How Much Cash Is Too Much?

How Much Cash Is Too Much?





Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life.

[gsiracusa]

Quarterly net worth statements have been a huge help for me. I agree daily/weekly is probably too much but monthly or quarterly makes sense to know your decisions are helping grow your net worth, and keep you motivated on the journey.

[dianeandandrew]

Accounting nerd here…..it’s updated all the time if it’s a good market day or the end of the month.

[NormanOkada]

I totally agree Bo. I like MMSA and HYSA for short term and emergency saving. I love CDs for medium term goals such as transitioning fund for leaving the military, PCS or home buying. In 2020 I had a person who had all their money invested as they were transitioning even though I told them they needed liquidity while they were searching for a job. The COVID crash came and then they understood.

[purplehearts]

25F, I do net worth statements at the end of every month. It's satisfying seeing my net worth grow month by month

[danh]

I only look at my full net worth once a year (and even then I don't religiously cost out the house and other illiquid assets.)

But we are spitting distance from being liquid multimillionaires. So frankly, I'm checking that Fidelity fullview update each day the market goes up.

[gassman]

I did took out a 3 yr auto loan @3.99%. I took the full amount and purchased 3&5 yr CDs @ 5.1%.

[seannacarter]

Thank you for the nuanced answer to how much cash a person is holding. I am getting close to retirement and will use the bucket strategy for allocation and to manage the risk of returns. I am currently building my cash receives for Bucket 1 (36 months of expected expenses within retirement). I think (as you stated) the answer to how much cash is "it depends"...

[MichaelSmith-fjdi]

For me, I try to invest what I can, but I do have the following in cash:
-Money for Car Insurance and Renter’s Insurance Premiums
I set aside a certain amount per paycheck to cover those since they don’t occur monthly.
-$1, 000 Checking Account Cushion
-Emergency Fund, Am Working on This
-Money for PE Exam as I Plan to Take it in 2026 and Need to Have Money to Pay for the Exam and Any Expenses Such as Prep or a Hotel Room, Needed for Career Advancement
-Potential Family Europe Trip Next Year
-Money for Car Maintenance and Eventual Car Replacement

[nathanbaker]

Monthly net worth statement for me, but I’ve recently stopped looking up current car and house values and will only update them once a year going forward

[rebeltheharem]

I look at it around every week or every few days, cause my networth statement is incorporated into my budget and personal accounting records. So every time I update it, it get a new networth statements. But, I only update the value of my assets every 6 months though.

[tombishop]

Hi, I really enjoy the show and reading your book. My question is about how to assign my army of dollar bills. We are 51 and 49 years old and plan to partially retire next year. Our properties are 68% of our total assets and our investments are 38% (from the Net Worth template). Should we focus on paying our rental property loans early or to increase our brokerage accounts? We already maximize our 401K & IRA accounts. The loans interest are from 2.75% to 4.5% and the loan balances are from $18K to $355K. Thanks!

[Mike-yrsm]

Once a year net worth statement with a pre-calculated depreciation schedule for my car and only adding project cost to home value.
I still budget weekly to monthly to ensure the ship is on the right course, but try not worrying about the preset behaviors.
My mortgage company loves trying to tell me the estimated equity in my home (without knowing my project work) and following up with Not too concerned with paper gains on a home - great to see and reaffirms I picked a good place, but can be wiped away in a bad market.

[colegreene]

I currently do my net worth statement about twice a month lol.. I don’t have a lot of complexity and am still really early. I’ll probably stop doing so often once the market turns down and the number decreases

[shawnpatton]

I do a monthly balance of all the accounts that the statements or balances are easy for me to get but I do a quarterly net worth when my wife’s statements come in the mail.

[baconcerberus]

I would say anything over 12 months is too much and should be invested unless you are planning a big purchase within 12 months.

[ericdale]

Attention Brian: I agree, EVERYONE needs to have a character building car!

[lzhu]

11:22 I'm really disappointed that the guys didn't think about taxes for this car loan payment question. That 4.5% return on whatever interest-bearing instrument (HYSA or T-bills) is subject to ordinary income taxes. To beat a 3.9% car loan, which is most likely not tax deductible, this person will need to have a combined marginal tax rate of below 13.3%. This is possible, but far from guaranteed.

[MKK-wgfz]

It cost me $1400 to replace my A/C in my Honda Accord. I’m in suburban CA though & I can walk to my mechanic, restaurants, movies etc within 3 blocks so maybe that’s why. 1k to do all that work on a Beamer sounds like a serious bargain.

[Zorlig]

The idea of getting comfort from cash comes from a scarcity mindset usually from some undealt with trama from childhood. A healthy optimized response invests the money whenever there is more than is needed for normal cash flow.

[jacquiquinlan]

It takes so long to get to the abundance phase 😅