Cash - Throw it all on the table!!!

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

Post by AtomicCash » Tue May 14, 2019 7:20 pm

abuss368 wrote:
Fri May 10, 2019 8:24 pm
Would be interested in updated responses from Bogleheads regarding cash.
...
I wasn't on the forum for the first round of this question, but I'll chime in now.

I'm retired. I've got about 20 years living expenses in cash (about a year in my neighborhood bank, another year in high yield online accounts, and the rest in a 2 year CD ladder with about a dozen rungs so a CD matures every few months). At my age, this is probably close to a lifetime of living expenses and represents about 1/3 of my portfolio. These funds are FDIC insured and I'm currently earning about 2.6% interest as a weighted average.

The remaining 2/3rds of my portfolio is in the standard low ER boring (in a good way) Boglehead stock/bond funds appropriate for my age.

To be clear, this wasn't the asset allocation I had when I was working. But not having to worry about the markets for a couple decades lets me sleep much better at night now that I don't have any earned income.

Marc

shell921
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Re: Cash - Throw it all on the table!!!

Post by shell921 » Wed May 15, 2019 9:34 am

I'm retired and here is my breakdown:

2 checking accounts with ~$3k each - no interest, for monthly bills
1 B&M saving account with $65k
1 credit union account with $25k
$40k in brokerage acct

I keep $100 in my purse
I have $600 cash in my cash box at home

I'd say close to $137k in cash available
Last edited by shell921 on Thu May 16, 2019 11:26 am, edited 1 time in total.

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

Post by tampaite » Wed May 15, 2019 9:53 am

Deleting my messages on this forum
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Simple Simon
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Re: Cash - Throw it all on the table!!!

Post by Simple Simon » Wed May 15, 2019 3:42 pm

Having decided some years ago that I don't want bonds, I'm 50% cash, 50% VWRL in my non retirement investment accounts.

In addition I keep about 3 months of cash hand in a current account.

So quite a lot of cash here.

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

Post by SQRT » Wed May 15, 2019 4:25 pm

Answers are all over the map. Without context not much use. Can someone develop a rational list of considerations that would go into a model that might help one decide how much cash to keep? Maybe we can move the discussion up a notch?

Maybe, things like risk appetite, asset allocation, sources of regular cash flow, whether you keep cash in reserve for security purchases, stage of life/age, health insurance, lumpy/large expenses, confidence of budgeting, security of job, debt levels, etc.
Last edited by SQRT on Thu May 16, 2019 4:28 am, edited 2 times in total.

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willthrill81
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Re: Cash - Throw it all on the table!!!

Post by willthrill81 » Wed May 15, 2019 6:03 pm

Since my job is very secure (i.e. long-term contract), our mortgage should be paid off in about a year, and we are well insured on all fronts, we personally have little need for liquidity and don't keep much cash on hand. If our house burned down, we'd be about $1k. If we totaled our car, we'd be out $500. We have almost two years of our maximum out-of-pocket expense for health insurance in our HSA alone.

The biggest 'source' of cash we have is a fund used non-monthly and irregular expenses (e.g. biannual HOA dues, clothing, gifts, home and auto maintenance). But we are no longer in the position of needing X months of expenses in cash. That said, we could live for a good decade on what's in our portfolio.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

shell921
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Re: Cash - Throw it all on the table!!!

Post by shell921 » Thu May 16, 2019 11:34 am

SQRT wrote:
Wed May 15, 2019 4:25 pm
Answers are all over the map. Without context not much use. Can someone develop a rational list of considerations that would go into a model that might help one decide how much cash to keep? Maybe we can move the discussion up a notch?

Maybe, things like risk appetite, asset allocation, sources of regular cash flow, whether you keep cash in reserve for security purchases, stage of life/age, health insurance, lumpy/large expenses, confidence of budgeting, security of job, debt levels, etc.
As I said, I am retired - I have pension income, no debt & a paid off mortgage. My largest single expense in the last 4 years was solar panels-cost
was $28k. Used cash to pay for that. I need cash periodically for things like having my front and garage doors refinished every 2-3 years at a cost of about $1200. Spa repairs - sometimes can be $2000 in a year. Bought some new patio umbrellas and an area rug last year for $2000. Took a 2 week cruise a year ago-cost was $2800. Gifted a relative $14,000 in 2017.

