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
Start getting results with the 10/80/10. See how your returns and your cash flow can benefit by watching George's Best Investing Strategies training, here.
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.
I park temporarily my excess cash in SHV and SHY ETF US Treasuries. Very liquid.
For amounts below 10k per year and for longer time frames: Series I savings bonds. Its yield is indxed for official CPI inflation, no great but better than the negative yielding marketable treasuries like TIPS. Also, you can redeem without penalty after 5y, or if great investment opportunities arrive, just take a 3m interest penalty to get your money back immediately.
Else, just park it short term with the bank with best interest. Ally for example still offers 0.5% on savings & MM accounts, beats all the short duration bond etfs.
I have 10,000 sitting in the bank for emergencies but wondering how can I grow the money but if I have a emergency I can get to the money quickly.
I’d convert it to USDC (a USD Stable coin) and leave it in your celcius wallet. You can earn a 10% APR. I park my emergency cash there. Highly liquid. I don’t want to come off like I am shilling you a spam link or something, but here is my celcius referral link that will give you an extra 40.00 in BTC when you sign up. Celcius allows you to buy USDC or bitcoin via credit card or bank transfer, which takes about 7 days to clear. Blame the banks, not celcius. So if you want to take advantage of… Read more »
I say leave it in the bank if it is for an emergency.
For high net worth investors with extra cash consider pax equity’s stable fund which pays from 4-7 percent depending of how long before you can withdraw the funds. It is fully insured (fslic & Loyd’s of london) & has double collateral on all loans. Income left in the fund is not taxed until interest is withdrawn. Contact Michael pottoff with pax equity in houston tx if interested.