How Much Cash Is Too Much?

[@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.

[@cyberwapx]

bo is always excited

[@coryjiang]

No he is always Sooooo excited

[@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.

[@eats4cheaps305]

Hopefully they didn't have to take all of it out because it came soaring back pretty quickly.

[@2Anut]

I like the hot mic intro lol

[@purplehearts2103]

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

[@Lucky008aau]

I did that for years, until I my late thirties when market fluctuations started affecting the numbers more than my contributions to savings/investments.

[@churtangle]

​@@Lucky008aau Did you stop altogether or just track for a longer period e.g. annually

[@Lucky008aau]

@@churtangle I run the numbers about every 2-3 months now, whenever I'm curious or need to make an educated decision. I always do it every January and now delete the ones in between, so I only keep the annual ones.

[@seannacarter9189]

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"...

[@nathanbaker1868]

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

[@vaderwashere365]

Why so often? I do more than once a year, but it is quite a bit of looking up information and I do it once a quarter. I do like your idea on including cars, I never even include them, but that would add $70K to our net worth immediately.

[@nathanbaker1868]

@@vaderwashere365 Habit, I guess. I used to be an accountant and making financial statements was a normal monthly routine, so I guess it stuck. That said, it is pretty helpful to spot trends when it changes more/less than normal. I have a section that excludes investments and that’s really the only part I pay attention to, since it should be roughly the same from month to month.

[@JorelFudge]

@@vaderwashere365 Cars are a "one-shot" depreciable asset. They count towards your TNW, not your Assets or Liquidity.

[@tombishop2326]

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!

[@danh2716]

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.

[@rebeltheharem7028]

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.

[@gassman55]

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

[@avengemybreath3084]

What’s your marginal tax rate? If it’s only ~20% (local, state, federal) you’ll break even. If more, you’ll lose.

[@greenlantern1986]

Congrats Rebie!

[@Mike-yr1sm]

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 HELOC/loan..... 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.

[@colegreene2153]

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

[@MichaelSmith-fj7di]

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

[@richdaubert1187]

Good luck on the PE!

[@ericdale7086]

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

[@shawnpatton3795]

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.

[@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.

[@hornedlobster]

Berkshire Hathaway currently has 276 billion sitting in cash. I know it's not an exact comparison, but still something to think about.

[@Zorlig]

@@hornedlobster yes, "not because we want...cash ... But because we don't see anything that makes us want to part with that cash where we feel we're getting enough for our money". That's not the case with individuals.

[@bigbirdthug]

What do they Livestream on? They're answering questions that aren't here in KZbin so where are they getting the questions from?

[@michaeldew7904]

Some are saved up from previous episodes.

[@bigbirdthug]

@@michaeldew7904 I get that but it does seem like there's a live back and forth with the audience and that's not in the comments on KZbin

[@arh1234]

I don't think all the Livestream commnts transfer over to the permanent video. It's a different format

[@bigbirdthug]

@@arh1234 ohhh good to know. I'm never able to make the Livestream so I miss all that. Thanks!

[@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.

[@stephaniel6867]

Within 3 years would be better but definitely put it in a CD or something of the sort.

[@beauward4415]

Supercharger belt makes me think Audi. Changing a supercharger belt on an Audi 3.0T is easy. It’s amazing to me that people don’t do their own maintenance on their cars. I understand some things. But most “maintenance” can be done easily for wayyyyyy cheaper than the dealer says.

[@jacquiquinlan]

It takes so long to get to the abundance phase 😅

[@rarelycares8416]

But it is so worth the sacrifice once you get there.

[@MKK-wg7fz]

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.

[@bbkyjohnson]

It cost me almost $1000 on a 2014 Cruze. That was 3-4 years ago. I’m glad I didn’t get that bill!! Timing chain and serpentine belt water pump tune up and a new pulley if I remember correctly. I put $2000 total into that car with brakes and headlights new tires and an issue with the fuel system. Then promptly smashed a deer 2 weeks later and totaled the car. Just throwing like throwing cash on a fire!! lol

[@VirginiaHapa]

The car guy still has to pay taxes on that interest $$ gained. Should think through that, as well.

[@leod7130]

Im so excited!

[@derekcox6531]

I’m excited about YOU being excited about the general SOOO excitedness…generally speaking…😬🤓

[@lzhu87]

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.

[@bigbirdthug]

Is it just me or is rebie's camera and lighting better than what's on the money guys?

[@p1qt.h4ndl]

True

[@BLR653]

The luxury car was either a Range Rover or Mercedes Benz!

[@ConserveMore]

Net worth statement each month because I don't have the willpower not to look.

[@jesusjuansanpascual9066]

This 1 $ beer cost me 88 cents 😂 😂😂.

[@juicyfruit100x]

$88?

[@JorelFudge]

Need to update that counter gentlemen.

[@kennethwers]

Money market is doing fairly good at this time. He is saving for a down payment on a home. He needs it safe.

[@enonknives5449]

No, you can't have too much cash. You may have more cash than you need for your goals, but maximizing wealth is not required. I don't even think of cash as an emergency fund; I think of it as an opportunity fund. It's nice to have cash on hand when a good opportunity presents itself.

