Too much cash is making me panic

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Topic Author
sergio
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Joined: Sat Jun 20, 2015 6:52 pm

Too much cash is making me panic

Post by sergio »

We have about $125k in cash. This is about 1.5 years worth of expenses. When it was earning 1.5-2% I was okay holding the cash. After re-examining our expenses, $100k would be more than enough for 1.5 years worth of expenses and I'm considering what to do with the extra $25k which is now only earning 0.8% and will likely earn less.

1. Put it towards the mortgage? We have 12 years left on a 15 years @3.25%, balance of approx $164k. Putting down $25k extra principal this month would lower the total interest by $10k and shave off more than 2 years on the loan. Upside: guaranteed interest savings, extra equity could hypothetically be tapped through a HELOC, cash out re-fi, or recouped when the house sold. Downside: 3.25% is "cheap" and since the house wouldn't be paid off with the $25k, we wouldn't real "feel" the positive effects of the $25k extra payment for some time.

2. Put it into our taxable account (80/20 US/Int'l Index funds). Upside: Ability to earn a lot going forward, can be sold overnight if the money is urgently needed down the road. Downside: Equities are insanely high right now, huge hit if sold during a downturn.

3. Put it into an 12-month CD earning about 1% to protect against further rate decreases.

4. TIPS/I-bonds: Don't know anything about these, will study tonight and tomorrow.

The only other thing I can think of is putting the $25k in our kids' 529s (meh).

Anyone have any other ideas - am I rationalizing this correctly? Thanks!
delamer
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Re: Too much cash is making me panic

Post by delamer »

Job security is the unknown factor.

For most people in most times, 1.5 years of expenses is a large emergency fund.

But these are very uncertain times, and you haven’t said anything about your job’s (or your spouse’s) security.
artgerst
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Re: Too much cash is making me panic

Post by artgerst »

I'd say #1. Paying off your mortgage is a solid investment. There's also an emotional feeling that is typically under-represented. When you pay off your mortgage partially and certainly fully, you have a great feeling about it that is worth more than any investment comparison.
Topic Author
sergio
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Re: Too much cash is making me panic

Post by sergio »

delamer wrote: Sat Aug 15, 2020 1:05 pm Job security is the unknown factor.

For most people in most times, 1.5 years of expenses is a large emergency fund.

But these are very uncertain times, and you haven’t said anything about your job’s (or your spouse’s) security.
Job security is fairly high. Wife currently doesn't work. We have no car loans, student loans, CC debt, or anything else. We also have $45k in a taxable account and $40k in our HSA's as further reinforcements if absolutely needed.
SnowBog
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Re: Too much cash is making me panic

Post by SnowBog »

Do you "need" the cash? If not, are you on track to maximize your available tax-deferred space such as 401k? If not, you might consider spending down the savings to increase your contributions. Getting more money into a tax advantaged account is usually a good idea.

If you want to keep it cash like, when do you expect to need the money?

If you can find a good rate on a CD, probably your best option in the short term.

If you value safety, and have a longer horizon...

I Bonds might be an option, they are like cash (value isn't volatile like TIPS), and basically are designed to track inflation. You aren't going to get rich, but in theory you aren't going to lose money either. (And the expectations is I Bonds won't have a negative rate, unlike TIPS which can have a negative rate.) while the rate right now isn't great, the rate changes every 6 months, so if interest rates jump in 3 years, they'll start earning more money following what the rates are doing (with up to that 6 month delay).

EE Bonds might be an option as well, but for these to make sense you basically have to commit to holding them for 20 years, after which they are guaranteed to double (providing something like a guaranteed 3.5% interest rate). But if you don't hold for 20 years, the interest rate is currently something like an abysmal 0.1%.

Both are only available through the TreasuryDirect website, have a limit of $10k per person/year each (another $5/year as part of tax refunds possible), so they aren't without their complexities.

If I recall, you minimally need to hold both 1 year before you can sell. If you sell before 5 years, you'll lose 3 months of interest as a penalty. After 5 years, no penalty. So they can end up making a nice 2nd tier of an emergency fund. And if a better rate comes along (after the first year), you can sell and move to a better option.

Both are also essentially a way to expand your tax-deferred space, as the interest accrues but you don't recognize it (or pay taxes) until you sell. (You have the option to pay taxes annually, but I'm not sure why you would...)

