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x savings/checkings for a few months of bills, x cash in brokerage and ST bond, sounds okay except everything else is invested (chiefly equity funds, some bond and REIT funds) and sure would be better to let sit, also our annual runrate is above x with new prop tax (to ~19k a year now).
A wise man once told me - at that time I didn't know he was wise - never invest more than half of your money regardless of how much money you have. This is completely contrary to any advice you will receive.
I am taking this advice. My "cash" position in my investment portfolio does not include 50% cash I have which I will never invest. I maximize my retirement accounts of course.
Less than $100 so that we maintain a checking account at our local credit union. Everything else are at brokerages.
I hope your cash at brokerages is FDIC insured (assuming it will do a world of good if s*** happens). If all your assets at brokerages are invested, then I will shut up.
@VintageFreak, yes, they are FDIC insured ($250K limit per account). That was the first thing I checked. We did perfectly fine during 2000-2002 and 2008.
Money market funds work just like saving accounts, and pay very little. Nothing fancy. I prefer Vanguard short term investment grade bond, Admiral share, VFSUX, with SEC yield 1.97% and ER 0.10%.
Virtually nothing. Our current 10% portfolio allocation to cash includes DODIX, TRBUX, a money market fund, and whatever sums we keep for convenience in a couple local checking accounts. (No savings account). Whether inside or outside the IRA, cash is considered part of our invested assets. All is included in allocation decisions (which tends to drag down annual return a bit).
We move 4-7% of our investments annually into our household budget (i.e. a checking account) to cover anticipated expenses throughout the year. During rare years, emergency expenses may require a bit more. Obviously, we pull money from the sectors that have performed the best.
Our investments are very conservatively positioned and broadly diversified. A loss greater than 10% in any given year is possible, but highly unlikely. With over half in Roths, tax issues are not much of a consideration either.
*The 10% allocation to cash does not include additional cash/short-term bonds held thru multi-asset allocation funds.
Oh, no one feels that need; I get that. It is just that that (and only that) is the question here, so if one feels as so many do, why bother to respond at all?
Interesting that almost nobody else answers the question and gives figures.
@ davidmoran: We didn't just fall off the turnip truck.
David - If you want people to state their total net worth, go ahead and ask the question directly. Obviously inferences can be easily drawn if one publishes their dollar amounts in a particular asset as well as the % of portfolio that represents. I did not take Dex's question in the same vein you apparently did.
Furthermore ... What value do you see in publishing a single number completely out of context? ... If I had $1,000 or $20,000 or $100,000 sitting in a savings account at our local Credit Union would it have any meaning for other investors?
Good question! Ok, I believe my situation differs from most on this forum because I have a safe place to park cash (family business), where I get a nice rate of return. So, there has to be a BIG selloff for me to invest (and risk) more than I already have in the market.
The question was how much in saving account. Period. No percentage. No nothin'. I don't want or need to know anything in this regard whatsoever. But few responded to it plainly, even though they chose to respond. No turnips involved. Lots of pols on this forum perhaps.
We're near the end of our budget year, and had a lot of unanticipated expenses over the summer - so at the moment our checking accounts (at two local banks) contain less $$ than Dex's stated figure.
I have about half a year's living expenses in cash and short term investments. I'd say about 80% of that is straight cash. My wife holds another slug of money equivalent to about 25% of our annual living expenses, separately, in cash and conservatively-managed flexible stock/bond funds (roughly split 50 cash/50 funds).
David- it's been customary both on MFO and it's FundAlarm predecessor site to express financial affairs in terms of percentages, rather than dollar amounts. There are good reasons for that practice: privacy of course, and equalization of "opinion weight" being but two. By that I mean that a contributor's opinion on any given matter is not enhanced or diminished merely because that person may have ten times as much, or maybe only one-tenth as much wealth as someone else.
In fact the issue seldom rises, and probably arose here only because of the nature of the underlying linked article, which does quote dollar amounts. By the way, I found that article to be misleading, simplistic and useless; in fact, really nothing more than a thinly disguised banking puff piece. Compare the article title: 62% of Americans Have Under $1,000 in Savings, Survey Finds with the actual "information": GOBankingRates conducted a survey that posed the question, “How much money do you have saved in your savings account?”
Since when do we evaluate someone's "savings" solely by the amount they may have in a bank account?
So to keep with the historical custom you cite, a better question would have been What percent of your total nut do you have in cash?
I was not expressing any opinion about privacy. It's not that I don't understand the issues. I was just surprised few were willing to answer a plain direct question but responded anyway.
Opinion weighting is an interesting notion. Not sure it applies so much in a situation where anyone could've said "I have 50k (or 25k, or 100k), about a year's worth for me." Whatever.
I have about 12-15% in cash, which amounts to about $140,000. Call me a wimp, but I don't feel comfortable investing it. I already have quite a lot of money in the market.
I have about 12-15% in cash, which amounts to about $140,000. Call me a wimp, but I don't feel comfortable investing it. I already have quite a lot of money in the market.
@Old_Joe and that savings acct. Now if I remember properly, some of that will be earmarked towards the local public school music/band program where I live, as a gift donation. So, does he count that as savings, do I count it as savings as I may direct the funds to their home or does the school band indicate as a future savings acct. transaction? Guess the school, nor I; are able to count the money just yet, eh?