If I want a new car, I can buy one. If I want to travel, I can. If I want to give a fancy catered party, or treat friends to meals out, or a concert, I can. If I want to gift my niece with some $$ I can do that. I like knowing I can pay for things.

acenj11
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Re: Cash - Throw it all on the table!!!

Post by acenj11 » Thu May 16, 2019 12:01 pm

I usually hold 2 months worth, enough for me to find another job if I lost my current one.

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

Post by SQRT » Fri May 17, 2019 7:13 am

After thinking about this issue a little more, it seems to me that there are basically 3 reasons to hold cash.

1) Emergency fund. This would be most important for younger people who rely on employment income. Unemployment would be their biggest risk. Often a precarious financial position that would be mitigated by having say 6 months of expenses held as cash.

2) Part of an investment strategy. This would relate to people who want their asset allocation to include some cash (or near cash) assets. Either to reduce overall risk or to allow for opportunistic equity purchases.

3)Operational needs. This would simply be the requirement to hold enough cash to allow for lumpy expenses or perhaps smooth out lumpy income like dividends. This would allow someone to cover say a car purchase, expensive trip, or health care expense, without selling non cash assets.

As a retiree, I find the third objective the most important one.

Since holding cash has an opportunity cost associated with it, it makes sense to analyze your individual needs and hold only an appropriate level of cash.
Last edited by SQRT on Sat May 18, 2019 6:00 am, edited 1 time in total.

FI4LIFE
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Re: Cash - Throw it all on the table!!!

Post by FI4LIFE » Fri May 17, 2019 7:36 am

Only 1-2 months. My HELOC is my emergency fund. I do keep some cash in retirement accounts, about 7% of assets at the moment.

Coltrane75
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Re: Cash - Throw it all on the table!!!

Post by Coltrane75 » Fri May 17, 2019 10:52 am

I have:
1. One month of expenses in a high savings FDIC insured account paying 2.1% at a credit union
2. 12 months in 4 week treasury bills paying 2.5% TEY
3. 2 months in I Bonds
4. 1 month in a Vanguard Money Market that rotates money to/fro a company ESPP account buying stocks at 15% discount and selling at settlement date.

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

Post by FrugalProfessor » Fri May 17, 2019 6:50 pm

I hold $1k of cash (specifically SPRXX yielding 2.23%) to cover checks (piano lessons, etc).

If an emergency comes up, I put it on a credit card giving me 45ish days of float, then pay for with next paycheck by temporarily ramping down savings rate.

If an emergency comes up that I can't swipe on a card, I would sell some of my brokerage account, preferably at a loss to harvest the capital loss. This has never happened to me but could be easily accomplished via a couple mouse clicks.

I've never understood emergency funds. In contrast, I understand very well the power of sizable assets (i.e. index funds) that can be liquidated at a moment's notice.
I blog. Taxes are the lowest hanging source of alpha.

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

Post by azianbob » Fri May 17, 2019 7:24 pm

I currently hold more cash than I would since I am considering buying a home soon so want to have it liquid and not suseptible to any market downturn.

Normally, I keep about $2000 in checking after I have paid all my monthly bills, then $10k in Purepoint Savings (2.35% interest) for any sudden big purchase I want to make. I keep about $100k in Purepoint No Penalty CD (2.5%) as backup for any emergencies.

Rest of taxable money is in VTI. Each month after I pay off my bills all money left over in checking other than $2000 is used to buy more VTI.

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

Post by pascalwager » Tue May 21, 2019 11:48 pm

I'm retired and have about $236k in cash, separate from my portfolio. It amounts to a few years living expenses, I guess, but that's what most advisors/authors seem to recommend for retirees. For example, Rick Ferri recommends 24 months cash expense coverage and Jonathan Clements recommends five years coverage.