Personally, I just started purchasing both this year for myself and spouse. The EE Bonds will effectively be used as a "build my own annuity" for 20 years from now, helping to delay SS & pensions until 70. The I Bonds will eventually take over my emergency funds, and will also be used to help bridge until delayed SS & pensions. I won't get rich off them, but they serve the purpose I wanted.
7eight9
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Re: Too much cash is making me panic

Post by 7eight9 »

They may or may not be applicable in your situation but multi-year guaranteed annuities (MYGAs) are affording respectable interest rates these days.

Example --- Fixed Annuity Rates for August 2020 ---https://www.blueprintincome.com/fixed-annuities

Five year rates as high as 3.45% per above link.
I guess it all could be much worse. | They could be warming up my hearse.
Topic Author
sergio
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Re: Too much cash is making me panic

Post by sergio »

SnowBog wrote: Sat Aug 15, 2020 1:25 pm Do you "need" the cash? If not, are you on track to maximize your available tax-deferred space such as 401k? If not, you might consider spending down the savings to increase your contributions. Getting more money into a tax advantaged account is usually a good idea.

If you want to keep it cash like, when do you expect to need the money?

If you can find a good rate on a CD, probably your best option in the short term.

If you value safety, and have a longer horizon...

I Bonds might be an option, they are like cash (value isn't volatile like TIPS), and basically are designed to track inflation. You aren't going to get rich, but in theory you aren't going to lose money either. (And the expectations is I Bonds won't have a negative rate, unlike TIPS which can have a negative rate.) while the rate right now isn't great, the rate changes every 6 months, so if interest rates jump in 3 years, they'll start earning more money following what the rates are doing (with up to that 6 month delay).

EE Bonds might be an option as well, but for these to make sense you basically have to commit to holding them for 20 years, after which they are guaranteed to double (providing something like a guaranteed 3.5% interest rate). But if you don't hold for 20 years, the interest rate is currently something like an abysmal 0.1%.

Both are only available through the TreasuryDirect website, have a limit of $10k per person/year each (another $5/year as part of tax refunds possible), so they aren't without their complexities.

If I recall, you minimally need to hold both 1 year before you can sell. If you sell before 5 years, you'll lose 3 months of interest as a penalty. After 5 years, no penalty. So they can end up making a nice 2nd tier of an emergency fund. And if a better rate comes along (after the first year), you can sell and move to a better option.

Both are also essentially a way to expand your tax-deferred space, as the interest accrues but you don't recognize it (or pay taxes) until you sell. (You have the option to pay taxes annually, but I'm not sure why you would...)

Personally, I just started purchasing both this year for myself and spouse. The EE Bonds will effectively be used as a "build my own annuity" for 20 years from now, helping to delay SS & pensions until 70. The I Bonds will eventually take over my emergency funds, and will also be used to help bridge until delayed SS & pensions. I won't get rich off them, but they serve the purpose I wanted.
Awesome post - thanks! Yes, 401k + 2 Roths + HSA are maximized, and we put $3k into each kids' 529 each year. We already have out 2021 Roths and 529 earmarked apart from the emergency fund. Thanks for point out EE bonds as well, I'm targeting retirement in 18-22 years so a 20 year duration lines up nicely! I will research I Bonds and TIPS more in depth, but I bonds seem nice.
Lee_WSP
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Re: Too much cash is making me panic

Post by Lee_WSP »

I'd personally do I-bonds before mortgage. $25k isn't going to tip the scales one way or another in the context of 30 years of BH savings levels.
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anon_investor
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Re: Too much cash is making me panic

Post by anon_investor »

Lee_WSP wrote: Sat Aug 15, 2020 2:42 pm I'd personally do I-bonds before mortgage. $25k isn't going to tip the scales one way or another in the context of 30 years of BH savings levels.
+1 on the I Bonds.
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LilyFleur
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Re: Too much cash is making me panic

Post by LilyFleur »

Perhaps you could classify this as a "mini-panic"? Give yourself a pat on the back--you are doing very well overall.
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Watty
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Re: Too much cash is making me panic

Post by Watty »

sergio wrote: Sat Aug 15, 2020 12:56 pm 1. Put it towards the mortgage? We have 12 years left on a 15 years @3.25%, balance of approx $164k. Putting down $25k extra principal this month would lower the total interest by $10k and shave off more than 2 years on the loan.
If you decide to pay down the mortgage then call your lender and ask if they will "recast your mortgage"(Google this) they are not required to but they usually will for a couple of hundred dollar processing fee or even for free. The way this works is that if you pay your loan down by 15% (or whatever makes sense) then your required mortgage payment will be reduced by the same percentage. The interest rate and length of the loan would stay the same. This could be handy if something happens like you are laid off or interest rates go up a lot but you could still keep making the same mortgage payment to have it paid off 2+ years early.

