Cash Is King | Why I Keep So Much Cash
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- Опубликовано: 11 июн 2024
- In this video, I'm going to talk about the importance of cash and why I like to keep a lot of it on hand. It's a strategy that a lot of investors use, and it can be really effective in protecting your portfolio during tough times.
Timecodes:
0:00 - Intro
0:33 - Cash Keeps You In The Game
1:50 - Cash Buys Opportunities
2:54 - Where to Hold Cash?
5:03 - Cash Gives You Peace
6:14 - Cash Keeps You Out of Debt
7:44 - Cash Gives You Time...To Think
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DISCLAIMER: I am not a financial adviser. These videos are for educational and entertainment purposes only. I am merely sharing my personal opinion. Please seek professional help when needed.
I agree! The peace of mind is by far the best part of having cash.
"If it costs you your peace, it's too expensive"
absolutely
Too much cash gives me anxiety thinking about the opportunity cost of not investing enough
Personally have a 3 year emergency fund and I just feel so at peace. My boss has complained that I’m not working fast enough recently, but I really don’t care if I get fired. 3 years is plenty of time to find another job.
you're a legend, now I want it too
When you go out there to find a new job, the reason why you were fired CAN be
Discovered
Becoming lazy and obstinate on your
current job sounds like "shooting yourself in the foot".
I believe in keeping a large cash emergency fund, I bought my cottage and car with cash and it gave me large discounts on both
Other reasons why cash is king. ruclips.net/video/ogzVxKfTm4Q/видео.html
Great advice. So many ‘experts’ preach the opposite. Accessible cash is comforting. Money doesn’t always have to work for you. It can be a nice warm security blanket.
After saving for years I just had a crumbling dangerous shower redone. When we opened the walls black mold was everywhere. The project doubled. I had more than enough cash to get mold mitigation, complete rebuild and the shower redone safely. Cash has always been Queen for me😉
I fully agree with you guys! I also kept a significant amount of cash on my account when I sold my property and the inflation during Covid years made me very nervous. But in a long term, it allowed me to buy another property that was rare to find on the market and now it allowed me to stay at home when I lost a job and to invest the time in a family and self-development while keeping my sleep calm.
I totally agree with you. Having more money at my disposal does give me peace of mind. Won't need to borrow from family members or the bank. Hate paying interest to the banks.
Yeah, they are evil, they need to make a living too but their rates are way too high, they are second only to loan sharks.❤
Im getting 4.45% on my citi savings account. That's where i keep all my liquid cash! After 401k and my HSA all remaining goes to citi savings and with zero debt that can be quite high each Month! Plan on retiring in 3 years at 62. Thanks for sharing and you have a new subscriber!
Omg we have the same experience where my parents stayed with us for 10 years to help with our 2 boys, so my husband and I can save money and reach our career goals. Love that piece of culture. My parents just moved back to the home country, and they said they have started their official retirement. Thanks to both sides of our Chinese parents to help us reach our financial goals too in our late 30s .
Q1 2024 I have had to spend $5k on vet bills between my two dogs. Having access to cash makes me not even think about it.
this is a very important video, and one of my favourite on money management. To keep liquid cash always worked for me ,and yet I noticed lot of people don't like the idea.
it gives you so much peace, forget the minimal interest, and the time to think is invaluable. It really is an adult security blanket.
thank you for your work.
Whoever thinks cash is trash belongs in one! Excellent advice as always, sir!
While the general stock market is up 22% lol
Technically it is physically disgusting and literally filthy. But everyone should have some tucked away.
Very clear and I totally agree. For me, I need to have cash available because of my rental properties, when repairs come, it comes in handy.
Tae, I love your take on this. I’ve especially never thought about cash buying me time and the ability to take the time to reflect, research, confer and make reasoned decisions.
Completely agree… on all points! With the rising rates, we savers are finally benefiting a bit with high yield savings accounts at 3-4%. It’s an added bonus to the security.
Still losing it due to inflation though. Use cash on a start business and bet on yourself.
High yield savings in banks that actually PAY Interest on savings accounts. Chase Bank sent everyone a letter in the regular mail some years back telling all customers that they no longer pay ANY Interest on Savings Accounts. So In other words, they just hold your money for you.
@@warrenlowe676 No You're Wrong, the average inflation rate over the last hundred years is approximately 3%, so if you're getting more than that then you are beating inflation, or at least keeping up with it in the long run. Short term the inflation has been high recently, but market has also been down, so you're not losing anything by gaining 4-6%.. Investing in start up businesses is very risky and you're more likely to lose it all.
