Cash - Throw it all on the table!!!

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
User avatar
watchnerd
Posts: 5981
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Re: Cash - Throw it all on the table!!!

Post by watchnerd » Tue Dec 24, 2019 6:57 pm

abuss368 wrote:
Tue Dec 24, 2019 6:12 pm
How many Bogleheads have a simple savings or money market account and simply keep adding to it? No balance goal just simplicity. Over time you may have a material balance of cash at retirement.
We do, both long term and short term.

The short term is destined to be spent on wanton things, and thus outside our AA.

The long term is part of our cash AA (along with 5 year CD ladder).

Our monthly long-term contributions are 79% stock (including ESPP) / 16% bond / 5% cash.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

flaccidsteele
Posts: 449
Joined: Sun Jul 28, 2019 9:42 pm
Location: Canada

Re: Cash - Throw it all on the table!!!

Post by flaccidsteele » Tue Dec 24, 2019 7:10 pm

abuss368 wrote:
Tue Dec 24, 2019 6:12 pm
How many Bogleheads have a simple savings or money market account and simply keep adding to it? No balance goal just simplicity. Over time you may have a material balance of cash at retirement.
2 savings accounts. 1 account is “high interest” and the other pays nothing
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat

yogesh
Posts: 469
Joined: Thu Oct 11, 2012 6:20 pm

Re: Cash - Throw it all on the table!!!

Post by yogesh » Tue Dec 24, 2019 10:49 pm

In signature FDIC cash 6 month expenses, collects paychecks and pays off bills/credit cards automatically. Plan for hit by a bus situation. Goal was that heirs should be able to continue life as-is without looking at portfolio for 6 months in case of unforeseen circumstances. We did bit of role play on what DW would do under certain situations and safest bet was that her debit/credit cards and bills continued working for at least 6 months without even worrying about finance. That's the period we settled as safe emergency fund in FDIC account. Everything else goes to AA per signature.
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

User avatar
unclescrooge
Posts: 4926
Joined: Thu Jun 07, 2012 7:00 pm

Re: Cash - Throw it all on the table!!!

Post by unclescrooge » Tue Dec 24, 2019 11:13 pm

$50k in checking
$50k in short term munies
30 Oz in gold coins
100 Oz in silver coins

pascalwager
Posts: 1804
Joined: Mon Oct 31, 2011 8:36 pm

Re: Cash - Throw it all on the table!!!

Post by pascalwager » Wed Dec 25, 2019 1:38 am

watchnerd wrote:
Mon Dec 23, 2019 7:02 pm
pascalwager wrote:
Tue May 21, 2019 11:48 pm

One critic of this policy would be Javier Estrada. His portfolio studies using historical data show that keeping cash outside one's portfolio is less efficient and productive and results in more retirement failures. The use of cash isn't the main issue, but removing it from the rebalancing process reduces the purchase of more stocks in down markets.
Do you have a link to Estrada's study? Or remember the name?

We allocate 5% of our AA to cash equivalent vehicles, and rebalance in / out of it.
https://blog.iese.edu/jestrada/files/20 ... proach.pdf
Retired, pension, no SS | Bond funds: TIPS, TBM | Global stocks: total market, large value, small company, emerging market funds

User avatar
watchnerd
Posts: 5981
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Re: Cash - Throw it all on the table!!!

Post by watchnerd » Wed Dec 25, 2019 1:54 am

pascalwager wrote:
Wed Dec 25, 2019 1:38 am
watchnerd wrote:
Mon Dec 23, 2019 7:02 pm
pascalwager wrote:
Tue May 21, 2019 11:48 pm

One critic of this policy would be Javier Estrada. His portfolio studies using historical data show that keeping cash outside one's portfolio is less efficient and productive and results in more retirement failures. The use of cash isn't the main issue, but removing it from the rebalancing process reduces the purchase of more stocks in down markets.
Do you have a link to Estrada's study? Or remember the name?

We allocate 5% of our AA to cash equivalent vehicles, and rebalance in / out of it.
https://blog.iese.edu/jestrada/files/20 ... proach.pdf
Thanks, I've now read it.