This would also reduce your required monthly expenses so you would need less money to have a years expenses in cash.
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Watty
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Re: Too much cash is making me panic

Post by Watty »

Lee_WSP wrote: Sat Aug 15, 2020 2:42 pm I'd personally do I-bonds before mortgage. $25k isn't going to tip the scales one way or another in the context of 30 years of BH savings levels.
If iBonds are appropriate then the OP has the other $100K that they could use to buy iBonds.
Lee_WSP
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Re: Too much cash is making me panic

Post by Lee_WSP »

Watty wrote: Sat Aug 15, 2020 2:54 pm
Lee_WSP wrote: Sat Aug 15, 2020 2:42 pm I'd personally do I-bonds before mortgage. $25k isn't going to tip the scales one way or another in the context of 30 years of BH savings levels.
If iBonds are appropriate then the OP has the other $100K that they could use to buy iBonds.
You can onky buy 20k per year without using your tax refund. But yes, the rest of the e fund that isn't needed for liquidity should go to i bonds or a higher yielding asset. Although that's 10k ibond and 10k ee.

HOWEVER, OP only said he/she is comfortable with parting with 25k. Anything more is beyond the scope of my involvement.
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Clever_Username
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Re: Too much cash is making me panic

Post by Clever_Username »

I would definitely go with Series I Bonds.

Depending on how large your taxable savings is, you may want to reconsider how much of an emergency fund you need in cash. Given how excess cash is making you feel, take some notes and think about this in six months or a year : don't make a sudden change in asset allocation.

I would encourage you to buy some Series I savings bonds this month -- and then consider buying more in 2021 (there's an annual limit to how much you can buy). I consider mine to be an early tier in my emergency plan (different from a distinct fund).
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.
000
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Re: Too much cash is making me panic

Post by 000 »

You're not off base to worry. I am concerned that cash (fixed income in general actually) will not retain purchasing power.
Notsobad
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Re: Too much cash is making me panic

Post by Notsobad »

1) open a taxable account and choose investments to keep your desired asset allocation.
2) front load the 529 plans. You can deposit up 30K per child in a year. By contributing now, you can let it ride and skip contributions when they are older. All of that depends on how much you are aiming to have once they reach college age
3) all of the above: make some extra mortgage payment, buy some bonds, etc.
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celia
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Re: Too much cash is making me panic

Post by celia »

Too much cash is making you panic???

What if you had too little cash, such as only $25K which would appear to be less than 4 months expenses for you? Or imagine you only had $2,500 in cash.

I'd suggest waiting until the end of 2021 to see if the world settles down and there aren't so many unknowns in life.
Topic Author
sergio
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Re: Too much cash is making me panic

Post by sergio »

000 wrote: Sat Aug 15, 2020 4:10 pm You're not off base to worry. I am concerned that cash (fixed income in general actually) will not retain purchasing power.
This is what worries me the most. If inflation picks up to 2-3% and Savings/CDs/gov't bonds are basically paying 0, that's a huge loss in purchasing power each year!
000
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Re: Too much cash is making me panic

Post by 000 »

sergio wrote: Sat Aug 15, 2020 4:21 pm
000 wrote: Sat Aug 15, 2020 4:10 pm You're not off base to worry. I am concerned that cash (fixed income in general actually) will not retain purchasing power.
This is what worries me the most. If inflation picks up to 2-3% and Savings/CDs/gov't bonds are basically paying 0, that's a huge loss in purchasing power each year!
I personally am not optimistic on any fixed income right now.
Topic Author
sergio
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Re: Too much cash is making me panic

Post by sergio »

Notsobad wrote: Sat Aug 15, 2020 4:12 pm 1) open a taxable account and choose investments to keep your desired asset allocation.
2) front load the 529 plans. You can deposit up 30K per child in a year. By contributing now, you can let it ride and skip contributions when they are older. All of that depends on how much you are aiming to have once they reach college age
3) all of the above: make some extra mortgage payment, buy some bonds, etc.
That's one approach I was thinking of taking - $10k in taxable (or 529s), $10k in bonds, $5k towards the mortgage...
djeayzonne
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Re: Too much cash is making me panic

Post by djeayzonne »

I was recently in the same situation.
I was also ok with it in savings at 2% , but I feel like having a bunch of cash sitting around not working for me is extremely inefficient and thus unacceptable.

