (thinking technology, healthcare, Nasdaq). The passive 3 fund portfolio seems best to me in the mid phase of a bull run (about 5 years) as risk/reward normalizes then cutting exposure as you did approaching the 9th/10th year of a bull run.

Nicolas
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Re: What Percentage CASH are you?

Post by Nicolas » Sun May 13, 2018 7:48 pm

I'm no percentage CASH. I'm 100% human. However I'm currently holding about 2.8% cash.

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Sandtrap
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Re: What Percentage CASH are you?

Post by Sandtrap » Sun May 13, 2018 8:22 pm

Sheepdog wrote:
Sun May 13, 2018 7:18 am
Age 84+..15.7% cash and cash equivalents. (Cash equivalents include short term bonds, fixed term SPIAs, and CDs coming due within a year.) If I were to include I bonds, it would be 36%
Okay.
I thought I was the odd dog with 15.2% not including bond funds.

aloha :D
jim

KeepItSimple78
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Re: What Percentage CASH are you?

Post by KeepItSimple78 » Mon May 14, 2018 8:27 pm

OP,

Sticking strictly to retirement accounts - 8% cash (most of the 8% in tax-deferred accounts, small amount in ROTH). I, similarly, like having a little "dry powder" as you called it.

If I chose to do something with this money today, I would probably add to my bond allocations as they are currently under target weight.
Avid reader of personal finance/investing literature; however, no formal training in this area. My comments are always well-intended, and most often well-informed.

bling
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Re: What Percentage CASH are you?

Post by bling » Mon May 14, 2018 9:50 pm

as close to 0% as possible.

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