@@warrenlowe676< stupid
@bonanzatime the market has been amazing though
Honest Guy
Great info and excellent channel, Tae. Thanks and keep up the good work.
Great points! Esp about potential parental care!
This guy is smart. Great content.
Good information!
so many times when the market crashed I wish I had more cash to buy the all time lows lol.
I love the bowling bumper analogy!
Awesome 👌👍 thank you Tae
I agree 💯💯 i heard Mark Cuban say in a interview that having large cash reserves helps him sleep better at night 😴 i always tell people you dont have to sacrifice and have crazy amounts, but at least SOMETHING to help uf anything happens...
Another great recommendation! Having cash is king!
When I reached 500K in cash I worried that the FDIC only insured 250K of it. So now I have around $1.1 M spread through 3 banks...250K in savings, 250K in CDs and the rest in my regular account. I did worry alot about the bank's stability and that's one of the downsides of having too much cash.
Curious . . . What is a "regular" account as opposed to your savings account ? Is it a checking account ?
What do you do for a living?
Are you based out of Nigeria ?
@@jayp4114😂
I try to think of our cash savings as part of our overall portfolio. We lose a little bit of return in exchange for liquidity. And although our cash is in a high interest savings account and certainly "liquid" it takes about 6 days for a transfer so that gives a time buffer to think through things. We also keep a checkbook buffer of one and a half months expenses at our fingertips and for the last 7 years that has allowed us to avoid pulling from our emergency fund or going into debt.
I disagree on CDs. You divide up and stagger the cds (a ladder) so they mature at different times. I also think young people should invest more to take advantage of time in the market
This. Holding more cash short sighted, investing rewards more over time
Insightful information
having cash on hand means you can buy something sweet without missing out on a low price . Opportunity costs matter just as much :)
This is a fudge description of market timing. Good luck with this one.
Yes, $Cash is King and peace of mind is priceless. BTW, would you pay down your home mortgage payment too, or keep more and more $Cash?
Reserves scale with the size of my portfolio.
And I increased it when I retired.
It’s the money above that amount I want working hard.
I love the way you think.
So true!
Cars are never a problem for me. I own 2 indestructible sh*t boxes and used to be a car mechanic.
Is it a Gx or 4Runner by chance? 😁
@@luisgracia6050 Those are good ones too. Mine are mid 90's and early 00's Hondas. These shall be passed through my bloodline for generations.
Well done! I agree 100%. I extracted my wealth from options premiums and converted to half equities and half cash.
Other simpler reasons cash is king. ruclips.net/video/ogzVxKfTm4Q/видео.html
I completely agree !
Great info 😃
Another point of view why cash is king. ruclips.net/video/ogzVxKfTm4Q/видео.html
Excellent video
Great video
Thank you for all the good information. I never knew Warren Buffett bailed out Goldman Saks.👍... also I see this was uploaded well over a year ago, so you are very insightful because keeping cash is even more relevant today with cash pulling in over 5% on average. That's a tidy sum.
He didn’t bail them out…he bought them, like Mr Potter in “It’s a Wonderful Life.” :)
I think this depends on how much you make. If you make a very high income it's fine to stash 6-12 months in cash. But for most people it would take too long to save that. They really need to get going on 401/Roth/HSA with 3-6 months' savings. Or they'll never get beyond just the 401k match.
No guard rails when i was a kid or i never used em. Didnt play tee ball either. Played the real game. Anyway..yeah keep some cash handy for sure. Good info. Buy low. Buy quality, low. Sell when need money or find a better investment. And remember...time in market beats timing the market...most of the time! Keep fees low and diversify. Dont be greedy.
Good video
really good ideas - keeping cash easily available make sleeping easier
Regarding CDs and low interest bank accounts, the better alternative according to Humphery Yang are high yield savings accounts.
Totally agree , my brokerage account which has cash reserves
I keep a bunch of cash in a high yield FDIC Insured savings account. Paying me 41/2% APR currently. I can have it back in my local bank account in around 24 hrs if I ever need it.
Why wouldn’t you put cash into a High Yield Savings Account? 5%+!
12 months seems excessive. Depending on my personal liabilities that could cause me to need money imediately, such as family car etc that would determine how much cash i would need. But 12 months is so much money that could go to investing
Finally found a relatable video
100% agree.