I know this won't have much favor here, but what I decided to do was park the cash in my taxable account, keep it as cash, but use it as margin for ES and ZN futures (SP500 and 10-year treasuries) just to get a little more exposure at 1.5:1 leverage on the equity side.

This means that significantly more cash than what is needed for margin requirements is in there. Half of it is actually just cash and half is in a cash-equivalent fund (I went with ICSH).

Is it risky? At first glance, it's riskier than unleveraged, but:
1. ZN is simply there for some risk parity and it's cheap to hold.
2. Significant cash significantly helps maintain portfolio value during down periods.
3. Margin loans can save temporarily save the day if the market goes down so much that I really cannot satisfy margin requirements.
4. I believe that sequence of return risk is more of a risk during accumulation than after retirement, so this is a solution to mitigating that massive risk.

Normally, it would seem inefficient to have that much cash uninvested in an investment account, but if it's cash you are just going to have sitting around anyway....
wootwoot
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Re: Too much cash is making me panic

Post by wootwoot »

You're panicking about having too much cash? Especially at a time with so many out of work? Feel free to donate to one of the many charities helping those who are less fortunate than yourself.
lazynovice
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Re: Too much cash is making me panic

Post by lazynovice »

In your position, we paid down our mortgage.
grettman
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Re: Too much cash is making me panic

Post by grettman »

lazynovice wrote: Sat Aug 15, 2020 5:14 pm In your position, we paid down our mortgage.
+1
Shorty
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Re: Too much cash is making me panic

Post by Shorty »

Pay down the mortgage. +1

I was in a similar scenario a few years ago. I know you only asked about $25k, so take it for what it is. I will tell you that once you get within striking range, paying off the entire mortgage is fantastic on the cash flow and an emotional victory. I'm assuming no other debt and maximizing tax sheltering investment already. Obviously depends on many factors: job security, risk tolerance, how much you're saving, how frugal you are currently, and family obligations. Also, option for DW to work in a pinch. We paid $85k of $100k that we had in the bank toward about a $130k remaining balance, then went on a "sprint"/"fast" to pay the rest the following year. We retained many of the habits and the bank accounts recovered quickly, to the point of having the same "problem" again before we knew it. Obviously, YMMV and the COVID environment adds a degree of uncertainty. However, I'd pay the $25k and consider a "sprint" when you're in a position to do it comfortably. It may help to look at an amortization table and see how much "time" you jumped and the difference of your fixed payment going to principal versus interest. I assume you're taking a standard deduction and tax differences aren't a factor as well.

Another option at that asset level are games with bonuses with bank accounts, credit cards, and/or brokerage accounts. You need an overall plan and to think through your end state(s). Benefit depends on your current spending habits and discipline. Banks do ~$350-375 bonuses for $100k or about $250 for $50k after 90 days. The accounts also have very nice benefits. Chase offers Ultimate Reward (UR) points that go well with their credit cards (lots of value, depending on your spend). They offer free wire transfers and international cash withdrawals at the exchange rate (unheard of) starting at their Sapphire banking rate (free with $75k at Chase). Bank of America offers amazing cash back rates on credit cards (2.625-5.25% back) if your BofA assets are at the $50k or $100k tiers (ROTH IRA through Merrill counts, I don't think 401k works with either). I was able to get nice bonuses on the banking side (Chase) and brokerage side with both, which translate to a much higher percentage than current guaranteed returns. $50-200k is about the sweet spot. Less money and the bonuses aren't there, more money and you're probably wasting your time. For me the Chase brokerage account was a nice way to slowly start taxable investment (VFIAX/VTSAX), shifting from bank to brokerage. I attacked things in the following general order: e-fund, debt, tax sheltered investment, huge e-fund, mortgage (aggressive), build cash back up, bank/brokerage bonuses, taxable investment. Because BofA counts ROTH IRA and Chase YouInvest, I was able to keep both statuses without tying up much money at their crappy interest rates. Either or both of those may or may translate to value to you especially if you travel (non-COVID) and/or get work reimbursements for spending.