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.

I can probably easily survive this possible inefficiency, but someone with a smaller margin for error might want to compare the two contrary policies before deciding to maintain a large, separate cash reserve.

If I were to change, I would probably use most of the cash to buy bond funds and keep only 2% cash in my portfolio.

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

Post by pascalwager » Wed May 22, 2019 12:10 pm

pascalwager wrote:
Tue May 21, 2019 11:48 pm
I'm retired and have about $236k in cash, separate from my portfolio. It amounts to a few years living expenses, I guess, but that's what most advisors/authors seem to recommend for retirees. For example, Rick Ferri recommends 24 months cash expense coverage and Jonathan Clements recommends five years coverage.

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.

I can probably easily survive this possible inefficiency, but someone with a smaller margin for error might want to compare the two contrary policies before deciding to maintain a large, separate cash reserve.

If I were to change, I would probably use most of the cash to buy bond funds and keep only 2% cash in my portfolio.
abuss368 wanted the whole cash story, so here's a little more:

I also keep a local bank checking account with about 5 to $10k for paying bills. This is linked to my pension and investment company main cash reserve money market fund. I do remind myself that my pension is dependent on stock market performance, so it's not as certain as SS (which I don't have).

How did I end up with such a large amount of cash? When still working, I was making the maximum contributions to my 100%-stock, tax-advantaged accounts, but still had a surplus each month. This slowly expanding surplus was kept in low-interest bank accounts and money market funds for emergency savings. Considering my very stable work situation, this cash accumulation was probably excessive and largely should have been invested in stocks. (I also have investments in taxable accounts and a variable annuity dating back to 1995 when I did a large lump-sum from T-bills to stocks.)

One final thing: financial advisors recommend ignoring low yields on cash investments and not increasing term-risk to reach for more yield. In other words, don't take any risks with your cash.

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

Post by sschoe2 » Wed May 22, 2019 12:30 pm

I keep about 1 years expenses ~$40k in a 2% savings account. Everything else is stocks with a minimal amount of bonds in my 401k Vanguard Target 2045. I have deep anxiety about how long or even if I will be able to find another decent job as a Chemist. It might involve a long job search or retraining vs taking the crappy $15-20/hour contract no benefits jobs which is the majority of what is available in my so called profession.

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

Post by peterinjapan » Wed May 22, 2019 12:47 pm

I just sold a condo in San Diego and keep $60k in my emergency fund, more than I would usually need, in case the tax bite is higher than I think it will be. Plus some cash in my trading account.

ER2023
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Re: Cash - Throw it all on the table!!!

Post by ER2023 » Thu May 23, 2019 9:38 am

CDs: $264k earning 2.8%. Enough for me at this time, but I may end up investing it later

Savings Acct: $30k

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

Post by targetconfusion » Thu May 23, 2019 9:53 am

We have ~one month's expenses in checking-account cash. Big debits inevitably sent it negative a few times a year, which triggers an automatic margin loan from the linked (Schwab) brokerage account. Then, sell however much SCHB is needed to close the shortfall. Margin loan rates are high (8 or 9% now?) but the duration of the loan is short (2-3 days) and the balance modest (a few $k) so total annual interest cost <$20.

Obvious Risk: big unexpected expense or job loss coinciding with major market implosion.
Obvious Reward: leaving more invested in equities that most of us on this forum believe tend to long-run rise.
Less Obvious Reward: not having to plan for irregular expenses.

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abuss368
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Re: Cash - Throw it all on the table!!!

Post by abuss368 » Wed May 29, 2019 8:11 pm

We are using the Vanguard Prime Money Market fund. The yield has continued to increase. Closed our savings account a long time ago.
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mule
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Re: Cash - Throw it all on the table!!!

Post by mule » Wed May 29, 2019 10:30 pm

About 17% of my portfolio is CD's and is a high 6 figure number. I have enough in cash for my year expenses for my life time. The rest is invested and most likely will never have to touch those accounts until RMD time which is 10 plus years away.

