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[quote=Anonymous]I'd dump in 4-week T-bills until the rates drop below around 3%.  Then keep $100K or whatever for liquidity and do a recast with the rest.

I'm normally a pay-off-your-mortgage person, but we're now living in a glitch in the Matrix where you can get more money by sticking your money in the bank than paying off your mortgage.  However, medium-term, I would want to use that money to do a recast so I wouldn't put it in a 401(k).  The thing that keep-your-mortgage people don't account for is cash-flow -- if you have a mortgage at 4% and 4-week T-bills are also paying 4%, ignoring tax considerations, these are not the same because the mortgage forces you to come up with more money every month than you'd be receiving in interest on the T-bills.  This is because you're also paying back principal, which, yes, is money you're paying to yourself, but still reduces your flexibility.

Most people who file bankruptcy usually do not have a permanent inability to pay their bills.  There is just something that is impacting their short-term cash flow, be it a job loss, medical problems, divorce, etc. Arguably, cash flow is as or more important than even net worth.  Keeping lots of cash on hand and driving your monthly expenses as low as possible gives you the greatest chance of long-term success (not to mention it decreases stress and increases happiness), hence the suggestion to keep $100K in cash and do a recast with the rest.[/quote]

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