This is all beside the point that many people consider 3.25% "cheap" and would rather leverage other investments or have the money ready for an opportunity to risk it. It sounds like you're not in that camp. The tension in my household is between me wanting to invest more and DW wanting a larger emergency fund, which has scaled with our assets so far :-).
Topic Author
sergio
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Re: Too much cash is making me panic

Post by sergio »

Shorty wrote: Sat Aug 15, 2020 6:17 pm Pay down the mortgage. +1

I was in a similar scenario a few years ago. I know you only asked about $25k, so take it for what it is. I will tell you that once you get within striking range, paying off the entire mortgage is fantastic on the cash flow and an emotional victory. I'm assuming no other debt and maximizing tax sheltering investment already. Obviously depends on many factors: job security, risk tolerance, how much you're saving, how frugal you are currently, and family obligations. Also, option for DW to work in a pinch. We paid $85k of $100k that we had in the bank toward about a $130k remaining balance, then went on a "sprint"/"fast" to pay the rest the following year. We retained many of the habits and the bank accounts recovered quickly, to the point of having the same "problem" again before we knew it. Obviously, YMMV and the COVID environment adds a degree of uncertainty. However, I'd pay the $25k and consider a "sprint" when you're in a position to do it comfortably. It may help to look at an amortization table and see how much "time" you jumped and the difference of your fixed payment going to principal versus interest. I assume you're taking a standard deduction and tax differences aren't a factor as well.

Another option at that asset level are games with bonuses with bank accounts, credit cards, and/or brokerage accounts. You need an overall plan and to think through your end state(s). Benefit depends on your current spending habits and discipline. Banks do ~$350-375 bonuses for $100k or about $250 for $50k after 90 days. The accounts also have very nice benefits. Chase offers Ultimate Reward (UR) points that go well with their credit cards (lots of value, depending on your spend). They offer free wire transfers and international cash withdrawals at the exchange rate (unheard of) starting at their Sapphire banking rate (free with $75k at Chase). Bank of America offers amazing cash back rates on credit cards (2.625-5.25% back) if your BofA assets are at the $50k or $100k tiers (ROTH IRA through Merrill counts, I don't think 401k works with either). I was able to get nice bonuses on the banking side (Chase) and brokerage side with both, which translate to a much higher percentage than current guaranteed returns. $50-200k is about the sweet spot. Less money and the bonuses aren't there, more money and you're probably wasting your time. For me the Chase brokerage account was a nice way to slowly start taxable investment (VFIAX/VTSAX), shifting from bank to brokerage. I attacked things in the following general order: e-fund, debt, tax sheltered investment, huge e-fund, mortgage (aggressive), build cash back up, bank/brokerage bonuses, taxable investment. Because BofA counts ROTH IRA and Chase YouInvest, I was able to keep both statuses without tying up much money at their crappy interest rates. Either or both of those may or may translate to value to you especially if you travel (non-COVID) and/or get work reimbursements for spending.

This is all beside the point that many people consider 3.25% "cheap" and would rather leverage other investments or have the money ready for an opportunity to risk it. It sounds like you're not in that camp. The tension in my household is between me wanting to invest more and DW wanting a larger emergency fund, which has scaled with our assets so far :-).
Thanks Shorty - inspirational stuff. $25k of extra principal knocks the length of the mortgage down to <10 years. Already max out all tax-advantaged accounts, and even have $12k earmarked for next years Roths apart from the $125k in question.

While 3.25% is cheap - I'll gladly take it over the 0.8% I'm getting now, as long as I have a large enough eFund.

