*aren't liquid. You have the ability to cash them out. Depending upon which account type they are in, you may be hit with withdrawal and tax penalties, however. Choose the proper platform to invest.

My rule of thumb that I tell my clients is to have 3 months worth of expenses saved, in cash, in a rainy day fund (aka savings account). All other should be put to work for you because it's not like your investments aren't illiquid. This is obviously based upon current market conditions being a bull market. Cash or cash-equivalents are paying you tenths of % points in this monetary environment so inflation is causing you to lose value on your savings.

Put it to work for you.

Anonymous wrote:

Anonymous wrote:Just about all of our low-8 figures is invested. We do have a "bag lady" cash account at $500k

Same. Except we only keep 50K in cash at any one time.

Same, except I keep a few thousand in cash taped to my inner thighs at any one time.

Anonymous wrote:Just about all of our low-8 figures is invested. We do have a "bag lady" cash account at $500k

Same. Except we only keep 50K in cash at any one time.

I keep about 12 months' of bare bones expenses liquid. Lately I've been thinking this may be too much, and may cut it back to 6 months and invest the rest. I lost my job recently, which is theoretically what it's there for, but between a generous severance package and quickly finding another position, I came out ahead financially and didn't need to touch the funds.

Just about all of our low-8 figures is invested. We do have a "bag lady" cash account at $500k

Our mortgage is paid off so we only keep 3 months of funds liquid - the rest is invested in a variety of stocks, mutual funds, life insurance, and retirement accounts. If there was an emergency requiring more than what we had available we would be able to pull money out of either the cash value in our life insurance policies or other accounts.

Personally I'd be comfortable with only a 3-6 month cash amount, assuming there are sufficient diversified stock investments. I wouldn't want to be in a situation where I'm forced to sell stock overnight to be able to pay my bills, but with I'd think 3 months would be enough time to figure out how best to draw money out of stock investments.

We keep about $70K in cash and the rest is invested in mutual funds (outside retirement, which is all invested). That represents about a year's worth of living expenses, although we also get rental income.

I just keep my one Billion all cash!!!

To me, stocks and ETFs, but maybe not mutual funds if they have selling restrictions, are basically liquid. In other words, in a bind, you can sell a traded stock or ETF on the open market in a matter of seconds and sell it at market rate.

We have about $60,000 in cash, $500,000 in highly illiquid investments (real estate) and $300,000 in mostly illiquid investments (401k,etc) and $400,000 or so in somewhat illiquid investments (stocks, bonds).

Our cash position is probably half to a third what it should be realistically - in general the rule of thumb is 6 mo to a year living expenses or salary is recommended.

2% of ours is in cash right now.
That's after a year and a half of spending our cash emergency fund due to joblessness. Thank goodness, DH has been offered a job!
I am grateful for his foresight in accumulating so much ready money.

Good question, OP, especially these days when finding a job takes longer than it used to. The financial planner is not far off.

Is there a guideline for this from all the financial experts? By kept liquid -- I mean in checkings/savings be it one account or across many accounts. I heard from a friend that a financial planner said that all you need in cash is 1 yrs worth of funds and the rest can all be invested -- stocks/bonds/mutual funds. Is that really how wealthy/upper middle folks do it? The advice came from someone working for a brokerage who was trying to get her to invest, so I'm not sure how accurate it is. Stocks/bonds/mutual funds are still liquid in that you can sell at any time but obviously it's not as easy as cash and there may be tax reasons you don't want to sell at any particular time. Is there a % of net worth people like to hold on to in cash and invest the rest and what is that ratio? Or do you look at it in terms of living expenses for a year or two?