You know, it occurred to me that I actually have negative effective cash balance. My levered stock balance is more than my cash balance…
im 28. you should do at least a 401k. you’ll prolly receive 25% in tax refunds for every dollar you put. and you’ll lower your magi by doing this and may even get a deduction for an ira.
I keep about 1 month in cash, 3 months in chequing, and 3 months in a liquid low vol investments
I’m 28. Expenses also scale with age so I don’t know if it’s a youth thing
decent income. one years salary over ~35 years compounded at 4% net real return (also net of what you’d get from cash). since i have 35 years, i assume 4% net of everything is pretty reasonable considering S&P 500 or any equity index should easily yield that given current earnings yield.
wow. do you guys even work in the investment industry?
yeah. less concern about losing your job at the start of a downturn in WM.
banks tend to not pull lending that is already in place. any secured or unsecured line of credits should be available. if for some one-in-a-million reason your bank goes under and you can’t access credit, drawing down some of your retirement funds in a worst case scenario is still much better than having a massive cash drag over a lifetime. in canada there is no early withdrawal penalty on retirement funds so quite a bit cheaper for Canadians to access this asset pool.
I have $25k in cash in the bank. I also have access to an HSA $15k and old ROTH IRA contributions probably $60k if need be. I like the security that comes with knowing that if I got laid off or had a big one-time expense I could cover my expenses for a while. In short I sleep better at night with an emergency fund. That said, I invest 15-20% of income in the stock market aggressively and I like having some cash as well to take advantage of market pullbacks and distressed sectors/stocks.
ive also been holding cash for 9 months or so and have not put it into anything yet.
realistically 9 months is prob about right.
no roth, no credit lines, no loan sharks, no heloc
One month of expenses or 100k in cash
Only $10k? I thought you were a BSD. Money Mayweather has been known to carry $1m in cash with him at times according to this article, which is an incredible read (sorry it’s not Infowars).
http://bleacherreport.com/articles/1788710-insane-things-floyd-mayweather-does-with-his-money
he carried his million dollar bag on ridiculousness with rob dyrdek (MTV show)
that’s my bug out bag, anything more than $10k in there would weigh me down in a hot situation. I have gold, weapons, ammo, potassium iodine, socks, cash, and other essentials buried at strategic locations. 
except you’re your own loan shark and you’re charging yourself a mid-to-high single digit opportunity cost.
i find it interesting that a bunch of CFAs don’t equate opportunity cost with interest cost and basically have this massive loan outstanding constantly.
i get why americans must have greater savings than canadians due to canadians having few concerns about one-time health care costs and have fewer worries about the effect of unemployment due to much better unemployment benefits and other social programs but 6-12 months expenses seems extreme unless you fear for your employment on an hourly basis.
where are you getting mid to high single digit op cost, sp500?
i also include short term high liquid investments, money funds, ets in cash.
like i said i usually go 6-12 months now its 9 months. living in low COL city helps as well.
yeah. historically the S&P 500 is 6-8% real over long time periods. even if you think equities are currently expensive, which they likely are, you’ll probably still get 5-7% real out of public equities over the next 35 years. even if its 3% you’re laughing. you’ll likely get consistently negative after tax yield from cash on a real basis. currently cash yields about -1% real after tax. over a long time period the opportunity cost is extreme. at the very least, if you have a house and a mortgage, you should put your cash into your house as equity and keep a heloc on standby for doomsday.
troof. until you get raped with a 20% downside, in real terms its prolly 23%. lol
but i low key agree with matt, just not during all time highs of a 9 year bull run.
I like having a good safety net in case of crisis. This should include quick access to some cash if need be. Never know when you need to bail somebody out of jail, pay hush money to a hooker, or for the side chick’s flusher.
whats a flusher?