Had a savings account when I was a kid (1950s-60s). The bank gave me a little passbook and when I put saving in the local bank from my summer job, the bank teller would record the sum in the book and initial next to it. If I took money out of the bank, they would take the little book and record that.
Nothing against banks or saving accounts. FDIC insurance is nice to have. But I tend to live on the edge in a lot of ways and am very comfortable with just about everything (liquid) we have in mutual funds.
If needed, I can write checks against our money market fund at T. Rowe Price ($500 minimum) or press a few keys on the IPad and have them shift $$ from any fund to our local bank overnight. So - excuse me, but I just don't get the big deal about savings accounts.
@hank- yes, and that's why the original link in this discussion is actually pretty silly. Like you, we have most of our cash in either American Funds or American Century moneymarket accounts. If either of those companies go under, the whole US won't be far behind.
Had a savings account when I was a kid (1950s-60s). The bank gave me a little passbook and when I put saving in the local bank from my summer job, the bank teller would record the sum in the book and initial next to it. If I took money out of the bank, they would take the little book and record that.
@hank Wow...I had forgotten about that...me, too! Walking down Memory Lane right now
@Old_Joe agreed...not to mention people who have their "savings" in rental properties, businesses, etc.
If either of those companies go under, the whole US won't be far behind.
@Old_Joe Ummmm, I believe that's what most depositors @ Washington Mutual and Lehman Brothers and Merrill Lynch were probably thinking, too, right up until ......
@heezsafe- Good point! WashMutual was a bank of course, so FDIC helped there, but the other two- didn't the US step up and "temporarily" for a couple of years cover the moneymarket accounts? The theory being that if a run once got started there would be no stopping it? I know that they did that, but not sure about what happened with respect to Lehman Brothers and Merrill Lynch. Lehman was an investment bank, so I'm not sure if they even had any "public" money market accounts, and of course ML was shoved into the lap of BofA.
Comments
I am taking this advice. My "cash" position in my investment portfolio does not include 50% cash I have which I will never invest. I maximize my retirement accounts of course.
Money market funds work just like saving accounts, and pay very little. Nothing fancy. I prefer Vanguard short term investment grade bond, Admiral share, VFSUX, with SEC yield 1.97% and ER 0.10%.
We move 4-7% of our investments annually into our household budget (i.e. a checking account) to cover anticipated expenses throughout the year. During rare years, emergency expenses may require a bit more. Obviously, we pull money from the sectors that have performed the best.
Our investments are very conservatively positioned and broadly diversified. A loss greater than 10% in any given year is possible, but highly unlikely. With over half in Roths, tax issues are not much of a consideration either.
*The 10% allocation to cash does not include additional cash/short-term bonds held thru multi-asset allocation funds.
Interesting that almost nobody else answers the question and gives figures. Maybe I should delete mine.
David - If you want people to state their total net worth, go ahead and ask the question directly. Obviously inferences can be easily drawn if one publishes their dollar amounts in a particular asset as well as the % of portfolio that represents. I did not take Dex's question in the same vein you apparently did.
Furthermore ... What value do you see in publishing a single number completely out of context? ... If I had $1,000 or $20,000 or $100,000 sitting in a savings account at our local Credit Union would it have any meaning for other investors?
I really don't have a "savings account" per se.
$0.00...so I am typical of the average American.
We're near the end of our budget year, and had a lot of unanticipated expenses over the summer - so at the moment our checking accounts (at two local banks) contain less $$ than Dex's stated figure.
In fact the issue seldom rises, and probably arose here only because of the nature of the underlying linked article, which does quote dollar amounts. By the way, I found that article to be misleading, simplistic and useless; in fact, really nothing more than a thinly disguised banking puff piece. Compare the article title: 62% of Americans Have Under $1,000 in Savings, Survey Finds with the actual "information": GOBankingRates conducted a survey that posed the question, “How much money do you have saved in your savings account?”
Since when do we evaluate someone's "savings" solely by the amount they may have in a bank account?
I was not expressing any opinion about privacy. It's not that I don't understand the issues. I was just surprised few were willing to answer a plain direct question but responded anyway.
Opinion weighting is an interesting notion. Not sure it applies so much in a situation where anyone could've said "I have 50k (or 25k, or 100k), about a year's worth for me." Whatever.
Yes, for sure, but consider the source and adjust accordingly. That's probably what the others did.
Add: the original post asked this pertinent question: "How do companies spend $ on such poor surveys" So why bother to even talk about all of this?
I'd call you very smart, not a wimp.
you forgot to include "savings account"!
Ya'll take care,
Catch
Nothing against banks or saving accounts. FDIC insurance is nice to have. But I tend to live on the edge in a lot of ways and am very comfortable with just about everything (liquid) we have in mutual funds.
If needed, I can write checks against our money market fund at T. Rowe Price ($500 minimum) or press a few keys on the IPad and have them shift $$ from any fund to our local bank overnight. So - excuse me, but I just don't get the big deal about savings accounts.
@Old_Joe agreed...not to mention people who have their "savings" in rental properties, businesses, etc.