What do you guys do with extra cash on hand, that you don't have a set job for yet?

I'm not talking about an emergency fund, and retirement dollars, 529's etc, are already accounted for. Just liquid cash on hand. No debt aside from two mortgages. We may upgrade homes in a few years or buy another rental property, but nothing concrete on the horizon.

I was thinking about putting it into a brokerage account with the following allocation CASHX 60%, SOXX 20%, JEPI 20%. Max draw down on a 20 year back test is 20% vs a straight SPY at 53%.

To me it depends on if you are trying to keep it more as available cash that you are trying to protect from inflation and have readily available or if you are trying to grow it significantly. It kind of looks like you are trying to capture some growth with that allocation, but if you need it in the short term taxes will eat into that when you sell. Plus this will be a taxable account so that JEPI will pay taxable dividends.

MM or liquid savings/checking earning 4%.

EFR said:

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To me it depends on if you are trying to keep it more as available cash that you are trying to protect from inflation and have readily available or if you are trying to grow it significantly. It kind of looks like you are trying to capture some growth with that allocation, but if you need it in the short term taxes will eat into that when you sell. Plus this will be a taxable account so that JEPI will pay taxable dividends.

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If you don't mind elaborating, whatare your thoughts on protecting cash from inflation?

OP - I use high yield savings and buy short term treasurys (3 -36 months) as well as high quality short term corporate debt. Currently exploring TIPS, but as a general rule I buy debt directly through brokerage and would not consider buying debt, either govt or corporate, in an ETF unless it was very short term.

As mentioned JEPI pays non qualified dividends. I mention this as it is a good idea to always determine beforehand the tax treatment of dividends and distributions of potential investments and to put them in the appropriate investing account, whether it be taxable, ira, or Roth.

EFR said:

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To me it depends on if you are trying to keep it more as available cash that you are trying to protect from inflation and have readily available or if you are trying to grow it significantly. It kind of looks like you are trying to capture some growth with that allocation, but if you need it in the short term taxes will eat into that when you sell. Plus this will be a taxable account so that JEPI will pay taxable dividends.

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Agreed. I think I'm confused by the question. He's already met his annual retirement investment contribution goals, topped off emergency fund, and have funded kids college.

Cash on hand means just that to me - I want it on hand so any friction against me accessing it is too high of a barrier. We keep all cash on hand in a HYSA. IOW, anything that takes longer than for me to transfer cash out of my HYSA is not an option.

Conversely, if I don't actually need the cash on hand, then it gets invested in my existing equities or fixed income buckets. And I move on.

YouBet said:

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EFR said:

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To me it depends on if you are trying to keep it more as available cash that you are trying to protect from inflation and have readily available or if you are trying to grow it significantly. It kind of looks like you are trying to capture some growth with that allocation, but if you need it in the short term taxes will eat into that when you sell. Plus this will be a taxable account so that JEPI will pay taxable dividends.

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Agreed. I think I'm confused by the question. He's already met his annual retirement investment contribution goals, topped off emergency fund, and have funded kids college.

Cash on hand means just that to me - I want it on hand so any friction against me accessing it is too high of a barrier. We keep all cash on hand in a HYSA. IOW, anything that takes longer than for me to transfer cash out of my HYSA is not an option.

Conversely, if I don't actually need the cash on hand, then it gets invested in my existing equities or fixed income buckets. And I move on.

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I guess the question is what you do with funds that you may want available in the 5 year horizon, but you don't have it earmarked for a specific project? Seems like I just need to invest it with my existing equities buckets.

ReelAg6 said:

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YouBet said:

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EFR said:

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To me it depends on if you are trying to keep it more as available cash that you are trying to protect from inflation and have readily available or if you are trying to grow it significantly. It kind of looks like you are trying to capture some growth with that allocation, but if you need it in the short term taxes will eat into that when you sell. Plus this will be a taxable account so that JEPI will pay taxable dividends.

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Agreed. I think I'm confused by the question. He's already met his annual retirement investment contribution goals, topped off emergency fund, and have funded kids college.

