Ep 19: How Much Cash Should You Keep in Your Portfolio?
We all like to check our bank account and see a healthy number staring back at us, but at what point do you have too much cash on hand? Today we want to focus on the benefits of having cold, hard cash but also why it’s important to understand that too much cash will bring your portfolio down over time.
Click the timestamps below to jump ahead in the episode…
Key Takeaways From This Episode:
We all love having cash on hand. Whether it’s for spending or saving, seeing that healthy bank account creates a sense of security.
Cash is always going to have a role in your financial plan, but keeping too much in your accounts will prevent you from enjoying long-term growth.
On this episode of the Financial Forum Podcast, Chris Scalese will provide some guidance on how cash should fit into plan. We know that it’s important to keep money around for bigger purchases like a car or a vacation and having an emergency fund will always be a priority. We even see clients that like to keep cash around to help their children or grandchildren.
That’s why we work with people to determine how much cash they need. Everyone’s situation is different, but we all need to have a plan for what to do with our money after those needs are covered. Without a plan, your money will lose out to inflation over time. Money market accounts just don’t provide the same interest rates they did 15 years ago so let’s find ways to invest that cash to maintain your purchasing power.
It’s time to get the show started. Join us by using the audio player above and click on the timestamps below to skip around to specific topics.
[0:44] – What are the most common needs for cash that requires you keeping it in your bank account?
[2:43] – Then what’s the problem with having too much cash?
[3:59] – How do you help clients determine how much cash they need?
[6:37] – What makes people obsess over a certain amount of cash?
[8:03] – In what ways can clients invest cash but keep it out of the market to avoid the volatility?
[8:49] – Fixed index annuities might be an option.
A Potent Quotable:
Understanding the Ins and Outs of Mutual Funds
Are You Sabotaging Your Own Retirement?
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Chris Scalese – Contact