What do I do with my extra cash?
On a recent Rebel Capitalist Pro live Q&A, a member asked,
“I’d like to get your thoughts on what to do with the cash if you were in the following situation:
Cash – 35%
Rental property (no mortgage) – 15%
Gold/miners – 25%
Stocks – 25%
I am in my early 50s and my income, fortunately, affords my family comfortable living and leaves some extra for investing. I plan to retire in the next few yrs. I am not an expert investor by any stretch. I just bought a house w/ 20% down + 30 yr. The mortgage is the only debt I have and is appx 10% of my net worth.
I appreciate your thoughts.”
George's take is fairly simple. If you are investing your money using a 10/80/10 split, which George talks about in this free training here, and you have extra cash laying around, then you have a couple of choices…
Cash for investing
If the cash amount is below $250,000, then it's not a bad idea to leave it in an FDIC insured bank for the short term. This is assuming you're waiting on a market correction or an entry into a new position and you like having dry powder on the side for more investing.
Cash for saving
If you are sitting on cash, as a safety net, and the plan is to simply hold it, then consider buying short-term Tbills with your cash, then roll those over on a regular basis. it's especially important if you exceed the 250k FDIC insurance limit.
10/80/10 Investing Strategy
What do you do with your spare cash? Is it sitting in a bank account, your trading account, or are you buying short-term Tbills? Something else?
Let George know in the comments.