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

Post by abuss368 » Fri May 31, 2019 7:07 am

mule wrote:
Wed May 29, 2019 10:30 pm
About 17% of my portfolio is CD's and is a high 6 figure number. I have enough in cash for my year expenses for my life time. The rest is invested and most likely will never have to touch those accounts until RMD time which is 10 plus years away.
It lets one sleep well at night.
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abuss368
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Re: Cash - Throw it all on the table!!!

Post by abuss368 » Fri Jun 07, 2019 7:45 pm

Vanguard Prime Money Market is now yielding 2.39% according to the website.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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

Post by remomnyc » Fri Jun 07, 2019 9:25 pm

I retired last year with about 1 year of expenses in savings. I transfer 1 mo of expenses to checking each month and plan to replenish the savings when it is down to 2 mos of expenses from dividends, maturing CDs, or stock sales.

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

Post by Canoesmith » Fri Jun 07, 2019 11:46 pm

At the end of this year I’ll have about 7 years of expenses in cash - some will be for lumpy expenses RV, etc and the rest I’ll use along with taxable unearned income to keep under 400% poverty line for ACA subsidies. I’m making 2.2% on some, and some is in after tax investments. It’s a lot to hold on cash, but I’ve got a plan for it - so I’m happy.

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

Post by Canoesmith » Sat Jun 08, 2019 12:05 am

Is anyone buying CD’s now with all that cash? With the fed pretty much indicating they are going to lower interest rates later this year, wouldn’t now be a good time to lock in at a decent rate? Even the Ally No Penalty pays 2.3%, and it can be pulled with earnings anytime. Just curious.

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

Post by ram » Sat Jun 08, 2019 4:10 pm

Normally 30 days worth of expenses. We have 2 good reliable salaries. If you take into consideration the zero interest 30 day credit offered by credit cards then essentially we keep a zero cash balance.
We have about 200 to 500 in paper bills in the house (upper end of the range in summer for farmer's markets). Wife and I have about $50 in our wallets. In our cafeteria we have a cash line and credit card only line and 'multiple payment option' lines and we like to have the option to go to the shortest line.
Additionally I hoard cash when planning a big purchase. Example last car for 40 K.
Most likely will keep 30 days worth in checking and 17 months worth in ST bonds when I retire.
Ram

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abuss368
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Re: Cash - Throw it all on the table!!!

Post by abuss368 » Sat Jun 22, 2019 8:20 pm

Canoesmith wrote:
Sat Jun 08, 2019 12:05 am
Is anyone buying CD’s now with all that cash? With the fed pretty much indicating they are going to lower interest rates later this year, wouldn’t now be a good time to lock in at a decent rate? Even the Ally No Penalty pays 2.3%, and it can be pulled with earnings anytime. Just curious.
Never used CDs but rather money market. Never wanted to be locked in.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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

Post by Canoesmith » Sat Jun 22, 2019 11:33 pm

abuss368 wrote:
Sat Jun 22, 2019 8:20 pm
Canoesmith wrote:
Sat Jun 08, 2019 12:05 am
Is anyone buying CD’s now with all that cash? With the fed pretty much indicating they are going to lower interest rates later this year, wouldn’t now be a good time to lock in at a decent rate? Even the Ally No Penalty pays 2.3%, and it can be pulled with earnings anytime. Just curious.
Never used CDs but rather money market. Never wanted to be locked in.
Me too until now. The Ally no penalty CD - let’s me take my money with all Ive earned anytime I want - so it's not locked in and the rate is good for 11 months. With rates supposedly about to go down, seems like a good idea. We will see.

BV3273
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Re: Cash - Throw it all on the table!!!

Post by BV3273 » Mon Jun 24, 2019 7:34 am

I currently do not have any bonds in my portfolio so I guess I’m considering this emergency fund as my fixed income/bonds portion of my portfolio. To put it into perspective I’m in my early 30s.

