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What % of your invest-able assets is cash in the bank? (Invest-able assets including IRAs, savings acct, 401k---none house related). I've always had a good chunk in savings but it seems like it make more sense to invest it and make more interest. Wanted to get an idea of how much everyone here has, knowing that the cash transfer into mutual funds could still be considered liquid.
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I don't think that there is really a percentage. It has to do more with what you need.
Your emergency fund is probably best kept in cash, or something with higher liquidity.
Any money in savings that you will need within the next 5 years should be kept fairly liquid. Anything not needed for 5 years or longer could be put into stocks, bonds, or mutual funds.
It all comes down to what you need. For example, I have about $6,000 in liquid savings, however you may need more.Check out my new website at www.payczech.com ! -
In the past, I've generally ran at $0, but I have a HELOC in case of emergencies. I figured why get 0% in savings when I can pay down my mortgage and get 6%?
But that's just me. In my other thread I've been advised against this though.Comment
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I agree with this - no need to try and invest your emergency fund (3-6 months of expenses). It needs to be easily accessible in case of, well, an emergency.Originally posted by dczech09 View Post
As far as percentage, that should be largely dependent on where you are financially. My liquid emergency fund is a much smaller percentage of my net worth than it used to be, and I plan for it to continue trending that direction as I increase my investments.Current Status: Traveling North American in our 1966 Airstream. Check out the remodel here.Comment
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Currently 7.5% of my overall portfolio is in cash.
That percentage changes all the time. Some of that is my EF, but some of it is just cash that I have parked at my brokerage account that I will be using to buy into some stocks soon.BrianComment
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I like to have 3-6 months in cash at all timesComment
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about 10%Comment
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I would definitely do this advice if I were on your shoes. And I would love to apply this in my life starting now. Thank you for this.Originally posted by dczech09 View PostComment
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Hi there!.. My name's Andrew and I'm new here.. I think the other users are right. It usre is better to stock a good cash for emergencies and it is good to determine your prior needs and be able to think ahead on which or particularly how much you need to invest in certain stocks or those of things that are for future needs.Comment
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As the others stated, it depends on your goals. Keeping your emergency fund in cash (3-6+ months depending on your circumstances) is best, but longer-term funds could be invested in stocks, bonds, and mutual funds. It's the mix and liquidity of those funds that can be quite variable based on your risk tolerance, goals, and overall savings you have accumulated. If you've been saving for a while, it isn't unreasonable to have 7%-20% of your portfolio in cash. Lean more toward the higher amount if you are currently living off of your portfolio, and you could err on the lower side if you are younger and still working.Comment
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None of my invest-able assets are in cash. My investments are invested and my cash is cash. My amount of cash is related to my short and mid term expenses. My amount of investments is completely unrelated to my day to day spending -- it's my long term money to which I add as much as I can in the hopes of retiring as early as possible.
So, my answer would be that I have 0% of my invest-able assets in cash. However, I also have about $20,000 in cash.Comment
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Yeah, I'll pile on and say this isn't the way to think about things. My number is 11%, but I've never thought to calculate this before and find no utility in knowing it. I just try to keep 6 mths of savings liquid, and the rest gets invested.Comment
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There is no strict percentage.
You should have an emergency fund first. If you have an emergency fund that can cover your expenses for eg.: 6 month then you can start investing the rest.
On the other hand there are investing strategies including cash or cash-like investments (money market funds, short term debt securities)...Comment
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Our family is working on getting our emergency cash built up in-case we come into a time of hardship. We plan to keep at least 30% of our investable money in the bank, with the other 70% mixed in with mutual funds, stocks, and 401k.Comment
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I agree with the idea that you need to have access to "emergency fund" cash; that does not mean that the emergency fund needs to be 100% in cash. I.E. you can invest your emergency fund in stocks/ETFs/mutual funds, if you feel that even during a worst case market scenario, you could still recover enough cash to meet your emergency fund needs.
It is true that if you needed to access your emergency fund, you might be selling at the wrong time; a market dip. But if you treat the money as truly "emergency fund", and not an "oh gees, I need some extra cash fund", this may be appropriate. Like many investing decisions, there is a personal component of risk/reward, as well as your expectations regarding the economy, your job, etc.
A key consideration for me is your expectations regarding the probability you might need the money. The lower the probability you might need the emergency fund, the more of it you can invest in liquid investments. If you are in a tenuous job situation, in an area with a bad job market, stick to cash.
Edit: to directly answer the question, my cash position is a function of my allocation model. But I do not reserve any minimum amount in cash.Last edited by violet80907; 01-05-2013, 10:48 AM.Comment
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