Hello all and Happy Thanksgiving!
I was reading the following thread https://www.whitecoatinvestor.com/forums/topic/biggest-financial-blunders/ trying to learn from others' mistakes.
I must admit that I force myself to participate in this forum as opposed to being a passive reader in order to become an active learner. However, much of the knowledge here is above my experience and understanding. I read the WCI book so I feel like I know some of the basics. Despite this, it feels like when I was a intern in the MICU trying to figure out what the heck PRVC, PS etc meant and how to manage vents.
Therefore I will plunge ahead and ask what many likely consider a very "silly' question. What does carrying too much cash mean exactly and how does one define "too much?"
What I assume carrying too much cash is too much leftover money after expenses and investments. For example, if someone makes $200k a year and maximizes investments in pre-tax (403b/457, HSA), post tax (Roth), fully funded emergency fund and diligently pays all expenses (mortgage, insurance etc.) and has $50k extra for the year then would that be "too much cash?"
Let's assume for simplicity sake that student loans are paid off (just to avoid the invest vs. pay off loans debate). What then should one do with the extra money? Mutual funds, money market, REITs, all the above? How much extra do they keep as "cash" (which I assume means parked in a savings account getting like 1%)?
Sorry if this is a silly question.
I was reading the following thread https://www.whitecoatinvestor.com/forums/topic/biggest-financial-blunders/ trying to learn from others' mistakes.
I must admit that I force myself to participate in this forum as opposed to being a passive reader in order to become an active learner. However, much of the knowledge here is above my experience and understanding. I read the WCI book so I feel like I know some of the basics. Despite this, it feels like when I was a intern in the MICU trying to figure out what the heck PRVC, PS etc meant and how to manage vents.
Therefore I will plunge ahead and ask what many likely consider a very "silly' question. What does carrying too much cash mean exactly and how does one define "too much?"
What I assume carrying too much cash is too much leftover money after expenses and investments. For example, if someone makes $200k a year and maximizes investments in pre-tax (403b/457, HSA), post tax (Roth), fully funded emergency fund and diligently pays all expenses (mortgage, insurance etc.) and has $50k extra for the year then would that be "too much cash?"
Let's assume for simplicity sake that student loans are paid off (just to avoid the invest vs. pay off loans debate). What then should one do with the extra money? Mutual funds, money market, REITs, all the above? How much extra do they keep as "cash" (which I assume means parked in a savings account getting like 1%)?
Sorry if this is a silly question.
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