Here’s the game plan.

60k cash (12 months of expenses) in the following forms:

15k CU Checking
- Pays 3.00% for only 15k
- The account activity requirements are doable for me

30k No Penalty CD
- Purepoint - 2.50% - 13 months

5k in VMMXX
- Currently paying 2.39%
- To DCA if necessary, but also will start loading this account up for a future car purchase

10k in iBonds
- Not concerned with yield
- Two consecutive months
- Will continue to do this until I have the full 60k in iBonds

cashisking500
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Re: Cash - Throw it all on the table!!!

Post by cashisking500 » Mon Jun 24, 2019 12:59 pm

Currently about $65,000 in savings account. We plan to use some of this to pay down our mortgage. A $30,000 e-fund seems more than sufficient for us, which represents about 6 months of expenses.

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

Post by abuss368 » Tue Jul 09, 2019 6:58 pm

Bumped
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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

Post by Ferdinand2014 » Tue Jul 09, 2019 10:14 pm

abuss368 wrote:
Wed Nov 05, 2014 1:54 pm
I wanted to also ask the forum "How many different buckets of cash do you use, if any?"

Example: Cash(Savings & Emergency), Auto Fund, Future Repairs, Once a year invoices, etc.

Thanks!
Currently $253,000 T-Bills in taxable. This is EM/Lumpy expenses. Everything else in low cost S&P 500 index funds in 403b,IRA,SEP and some taxable. IPS states $100,000 cash minimum and enough extra to sleep well, the rest in S&P 500. Keeps me from ever having to sell my equities and avoid allocation fiddling as I don’t have an allocation.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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

Post by abuss368 » Wed Jul 10, 2019 3:50 pm

Ferdinand2014 wrote:
Tue Jul 09, 2019 10:14 pm
abuss368 wrote:
Wed Nov 05, 2014 1:54 pm
I wanted to also ask the forum "How many different buckets of cash do you use, if any?"

Example: Cash(Savings & Emergency), Auto Fund, Future Repairs, Once a year invoices, etc.

Thanks!
Currently $253,000 T-Bills in taxable. This is EM/Lumpy expenses. Everything else in low cost S&P 500 index funds in 403b,IRA,SEP and some taxable. IPS states $100,000 cash minimum and enough extra to sleep well, the rest in S&P 500. Keeps me from ever having to sell my equities and avoid allocation fiddling as I don’t have an allocation.
Thanks! Actually you have an allocation and a very good one. The Warren Buffett Portfolio - S&P 500 and cash/Govt bonds.

Sleep well at night portfolio!
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invest4
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Re: Cash - Throw it all on the table!!!

Post by invest4 » Wed Jul 10, 2019 4:14 pm

* $1500 in local bank checking

* $80000 in Internet bank checking (linked to local for easy transfers).

* $150000 in internet bank CD

~$230,000 total cash

I never really considered to invest cash in anything more than CDs. I enjoy having plenty to handle any unexpected expense or when time to buy a used car, and handle all monthly expenses without giving it much thought.

With that said, I recently decided to go heavy into the Mega Backdoor Roth and fully expect to lower my overall cash position in the process. I am heavy pre-tax savings and maxing 401k and Roth annually. I take another step to increase Roth holdings...willing to make some trade off.

I don’t have a target per se as yet...but doubt I will have less than $100k still in cash for reasons mentioned above.

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

Post by Sconie » Wed Jul 10, 2019 6:41 pm

-$15K in local bank checking account
-$38K in Vanguard Prime MM & Vanguard MMM
-$141K in Incredible Bank (FDIC insured savings acct., paying approx. 2.2%)
-$36K in PenFed Premier Savings Acct and 1 Yr CD

Total is approximately $230K cash---I'm retired and this represents several years of "additional" spending, the same beyond money from DB pensions, Social Security and the like, the same which covers the majority of our spending.

Typically, our "additional" spending is taken from the above cash bucket, with it being replenished periodically via interest payments, dividends, RMDs, etc.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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abuss368
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Re: Cash - Throw it all on the table!!!