Cash on hand means just that to me - I want it on hand so any friction against me accessing it is too high of a barrier. We keep all cash on hand in a HYSA. IOW, anything that takes longer than for me to transfer cash out of my HYSA is not an option.

Conversely, if I don't actually need the cash on hand, then it gets invested in my existing equities or fixed income buckets. And I move on.

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I guess the question is what you do with funds that you may want available in the 5 year horizon, but you don't have it earmarked for a specific project? Seems like I just need to invest it with my existing equities buckets.

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That's what I would personally do especially with that time horizon. Any cash I keep on hand (liquid) is earmarked for spending <1-2 years whatever that spending might be. Anything else gets invested.

ReelAg6 said:

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What do you guys do with extra cash on hand, that you don't have a set job for yet?

I'm not talking about an emergency fund, and retirement dollars, 529's etc, are already accounted for. Just liquid cash on hand. No debt aside from two mortgages. We may upgrade homes in a few years or buy another rental property, but nothing concrete on the horizon.

I was thinking about putting it into a brokerage account with the following allocation CASHX 60%, SOXX 20%, JEPI 20%. Max draw down on a 20 year back test is 20% vs a straight SPY at 53%.

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VIO online account 4% interest rate

Merrill Lynch Preferred Cash Account 3% interest rate

High rated tax free municipal bonds are paying 5% right now. They pay out twice a year typically. Can sell anytime but if rates go up you could take a loss. Rates go down and you can sell for profit.

More risk here in fluctuation of principal than MM account play.

I put it in XMoney rn.
6% for now until they drop it.

I got access to it 2 weeks after getting a 6mo t-bill and it sucks to think about what i'm missing out on. Such is life...

Running with the Bulls said:

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High rated tax free municipal bonds are paying 5% right now. They pay out twice a year typically. Can sell anytime but if rates go up you could take a loss. Rates go down and you can sell for profit.

More risk here in fluctuation of principal than MM account play.

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Good option for ongoing cash flow. We have a muni bond ladder with 5% bonds. It's currently our primary cash flow. Of course, that's a bigger thing than stowing some extra cash somewhere.

How do you get in on Xmoney? Invite only or just start paying for the premium service?

idAg09 said:

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How do you get in on Xmoney? Invite only or just start paying for the premium service?

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Had you asked AI instead of here you would've gotten your answer...

looks like you need to either 1.) pay for "x premium +" @ $40/month or b.) pay for "x premium" @ $8/month and meet direct deposit requirements.

Nice teaser rate but not worth the hassle for me.

FishrCoAg said:

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or since you are already in it, you could have answered the question in the time it took to type out a smart ass reply

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I'm not their agency and it doesn't matter if it was sarcasm.

Answering the questions would enable them to continue to ask questions that they could have just as easily and quickly asked Grok or ChatGPT (or any other AI) for the same information, with the advantages being that those AIs will respond a LOT faster, given them a MUCH more comprehensive list and summary, and given them control over the process.

Running with the Bulls said:

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High rated tax free municipal bonds are paying 5% right now. They pay out twice a year typically. Can sell anytime but if rates go up you could take a loss. Rates go down and you can sell for profit.

More risk here in fluctuation of principal than MM account play.

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We keep a pile of money in a range of muni bond funds.

Some ultra-short, short, mid, and long duration. And also a pure cash money market with no interest rate risk.

The long duration is approaching 5% tax-free, or a 6.5% to 7% before tax return. That's a great return for minimal risk. Even when rates are up and principal value is down, I've rarely had to sell at a capital loss because there's enough in the MM to pay bills or occasionally transfer from the ultra-short, or short duration funds which have minimal interest rate risk. I've done the math that accounts for rare capital losses, and we are still way ahead on a net basis when you account for all tax-free dividends compared to what a MM or CD offers.

Plus, munis don't count toward taxable income which allows us to do more Roth conversions annually than if we got the equivalent return in a taxable account.

We keep about two years of living expenses in TMCXX. Yes, that may be a bit much but it's overall a small portion of our net worth (less than 5 percent of our net worth).