I actually found the findings a little with what I've read (including here), that there is no such thing as a 'rebalancing bonus' and that rebalancing is simply restore the risk profile of the AA to its original state.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

User avatar
Topic Author
abuss368
Posts: 20128
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Cash - Throw it all on the table!!!

Post by abuss368 » Thu Dec 26, 2019 6:55 pm

unclescrooge wrote:
Tue Dec 24, 2019 11:13 pm
$50k in checking
$50k in short term munies
30 Oz in gold coins
100 Oz in silver coins
Should gold and silver be included as part of cash? The value will change (higher or lower) over time. Cash has a consistent and stable value.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

User avatar
watchnerd
Posts: 5981
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Re: Cash - Throw it all on the table!!!

Post by watchnerd » Thu Dec 26, 2019 7:08 pm

abuss368 wrote:
Thu Dec 26, 2019 6:55 pm
unclescrooge wrote:
Tue Dec 24, 2019 11:13 pm
$50k in checking
$50k in short term munies
30 Oz in gold coins
100 Oz in silver coins
Should gold and silver be included as part of cash? The value will change (higher or lower) over time. Cash has a consistent and stable value.
Ever AA book or article I've ever read puts gold, silver, and other commodities in the "Hard Assets" or "Alternative Assets" class, not cash.

For good reasons -- they have completely different correlations with other assets and move differently than cash, which has near zero correlation with anything.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

User avatar
Topic Author
abuss368
Posts: 20128
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Cash - Throw it all on the table!!!

Post by abuss368 » Thu Dec 26, 2019 7:18 pm

watchnerd wrote:
Thu Dec 26, 2019 7:08 pm
abuss368 wrote:
Thu Dec 26, 2019 6:55 pm
unclescrooge wrote:
Tue Dec 24, 2019 11:13 pm
$50k in checking
$50k in short term munies
30 Oz in gold coins
100 Oz in silver coins
Should gold and silver be included as part of cash? The value will change (higher or lower) over time. Cash has a consistent and stable value.
Ever AA book or article I've ever read puts gold, silver, and other commodities in the "Hard Assets" or "Alternative Assets" class, not cash.

For good reasons -- they have completely different correlations with other assets and move differently than cash, which has near zero correlation with anything.
Agreed.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

User avatar
unclescrooge
Posts: 4926
Joined: Thu Jun 07, 2012 7:00 pm

Re: Cash - Throw it all on the table!!!

Post by unclescrooge » Thu Dec 26, 2019 8:33 pm

abuss368 wrote:
Thu Dec 26, 2019 7:18 pm
watchnerd wrote:
Thu Dec 26, 2019 7:08 pm
abuss368 wrote:
Thu Dec 26, 2019 6:55 pm
unclescrooge wrote:
Tue Dec 24, 2019 11:13 pm
$50k in checking
$50k in short term munies
30 Oz in gold coins
100 Oz in silver coins
Should gold and silver be included as part of cash? The value will change (higher or lower) over time. Cash has a consistent and stable value.
Ever AA book or article I've ever read puts gold, silver, and other commodities in the "Hard Assets" or "Alternative Assets" class, not cash.

For good reasons -- they have completely different correlations with other assets and move differently than cash, which has near zero correlation with anything.
Agreed.
I do not count gold and silver in my net worth.

When society collapses and you need to get out of Dodge, the value sky rockets. I view these as insurance policies to get my family to safety.

I only include them because they can be redeemed for cash very quickly.

User avatar
Hat
Posts: 53
Joined: Wed Feb 10, 2010 10:27 pm

Re: Cash - Throw it all on the table!!!

Post by Hat » Thu Dec 26, 2019 11:39 pm

unclescrooge wrote:
Thu Dec 26, 2019 8:33 pm
I do not count gold and silver in my net worth.
..
I only include them because they can be redeemed for cash very quickly.
and also so we can picture you diving into your pile of coins like Scrooge McDuck? :D

User avatar
unclescrooge
Posts: 4926
Joined: Thu Jun 07, 2012 7:00 pm

Re: Cash - Throw it all on the table!!!