Post by abuss368 » Sat Jul 13, 2019 12:35 pm

My problem with cash over the years is at times I appreciate it, understand it does not grow much, but provides peace of minds nd hopefully keeps up with inflation. The old saying "cash is king".

The flip side it I don't care for the extra account, managing it, simplicity, and would prefer to keep whatever cash we need in a simple checking account.

I am curious how large of a balance Bogleheads keep in checking.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Ice-9
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Re: Cash - Throw it all on the table!!!

Post by Ice-9 » Sat Jul 13, 2019 1:06 pm

Our cash:

TIER 1: enough for mortgage, one month's credit cards paid in full, and the minimum to keep safe deposit box in low-interest accounts where most of our transactions actually occur

TIER 2: usually close to two months' expenses in a high-yield online savings account that we only draw from for (a) big spending months or (b) I-Bond purchases

TIER 3: close to four month's expenses in automatically reinvesting t-bills at Treasury Direct to be tapped in case of emergency

TIER 4: Additional funds in I-Bonds we hope to not need to tap until maturity

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

Post by Ferdinand2014 » Sat Jul 13, 2019 1:15 pm

abuss368 wrote:
Sat Jul 13, 2019 12:35 pm
My problem with cash over the years is at times I appreciate it, understand it does not grow much, but provides peace of minds nd hopefully keeps up with inflation. The old saying "cash is king".

The flip side it I don't care for the extra account, managing it, simplicity, and would prefer to keep whatever cash we need in a simple checking account.

I am curious how large of a balance Bogleheads keep in checking.
I keep enough for 1 month of expenses in local bank checking account. I am self employed. I pay myself monthly and electronically deposit to my personal checking after my accountant takes out taxes. The 95% of my other cash sits in my brokerage account with T-Bills and Treasury bill only money funds with no checking or debit access (on purpose) as it is only for ballast, true emergencies and occasional lumpy expenses. I define emergency as losing my house or life if I can't get money. I can EFT in 48 hours for free. All with Fidelity, which has my SEP,IRA and taxable S&P 500 funds as well. Nice and simple. I don't go chasing every last dime of interest or jump through hoops of CD ladders, etc. I keep no other fixed income.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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abuss368
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Re: Cash - Throw it all on the table!!!

Post by abuss368 » Sat Jul 13, 2019 1:21 pm

How many Bogleheads keep cash only in checking and invest the rest? If so, does it concern you that you have too much cash in checking in terms of fraud, theft, or bank errors?
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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

Post by Jablean » Sat Jul 13, 2019 3:01 pm

My local credit union should like me and I like that they let me make as many accounts as I want. After handling my mom's estate in 2017 I like having things local that transfer fast and easy to the family, getting access to inherited funds was a PITA. I was happy to have funds available to cover estate expenses as we went through probate.

-Savings - left over from a house sale - kept thinking we'd remodel this one. 20 years later no remodel but do have it paid off with some help from this account which is both in moneymarket and CDs

-Daily checking account - almost everything gets moved into and out of here
-Medical savings account - my state gives tax credit for this - used for any medical bills just like an HSA, no interest can put in 10,000 yearly if needed
-HSA for DH - putting 1000 into this every year to max out HSA as the family limit doesn't include this little known gem
-HSA for Family - learning to not use this for medical bills but to keep building it up, getting interest, may consider moving to equity firm but happy for now.
-Estate savings - opened this to do my mom's money for probate and now keeping for life insurance I received from her. Will be allocated as needed to some yearly donations in her name and additional college funds for her grandson.
-DH Business checking - contractor all money goes here first then automatic transfers into Daily
-DW Business checking - part-time contractor all money goes here then moved manually for IRS estimated taxes etc to Daily
-Escrow Checking - now since house paid off I'm moving a monthly amount into it since I have to pay taxes and insurance instead of them coming out of mortgage. Taxes in my area are rising so want to see if I'm putting aside enough.