I actually only need to get my mortgage down to $35k to effectively pay it off, as $35k of my eFund is earmarked for 18 months of mortgage payments.
Shorty
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Re: Too much cash is making me panic

Post by Shorty »

Very nice! Don’t forget that property tax and possibly homeowners insurance is rolled into your mortgage payment. Still, way better once you get that knocked out!
Ed 2
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Re: Too much cash is making me panic

Post by Ed 2 »

sergio wrote: Sat Aug 15, 2020 4:21 pm
000 wrote: Sat Aug 15, 2020 4:10 pm You're not off base to worry. I am concerned that cash (fixed income in general actually) will not retain purchasing power.
This is what worries me the most. If inflation picks up to 2-3% and Savings/CDs/gov't bonds are basically paying 0, that's a huge loss in purchasing power each year!
Why worry? We have almost zero inflation this year and who knows maybe deflation years following. I Bond’s only the best option at this point for you if you prefer not to have exposure to equity’s more than you have.
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susa
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Re: Too much cash is making me panic

Post by susa »

sergio wrote: We have about $125k in cash. This is about 1.5 years worth of expenses. When it was earning 1.5-2% I was okay holding the cash.
We park about same with Affirm which is still paying us tax free 1.30% interest. No sweat
vtjon02
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Re: Too much cash is making me panic

Post by vtjon02 »

sergio wrote: Sat Aug 15, 2020 7:36 pm
Shorty wrote: Sat Aug 15, 2020 6:17 pm Pay down the mortgage. +1

I was in a similar scenario a few years ago. I know you only asked about $25k, so take it for what it is. I will tell you that once you get within striking range, paying off the entire mortgage is fantastic on the cash flow and an emotional victory. I'm assuming no other debt and maximizing tax sheltering investment already. Obviously depends on many factors: job security, risk tolerance, how much you're saving, how frugal you are currently, and family obligations. Also, option for DW to work in a pinch. We paid $85k of $100k that we had in the bank toward about a $130k remaining balance, then went on a "sprint"/"fast" to pay the rest the following year. We retained many of the habits and the bank accounts recovered quickly, to the point of having the same "problem" again before we knew it. Obviously, YMMV and the COVID environment adds a degree of uncertainty. However, I'd pay the $25k and consider a "sprint" when you're in a position to do it comfortably. It may help to look at an amortization table and see how much "time" you jumped and the difference of your fixed payment going to principal versus interest. I assume you're taking a standard deduction and tax differences aren't a factor as well.

Another option at that asset level are games with bonuses with bank accounts, credit cards, and/or brokerage accounts. You need an overall plan and to think through your end state(s). Benefit depends on your current spending habits and discipline. Banks do ~$350-375 bonuses for $100k or about $250 for $50k after 90 days. The accounts also have very nice benefits. Chase offers Ultimate Reward (UR) points that go well with their credit cards (lots of value, depending on your spend). They offer free wire transfers and international cash withdrawals at the exchange rate (unheard of) starting at their Sapphire banking rate (free with $75k at Chase). Bank of America offers amazing cash back rates on credit cards (2.625-5.25% back) if your BofA assets are at the $50k or $100k tiers (ROTH IRA through Merrill counts, I don't think 401k works with either). I was able to get nice bonuses on the banking side (Chase) and brokerage side with both, which translate to a much higher percentage than current guaranteed returns. $50-200k is about the sweet spot. Less money and the bonuses aren't there, more money and you're probably wasting your time. For me the Chase brokerage account was a nice way to slowly start taxable investment (VFIAX/VTSAX), shifting from bank to brokerage. I attacked things in the following general order: e-fund, debt, tax sheltered investment, huge e-fund, mortgage (aggressive), build cash back up, bank/brokerage bonuses, taxable investment. Because BofA counts ROTH IRA and Chase YouInvest, I was able to keep both statuses without tying up much money at their crappy interest rates. Either or both of those may or may translate to value to you especially if you travel (non-COVID) and/or get work reimbursements for spending.

This is all beside the point that many people consider 3.25% "cheap" and would rather leverage other investments or have the money ready for an opportunity to risk it. It sounds like you're not in that camp. The tension in my household is between me wanting to invest more and DW wanting a larger emergency fund, which has scaled with our assets so far :-).
Thanks Shorty - inspirational stuff. $25k of extra principal knocks the length of the mortgage down to <10 years. Already max out all tax-advantaged accounts, and even have $12k earmarked for next years Roths apart from the $125k in question.

While 3.25% is cheap - I'll gladly take it over the 0.8% I'm getting now, as long as I have a large enough eFund.

I actually only need to get my mortgage down to $35k to effectively pay it off, as $35k of my eFund is earmarked for 18 months of mortgage payments.
If you are concerned about inflation paying down a low rate mortgage makes zero sense.

Buy I bonds.
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