Cash savings vs investments
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Anonymous
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All year I’ve been dumping as much money as possible into emergency savings in fear of being laid off. I just landed a new, stable job so am much less worried about needing the cash immediately.
Right now we have about $100K sitting in a HYSA (HHI is about $300K). Retirement accounts are fully funded so no worries there but wondering if I should move any of the cash into our investment account or just leave it alone at this point (we have a little over $100K in liquid non-retirement investments right now). How much is too much to keep in cash savings? |
Anonymous
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It's very personal and only you can come up with best answer. I'd say $50k in Hysa and build it up again. Once you feel it's too much in cash, move some to investments.
I have $0 in emergency cash. Liquid investments are my emergency fund/cash. I choose from long term capital gains based on how much I want to pay in taxes. I have few other options for cash and zero chance of being laid off. |
Anonymous
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How much are your monthly expenses?
Different people have different comfort levels. I think you should have at least 6 months expenses in your emergency fund. We actually have 2 years. Keeping it in a HYSA, MMF or even short term CD ladder makes sense. |
Anonymous
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We have 2 years of expenses spread out in an HYSA, I bonds, and CDs. DH is currently furloughed and we're not counting on back pay. His job used to be the stable one but now we're not so sure. My job is subject to the whims of a large company, and the CEO might decide to replace us with AI at any moment.
We are hedging against both of us losing our jobs just as the market starts crashing. Yeah, we could be making 5-10% more on that extra year of cash expenses if the market keeps roaring, but it's not going to make a difference in our long term retirement plans, and it helps us sleep better at night. |
Anonymous
| Look, you might give up some gains by keeping it in cash right now, but this stock market rally is also seriously overdone. We’ve had a little bit of a correction this past week, but not enough. Also, the job market looks somewhat fragile right now. If I were in your shoes, I’d keep the cash in either some type of short-term bond ladder or high-yield savings account for the next year or so. When times are uncertain, it’s better to have a bigger cash buffer, especially if your monthly expenses are high. |
Anonymous
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I don’t normally believe in market timing, but the current valuations are giving me pause. I am currently 25 percent cash (hysa and ibonds) whereas I am normally 10 percent. I would be very surprised if teh stock market isn’t lower a year from now than it is today.
That said, no one really knows. I don’t think keeping it all in cash, or investing half, is a bad idea. |
Anonymous
Agree that it is very personal, but this sounds good to me. It really depends on your risk-aversion level. Expect interest rates to go down, too, though, so those HYSAs will be returning less in the near future. |
Anonymous
| Keep it right where it is. |
Anonymous
| Keep it right where it is. |
Anonymous
| We’re 10 percent cash. I’m comfortable with it as it reflects 2+ years of spend. Staying invested in the market. Yes it’s bloated and it could crash but people have been saying that for the last 3 years. In the meantime look at where NVDA is. We’ve weathered the dot com bust, 2008, covid, etc. - the market ALWAYS comes back. It might take 2-3 years but you don’t need all your millions in one fell swoop either. Stay invested. Your cash is becoming less and less valuable by the day. |
Anonymous
Leave it alone. If you are concerned about job loss, this is your emergency fund and you need easy access to it, and also cannot afford for it to become $50k |