Yup. High rate saving account and mm for me 👍
Very good video. Whenever you ask a certified financial predator, sorry a certified financial planner, they will always say you have too much in cash and you should always give it to me to lose, sorry to invest. I am not always sarcastic, sorry realistic.
In a money market account making more return than inflation, I agree; it’s nice to have a solid reserve. If your return is less than inflation, then your cash’s value will erode.
Vanguard has a money market account that offers 5% interest rate. Good video.
500k in rainey day fund or emergentcy fund.
Cash is king but stocks went up 25% last year. I keep 3 months emergency fund. My ROTH is at $250k which gives me peace.
You have the reason Berkshire is holding that much cash backwards! Buffet himself said that he doesn't want to hold cash, he wants his money invested. He's not holding it to wait for opportunities, but because he doesn't find any opportunities. Same result but very different reason. NEVER hold too much cash waiting for opportunities, this would have cost you immensely during the 2010s bull market. An emergency fund is a must-have, though.
sound advice-i will takeitand work on it; this weeki am unable to do much due to medical problems
Tae, I keep a lump sum of cash in Marcus Goldman’s high yield savings with an interest rate of 1.30%. I am winning vs. a regular savings account in a bank. My money is accessible and safe!
Discover savings is 3.6% right now
Salemdirect online is 5.1, I make $400 a month on my emergency fund. Not a cd so no time duration
Amex is offering up to 4.5 - 5 %
@@AltaicPride01I that was a typo it was 4.30% last year when I responded to this post. I am know at 5.50%. Thanks for the info.
Guys….money market ETFs, some in the 5.3% range right now and funds highly accessible within a couple days, no penalties. If possible build 6-12 months there and a couple of months in Checking account and one is in pretty solid shape.
Hear! Hear!🎉
After the hurricane in Houston couple years ago all the cell pones were dead, ATMs dead, credit card processors dead! If you didn't have adequate cash on hand you were dead in the water!
Probably it's best to get at least some interest on cash savings to help offset inflation
Also very important long-term disability, private policy (not through work ) and long-term care policy
Crypto is the new king.
I understand your points, but I run on the lighter side. I don’t have kids, but if I had a family, I would keep more cash certainly.
How do find a secure high yield savings account?
Question: is This cash separate from or par of an emergency fund
Cash in this video is not cash. But in your account. Keep actual $$$ cash at home as well. I use it to get great deals on landscaping, home fixes, etc.
Keep your liquid cash in a high yield savings account.
That’s where I keep mine. For my emergency fund.
@@buyyourownfreedom
An "emergency" can mean that any and all forms of communications with that facility (bank, credit union, etc cetera) are
Down...no possible communication
What about high-yield savings accounts?
Remember, it also depends on your currency. Of course, cash is good in USD or Euros, but in places where inflation is more than 15-20% a year, it will be better to have cash only if you will use it in 6-12 months
I have a behavior problem where cash on hand causes me to spend more. If I invest and it’s illiquid I won’t spend it… making my asset less liquid forced me to be more frugal. But maybe I should work on the underlying problem and keep more cash
Yes that’s a separate issue. Having cash gives you peace of mind, not more incentive to buy more.
I agree with all your well laid-out points. I would add 2 more reasons why cash is king that i think you’ve missed.
1) In addition to liquidity, cash is fungible. Real estate is good to hold, but it’s not completely fungible. And I’ll assume you referring to the USD when you are talking about cash, and the USD is the most fungible of all.
2) Cash can be anonymous and thus hidden from the tax man. So when many Americans (especially on the coasts) have a problem buying their first home because “we lost out to an all-cash offer”, that’s because that home was usually bought by dirty money coming from overseas, usually mainland China. Why do the Chinese buy homes all cash? A) they have it, they need to get it off the mainland, and they need to spend it. B) All cash purchases bypass any bank scrutiny, credit checks, and government checks, and other approvals.
And THAT (in addition to your reasons) is why cash is king.
What about gold do you see gold as a form of cash
All i have is cash.
What do you think ABOUT FIXED ANNUITY?
Tee Kim I completely agree with you. My biggest fear is CBDC's This is my biggest fear What do you think. Do you think that CBDC's will replace paper currency.
I want to keep cash too, 6 months minimum, but not too much. I am doing it slowly.
Good now i know who to rob lmao
I also keep $137 Billion in cash
Unfortunately, I forgot where I keep it! 😀
To boost your feel good day, just put a stag of $50 dollar bill in your wallet. You definitely will have a more confident day.
