You have 1.2M at 32?

I do not count cash as part of my portfolio. I have cash for specific purposes such as an emergency fund or in your case buying a house. Don't invest money you might use to buy a house in the next five years because of FOMO. It's fine earning 4% while you decide what to do. You could put it in short-term T-bills and earn more and the interest will be state tax free.

10% cash is good for emergency fund, down payment savings, or just having dry powder on the sidelines in order to buy a big dip (think September 2007, March 2020, or April 2025 style downturns)

You are on a trajectory to have many millions by the time you retire. This 120k is inconsequential as far as long term investing goes.

How are you worried about money while not giving a hoot about it at the same time?
Stay in the smaller house and invest the money would be the better thing.
Since you want to buy a house and slow down the accumulation of wealth, who cares how much the $120k is earning.

It seems fine but I wonder if what you are really asking is whether you should buy a larger house now. If so, provide more details on the price of a larger house and your income.

Is this your emergency fund?

Anonymous wrote:You’re making roughly 4% on it in a hysa, right? Do you have a separate emergency fund?

Cash in an Ally account with some other cash in Fidelity FDRXX getting about 4%

It's entirely reasonable to keep a small percentage of your portfolio in relatively safe cash-like instruments such as Vanguard's Federal Money Market Fund (VMFXX), which presently has a 7-day yield of 4.2%. Whether that represents an emergency fund, or simply a vehicle for managing your monthly cash flow, or it money set aside for an anticipate future expense like the one you mention, an allocation of 10% doesn't materially increase your portfolio's volatility or risk profile.

In this economy? I hope you mean you have Chinese Yuan not American Dollars.

The fact that you’ve decided have 1.2 m at 30 is crazy to me. I think my entire net worth at 30 was about 50k!

Anonymous wrote:You’re making roughly 4% on it in a hysa, right? Do you have a separate emergency fund?

Right, OP, by cash you mean HYSA and not just sitting in a credit union?

10% is fine, just be sure its paying a decent interest rate.

You’re making roughly 4% on it in a hysa, right? Do you have a separate emergency fund?

Currently have a little over 10% of net worth in cash at 32, about 120k. The reason is because I’m on the fence about buying a house and want to have a decent amount for a down payment but I’m very indecisive about actually going through with it. Could technically afford one and it would be nice to have a larger space for my family but it would be a larger strain on our budget.

So this 120k is just sitting while the market goes up. I know the advice is to keep money you’ll need within 5 years in cash but I don’t even know if we’ll end up buying a new house. We live in a smaller house at the moment with a low interest rate mortgage and really want something larger but in this economy it’s intimidating to commit to a high monthly payment (even if we put 40-50% down our payment would go up by a lot).