Post by unclescrooge » Thu Dec 26, 2019 11:46 pm

Hat wrote:
Thu Dec 26, 2019 11:39 pm
unclescrooge wrote:
Thu Dec 26, 2019 8:33 pm
I do not count gold and silver in my net worth.
..
I only include them because they can be redeemed for cash very quickly.
and also so we can picture you diving into your pile of coins like Scrooge McDuck? :D
Hopefully someday! :mrgreen:

User avatar
LadyGeek
Site Admin
Posts: 64011
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Cash - Throw it all on the table!!!

Post by LadyGeek » Fri Dec 27, 2019 10:19 pm

I removed an off-topic interchange on the use of gold as a cash equivalent. The discussion was derailed on socio-economic status.

Please stay on-topic and state your concerns in a civil, factual manner.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
Topic Author
abuss368
Posts: 20128
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Cash - Throw it all on the table!!!

Post by abuss368 » Fri Dec 27, 2019 10:20 pm

LadyGeek wrote:
Fri Dec 27, 2019 10:19 pm
I removed an off-topic interchange on the use of gold as a cash equivalent. The discussion was derailed on socio-economic status.

Please stay on-topic and state your concerns in a civil, factual manner.
Thanks! This has been an excellent thread to date with a lot of useful perspective and information.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

User avatar
Topic Author
abuss368
Posts: 20128
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Cash - Throw it all on the table!!!

Post by abuss368 » Fri Jan 31, 2020 8:44 pm

In light of many recent cash threads I thought perhaps I would dust off this thread as it includes a lot of valuable information.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

User avatar
watchnerd
Posts: 5981
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Re: Cash - Throw it all on the table!!!

Post by watchnerd » Sat Feb 01, 2020 1:33 am

abuss368 wrote:
Fri Jan 31, 2020 8:44 pm
In light of many recent cash threads I thought perhaps I would dust off this thread as it includes a lot of valuable information.
Which part?
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

User avatar
Topic Author
abuss368
Posts: 20128
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Cash - Throw it all on the table!!!

Post by abuss368 » Thu Feb 20, 2020 1:43 pm

Bogleheads:

How many folks simply have one cash account (i.e. checking, money market, etc) for cash and only one? Where everything is consolidated.

What are the pluses and minus to that strategy?

Advantages
* simplicity
* less accounts to balance and maintain
* no cash transfers needed
* easy to understand balance

Disadvanatages
* theft at ATM
* bank stops access
* low yielding - impact of inflation
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

Financologist
Posts: 202
Joined: Wed Jan 01, 2020 11:16 pm

Re: Cash - Throw it all on the table!!!

Post by Financologist » Thu Feb 20, 2020 2:10 pm

abuss368 wrote:
Thu Dec 26, 2019 6:55 pm
unclescrooge wrote:
Tue Dec 24, 2019 11:13 pm
$50k in checking
$50k in short term munies
30 Oz in gold coins
100 Oz in silver coins
Should gold and silver be included as part of cash? The value will change (higher or lower) over time. Cash has a consistent and stable value.
Has cash been a more stable store of value than gold historically? Probably could make a case for cash + gold being more stable than cash or gold alone.

User avatar
Topic Author
abuss368
Posts: 20128
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Cash - Throw it all on the table!!!

Post by abuss368 » Fri May 08, 2020 1:35 pm

Bogleheads -

Since starting this thread, we have simplified cash to one checking account and one Prime Money Market at with Vanguard.

Has anyone changed strategies with the low interest rates available?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

User avatar
1789
Posts: 1529
Joined: Fri Aug 16, 2019 3:31 pm

Re: Cash - Throw it all on the table!!!

Post by 1789 » Sun May 10, 2020 2:12 am

abuss368 wrote:
Fri May 08, 2020 1:35 pm
Bogleheads -

Since starting this thread, we have simplified cash to one checking account and one Prime Money Market at with Vanguard.

Has anyone changed strategies with the low interest rates available?
No. Same here. Checking account and a money market fund.

I don’t chase returns on my cash so i don’t care interest rates for that purpose.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

hudson
Posts: 2917
Joined: Fri Apr 06, 2007 9:15 am

Local Money Market to National High Yield Savings

Post by hudson » Sun May 10, 2020 6:06 am

abuss368 wrote:
Fri May 08, 2020 1:35 pm
Has anyone changed strategies with the low interest rates available?
I used to keep most of my "quick money" in a money market account in the same credit union with my checking account.
When the money market account went to .7%, I moved part of the "quick money" to Amex Bank at 1.5%. I tested their fast transfer. They moved cash to my checking account in the same day. I probably need to test it again.