Only thing in terms of “no matter what happens” would be insane inflation.
I’m on your team but just my thoughts.
That'll still wipe you out if you have your money in investment funds and such though wouldn't it?
I would have thought that the only way to survive that is to have assets and keep them until the storm is over
@@gomperhoobletyes. And that asset is definitely not cash 😂
@@pistopitpit For sure
Correct. Cash is never truly king, it’s dying a slow death. The only purpose of cash is actually buy valuable things that will hold their value. Cash is only “king” temporarily. At the end of the day it’s still a currency that government devalues everyday by printing more of it
Yeah I’m saying liquidity is king, but cash gets crushed over long term
I know people who lost their lifesaving because they kept in cash….inflation money reforms And simply instability of financial save guard of state….maybe cash is good when you are have some other investments…what if you don’t have gun to protect and no food supplies???
HIGH YIELD SAVINGS ACCOUNT that is FDIC insured there I said it
Keeping cash in roth IRA to me means it is inside the account but held in CASH, not equities. So you're not selling any depreciated assets in an emergency... also no HYSA coverage?
3-6 month isn’t enough. Especially if you own a house or have kids. Roof replacement is an easy $10-15k
Yeah it must have been nice not making 22% last year
Just curious, do you keep 6-12 months of current living expenses? I just think if I lose my job I'm probably also cutting costs and wouldn't need quite as much.
I would, even the normal living expenses would be cut down, other unexpected expenses may occur, especially the medical and insurance premium. my husband had a stroke last year, the insurance stopped paying for the nursing home after two months, we ended up paying out of our own pocket around 8k, having enough cash available can give you a peace of mind.
@@crystalclear2089 thanks, I totally overlooked the medical insurance part.
@@herewegotoday you are welcome. It’s an eye opening experience, the nursing home cost us 8k/month for 5 months, on top of that we both lost our job during the time, it’s very stressful, fortunately my husband has a long term disability insurance to cover some and we have a sizable cash available with no debts (thanks to my Chinese culture, it’s all about saving money). IMO, you really need to have at least 12 month emergency funds in case of any catastrophic event in your life.
Ir you have a diversified portfolio with us stocks us bonds eur stocks and eur bonds and gold you will always have “líquid” and some of those assets might be temporary down but not all 5
Now, places are giving a discount if you use cash.
does he mean cash as in literal paper cash? or like having it in HISA?
Haha If you listened you'd know. He means money that could be available immediately or very fast if needed, as opposed to money kept in investments that cannot easily be withdrawn without significant penalties or loss, not necessarily "money under the mattress", can be in savings account, etc.
Don’t you pay a penalty if you withdraw from ROTH before age 59.5?
After 5 years of opening your roth you can withdraw all the money you contribute whenever you want but not ONLY your contributions not your gains
tl;dr; It's not an emergency fund if it's invested.
Fully agree. People look for the sugar hit of spending. Cash and gold are king
I never thought holding cash is for losers. But I have never held cash other than for immediate bills. My first real jobs after college i routinely took advantage of stock purchase plans and stock options to generate a lot of assets super fast. Obviously in a taxable brokerage that can be turned to cash in a few days. That was my emergency fund. If i needed Anything sooner it can be covered by a credit card. If it was more urgent then theres probably a ransom note involved, in which case my first call would be to the FBI not my bank.
Cash is trash for long term investors. Period. With interest rates rising it can be tempted to park cash in savings account. But people forget that equities will still prove to be much better investment in long term. Higher inflation, higher interest rates only mean that expected future returns on equities are also higher.
True, except we don’t know exactly how long “long-term“ is. 10 years, a lost decade? 15 years like the dot bomb era? 25 years like the Great Depression? 35 years like Japan (and still counting)?
@@ericj9011 that is a good argument. People often speak about stock market recessions often in the context of how much stocks usually fall. That is not scary to me that they can fall 50% and one day I will wake up with my portfolio halved in value. Not scary at all, I am mentally prepared and educated about it.
But what is scary are those long lasting periods of market downturn. Decades of decline. It is something I am not ready in decumulation phase for sure. But in accumulation phase this feels like a bitter opportunity to buy cheaper assets. I also think that investing globally and dca-ing reduces the risk of permanent loss by quite a bit.
2024 Tae: cash is for losers and stock is king 😂
What really would have stabilized a shaky market would have been regulations that ensured Goldman sacks hadn’t committed so many financial crimes in the first place. Shame on Berkshire Hathaway
If cash is king ..gold is god