All told the dollar amount has gone up over the years but the percent has come down and is currently at 16% of total and should cover expenses for 2+ years.
Last edited by Jablean on Mon Jul 15, 2019 11:47 pm, edited 1 time in total.

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

Post by Sandtrap » Mon Jul 15, 2019 8:47 pm

abuss368 wrote:
Sat Jul 13, 2019 1:21 pm
How many Bogleheads keep cash only in checking and invest the rest? If so, does it concern you that you have too much cash in checking in terms of fraud, theft, or bank errors?
3-4 annual expenses/years in CD's, Money Market, etc.
1 year annual expenses in cash at several business and personal accounts.

No. Not concerned about fraud, bank errors. I watch everything verrrrrwwwwy carefuwy. . . :shock:
j
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renue74
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Re: Cash - Throw it all on the table!!!

Post by renue74 » Mon Jul 15, 2019 9:06 pm

Every few months I ask myself if I'm fully "optimizing," my money. This means...all the cash I collect from tenants, any extra cash that monthly dividends out of bond funds in my taxable account, etc. (I know...I'm trying to reduce my bond exposure in taxable accounts)

So...every few months, I make sure all my cash is invested in something more than a MM or checking account. It's my miser way of optimizing the little bit of extra return. Though sometimes I do keep about $5K in cash depending on my work projects. I pay vendors in cash...in the building trades on some rehabs I do.

If I ever need cash, I know how to get it and can have it in 2-3 days.

I'm not retired...so I'm still in accumulation phase.

rupalb9
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Re: Cash - Throw it all on the table!!!

Post by rupalb9 » Mon Jul 15, 2019 9:14 pm

(n times $100K), all in MM funds equal to 10% of net worth.
It is probably too much but my wife wants this big a cushion and I choose not argue about it.

BUBear29
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Re: Cash - Throw it all on the table!!!

Post by BUBear29 » Mon Jul 15, 2019 9:47 pm

Currently at $48k in Vanguard Federal MM. This fluctuates up to $60k during year then back down to $48k with my roth ira contribution. Any cash over the $60k goes into total stock fund. I aim to keep 6months expenses ar a minimum in MM but know I have much more in my taxable mutuals if necessary.

Also have about $15k in my checking at Fidelity.
There is no dignity quite so impressive, and no one independence quite so important, as living within your means.

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

Post by Sandtrap » Mon Jul 15, 2019 11:19 pm

rupalb9 wrote:
Mon Jul 15, 2019 9:14 pm
(n times $100K), all in MM funds equal to 10% of net worth.
It is probably too much but my wife wants this big a cushion and I choose not argue about it.
+1
This factor is "huge" and not to be ignored.
j
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SQRT
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Re: Cash - Throw it all on the table!!!

Post by SQRT » Tue Jul 16, 2019 6:43 am

abuss368 wrote:
Sat Jul 13, 2019 12:35 pm

I am curious how large of a balance Bogleheads keep in checking.
Surely not an issue as most of us could transfer cash in from a savings account with a couple clicks? I keep $10-20k in checking account and usually transfer in minimum amounts of $10k. No cost for transfers.

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

Post by BSBHead » Tue Jul 16, 2019 7:12 am

This thread made me feel better as nobody has a good answer. I keep 1-3 months of expenses in checking/savings. But my fixed income/cash position is really tied up in VMMXX.

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

Post by Sandtrap » Tue Jul 16, 2019 2:04 pm

BSBHead wrote:
Tue Jul 16, 2019 7:12 am
This thread made me feel better as nobody has a good answer. I keep 1-3 months of expenses in checking/savings. But my fixed income/cash position is really tied up in VMMXX.
+1
How many years annual expenses in VMMX ???
j
Wiki Bogleheads Wiki: Everything You Need to Know

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

Post by Swarm Trap » Tue Jul 16, 2019 2:54 pm

Not less than 3x monthly expenses liquid, not more than 6x. Except that we are saving for a down payment on a house. We use a high yield savings account with an online/direct bank.

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