Bottom Line: Yes...Local Money Market to National High Yield Savings

User avatar
anon_investor
Posts: 2335
Joined: Mon Jun 03, 2019 1:43 pm

Re: Cash - Throw it all on the table!!!

Post by anon_investor » Sun May 10, 2020 7:41 am

abuss368 wrote:
Fri May 08, 2020 1:35 pm
Bogleheads -

Since starting this thread, we have simplified cash to one checking account and one Prime Money Market at with Vanguard.

Has anyone changed strategies with the low interest rates available?
No real change, I have used Ally Bank HYS and no penalty CDs for some time. When Vanguard Money Market funds paid more I would keep some money there, but with such low rates now I only occasionally have money in the settlement fund for ETF purchases.

User avatar
goodenyou
Posts: 2261
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: Cash - Throw it all on the table!!!

Post by goodenyou » Sun May 10, 2020 11:43 am

I am 18% “cash” in money market accounts and checking accounts. I sold commercial real estate last year and I delayed deploying it in my AA. I am 55% stocks and 27% bonds. I haven’t decided yet if I’m going to build a house for cash yet. We are going to wait until we sell our current paid-off house first.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

User avatar
geerhardusvos
Posts: 692
Joined: Wed Oct 23, 2019 10:20 pm
Location: heavenlies

Re: Cash - Throw it on the table!

Post by geerhardusvos » Sun May 10, 2020 11:47 am

livesoft wrote:
Wed Nov 05, 2014 10:28 am
Cold hard cash: Besides some cash turds of less than $7 in various cash sweep accounts, we have only $1447.60 in the checking accounts. We are going to have to sell some equity ETFs in order to pay some bills around Thanksgiving.

I consider the investments I own to be as liquid as cash, but taxed at a lower rate. I can sell and get them into my checking account in 2 to 3 days.
+1 :sharebeer
VTSAX and chill

eldinerocheapo
Posts: 136
Joined: Thu Sep 29, 2016 1:36 pm
Location: Margaritaville

Re: Cash - Throw it all on the table!!!

Post by eldinerocheapo » Sun May 10, 2020 1:32 pm

Cash
$300 in BOA checking
$48k in ally MM

$330k in 21 staggered CD's with one maturing every month.

Why? I don't really know, but it seemed like a good idea at the time. It also helps us sleep at night knowing this is available for emergencies, funding future Roth IRA's, and a hiking trip somewhere in the Rockies next year. We have nearly 8x this amount in spread out over retirement accounts, without loading in pensions or SS.
"Do, or do not." Yoda

User avatar
anon_investor
Posts: 2335
Joined: Mon Jun 03, 2019 1:43 pm

Re: Cash - Throw it all on the table!!!

Post by anon_investor » Sun May 10, 2020 1:57 pm

eldinerocheapo wrote:
Sun May 10, 2020 1:32 pm
Cash
$300 in BOA checking
$48k in ally MM

$330k in 21 staggered CD's with one maturing every month.

Why? I don't really know, but it seemed like a good idea at the time. It also helps us sleep at night knowing this is available for emergencies, funding future Roth IRA's, and a hiking trip somewhere in the Rockies next year. We have nearly 8x this amount in spread out over retirement accounts, without loading in pensions or SS.
Why Ally MM at 0.75% vs Ally HYS at 1.5%?

UpperNwGuy
Posts: 3693
Joined: Sun Oct 08, 2017 7:16 pm

Re: Cash - Throw it all on the table!!!

Post by UpperNwGuy » Sun May 10, 2020 2:48 pm

abuss368 wrote:
Fri May 08, 2020 1:35 pm
Bogleheads -

Since starting this thread, we have simplified cash to one checking account and one Prime Money Market at with Vanguard.

Has anyone changed strategies with the low interest rates available?
I sold all my Vanguard money market holdings because of their low yield and put half in a high yield savings account and the other half in certificates of deposit at a different institution. I still have two primary checking accounts that I use regularly, and a third checking account that I use only for ATM withdrawals.

Post Reply