Wrighty said:

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RightWingConspirator said:

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We keep about two years of living expenses in TMCXX. Yes, that may be a bit much but it's overall a small portion of our net worth (less than one percent of our net worth).

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lol ok. if you have living expenses of 80,000, that means you have 160,000 and that overall net worth of $16,000,000. never change texags.

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That's not outlandish if you've been paid very well as a doctor, lawyer, engineer, executive, business owner, etc. for a couple decades and rode the big bull market up over the last 10+ years.

Wrighty said:

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MemphisAg1 said:

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Wrighty said:

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RightWingConspirator said:

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We keep about two years of living expenses in TMCXX. Yes, that may be a bit much but it's overall a small portion of our net worth (less than one percent of our net worth).

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lol ok. if you have living expenses of 80,000, that means you have 160,000 and that overall net worth of $16,000,000. never change texags.

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That's not outlandish if you've been paid very well as a doctor, lawyer, engineer, executive, business owner, etc. for a couple decades and rode the big bull market up over the last 10+ years.

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16 million is top 0.7%. classic internet forum posting.

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We have all types who post on here, from lower net worths to higher. It's not inconceivable some posters have net worths of $10M to $20M or more. They're a small percentage of the total, but that doesn't make them any less real.

Wrighty said:

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MemphisAg1 said:

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Wrighty said:

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MemphisAg1 said:

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Wrighty said:

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RightWingConspirator said:

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We keep about two years of living expenses in TMCXX. Yes, that may be a bit much but it's overall a small portion of our net worth (less than one percent of our net worth).

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lol ok. if you have living expenses of 80,000, that means you have 160,000 and that overall net worth of $16,000,000. never change texags.

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That's not outlandish if you've been paid very well as a doctor, lawyer, engineer, executive, business owner, etc. for a couple decades and rode the big bull market up over the last 10+ years.

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16 million is top 0.7%. classic internet forum posting.

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We have all types who post on here, from lower net worths to higher. It's not inconceivable some posters have net worths of $10M to $20M or more. They're a small percentage of the total, but that doesn't make them any less real.

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actually...in the millionaire thread he just posted that he is 53 with a net worth of $5MM and income of close to $400k. with those numbers means he has 1% of net worth = $50,000 in savings, which is 2 times his living expenses, means living expenses = $25,000.

income of $400k and expenses of $25k?

sure some people are loaded. but this seems like a case of internet bravado at least to a degree.

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You're trying to read too much into his post and are extrapolating things you don't know anything about.

Wrighty said:

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Quote:

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You're trying to read too much into his post and are extrapolating things you don't know anything about.

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actually no. he posted specific numbers and i'm pointing out that in fact they're wrong and exaggerated, using his own numbers.

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You don't know that but keep pretending that you do. I trust what other posters say more than what other posters attempt to say for them. It's entirely possible what he said in both cases is true. If I said I had a net worth of $5M that doesn't mean I don't have a net worth of $10M. It depends on his point of reference in each statement. Perhaps one was a narrow context and the other was broader.

Wrighty said:

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MemphisAg1 said:

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Wrighty said:

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Quote:

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You're trying to read too much into his post and are extrapolating things you don't know anything about.

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actually no. he posted specific numbers and i'm pointing out that in fact they're wrong and exaggerated, using his own numbers.

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You don't know that but keep pretending that you do. I trust what other posters say more than what other posters attempt to say for them. It's entirely possible what he said in both cases is true. If I said I had a net worth of $5M that doesn't mean I don't have a net worth of $10M. It depends on his point of reference in each statement. Perhaps one was a narrow context and the other was broader.

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were you just a juror on the Lindsay Clancy case?

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Diggity said:

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what's the point of being loaded if you can't brag about it to strangers on a college message board?

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I have one more Net Worth notch to achieve, but when I do I'm going to embarrass the rest of you so badly no one else will ever post here again.

It will be pointless for the rest of you.

i want to dip my toes into these. thinking i should wait and see whether we get a rate hike though. is there a bond fund you like?