[@vaderwashere365]

Once you have more than enough cash, don't let it sit idle. Keep it in investments that you can liquidate quickly or borrow against. When you only can barely have an emergency fund, then maybe keep it in cash, otherwise, that is dead money. I learned this the hard way by having $80K in stale cash for years and never had to use it (except to buy another house). I missed out on years of gains. Now I keep everything in the stock market and real estate and have never had a liquidity problem. It is the best of both worlds, when you can afford it.

[@mthlay15]

I'm sure that at some point, the opportunity cost outweighs the convenience of cash. Sure, having cash on hand or in a bank is great, but if I have twice my annual salary sitting in a bank account for five years or more, inflation is just sucking the money's purchasing power away. Instead, invest that cash in a Total Market fund. Capital gains tax are minimal and growth is double what a HYSA gives you. Management fees need to be addressed, but many index funds can be found with management fees that are less than 0.25%. Lossing $100 per $10k over four years in fees is better than losing $1500 per $10k over a similar length of time..

[@enonknives5449]

@@vaderwashere365 -- Again, maximizing wealth is not a requirement. People need to learn the meaning of the word, "enough." Using $80K to buy a house is an example of opportunity. Avoid FOMO.

[@FIRE_DrNinjaTurtle]

I am trying to there. My mind thinks of cash as wasted money. I have a line of credit for opportunities. I am really working on changing my thinking

[@enonknives5449]

@@mthlay15 -- Whether five years of cash is too much depends on your asset allocation. In my mind, I prefer 80% stock 20% cash (no bonds) and rebalance annually...but then I may be older than you.

[@BiggMo]

58:40 Tuesdays @ 10am … does the audience not have jobs? Or are they just taking an hour away from their employers? (Watching recorded version at 5:47AM before heading to job site)

[@stephaniel6867]

People can listen in while working.

[@treesarecool]

I’m always so confused by your mics being hot while the streaming soon graphic is going

[@highbrass3749]

You do you.

[@granbox1560]

track 6-8x a year

[@MichaelSmith-fj7di]

You’re holding too much in liquid cash if you have more than six months of emergency reserves or have money that you’re not going to need within five years. If it’s longer than five years, it should be invested.

[@jack073]

I have more than 6 months in my emergency fund. But that’s because I just started my own business and having liquidity gives me options and a runway to get my business up and running. It’s not so simple and not a one size fits all.

[@jdp486]

That's not always true, as they mention throughout this video

[@vaderwashere365]

If you have the ability to have a large reserve fund, you realize this. Again, there are niches where this won't be true, but we have the ability to have a 25 month emergency fund, but we only have 2 months or so in cash - we keep almost all of it in our investments (mostly stock). I too was ultra conservative and had a 6 month reserve fund. After years of missed gains, I started acting like the wealthy person I was and put more of my $ to work. If you need your funds in an emergency you can sell stock and tack the capital gains tax hit and possibly risk timing the market, or you can just borrow against your assets and keep letting your dollars work for you. We have never had to do this, but that is what assets give you... flexibility.

[@kylen6430]

@@vaderwashere365taking a tax hit or paying interest to cover an emergency is not flexibility. Nah, I’ll stick with my reserve. It’s still

[@Reuth_]

Berkshire Hathaway has more cash than the rest of America combine and Buffett is doing just fine.

[@XxChuyoxX]

That's irrelevant to retail investors

[@Kimothy_fi]

I think you can have too much cash. Set your base and invest the rest

[@shawn.credit]

When you are a CEO with fuck you money and have it all and done it all and still desire more and treat people around you like shit.

[@JenniferNiggemeier-c7l]

more often

[@matthewharrigan3568]

I would like a billion in cash. That wouldn't be too much for me

[@mommommom4596]

Mr Cooper was the absolute worst!

[@Zorlig]

That military guy needs to quickly invest the cash because housing prices are going to go up faster than he can save. You'll never be able to save up cash for a house using savings.

[@brandonfrey1513]

You don't really know that though...

[@Zorlig]

@@brandonfrey1513 while we do not know the future for certain, we do know the past: that if instead of stacking cash for the baby years he's been building it up, if he had instead invested it, he'd have around 800k or more and the idea of him selling it and holding cash would be silly. That makes it easy to judge. Continuing to do something just because it's what he's been doing it not a good argument.

[@chemquests]

The rapid inflation of housing has leveled off.

[@Zorlig]

@@chemquests for now, as interest rates drop they'll be reconnected with labor and material cost.

[@chemquests]

@@Zorlig what makes you think that will increase housing costs? Labor and material costs are already included in the cost and the delta of interest rate is decreasing. Are you suggesting material costs will increase?

[@stevemyopinion423]

not to be mean BUT if you have warren buffet type money you dont have to listen to these guys

[@thebuzz7600]

The point still applies, having excess cash gives you the option to wait for better times to invest.

[@chemquests]

Yeah all 5 of them

[@DankZank]

These are the types of guys who manage warren buffet type money wtf you on about

[@stevemyopinion423]

Yes. Sound about right.

[@sophiasavanna1329]

You do a finically show to openly talk about finances but your to scared to talk about your own finances and expenses and have to talk in secret code whenever it comes up... that’s so lame ... unsubscribe

[@Agent77X]

100% in cash is the best in theses uncertain times!😊