Financial Samurai - Forums

Financial Freedom => Financial Advice From The Community / Reader Profiles => Topic started by: bf312 on November 02, 2018, 01:21:08 PM

Title: Cash allocation
Post by: bf312 on November 02, 2018, 01:21:08 PM
We've all read that Millennials, to our detriment, hold more cash than their Gen X, Boomer peers. Conversations with friends seem to corroborate this. What say you, FSF community?

Age / Life Stage / Cash Allocation % Financial Assets / Why.  I'll start:

31 / actively employed / 25% cash / Working in highly cyclical finance role, pondering future real estate investment <12 months
Title: Re: Cash allocation
Post by: polama on November 02, 2018, 01:43:00 PM
33 / actively employed / 5-10% cash depending on if you include home equity as an asset / Basically just emergency fund in cash. Trust the market to outperform cash in the medium run and longer
Title: Re: Cash allocation
Post by: Hayden on November 02, 2018, 01:53:02 PM
21 / Full Time Student-Actively Employed / 31% cash / Piling as much as possible to take advantage of market corrections and dips in real estate
Title: Re: Cash allocation
Post by: Dami on November 03, 2018, 03:00:00 PM
26/ Employed / 21% in a high yield savings account / Assessing the markets and waiting for the right time. I already have a lot in stocks. I'm exploring a 2nd rental property or waiting for a bear market, if that occurs.
Title: Re: Cash allocation
Post by: rluks on November 13, 2018, 03:29:35 AM
28 / employed / 55% cash / Saving as much as I can to build an Emergency fund first (remaining 24% in retirement fund and 21% in investments)
Title: Re: Cash allocation
Post by: deific on November 13, 2018, 05:59:37 AM
39 / Employed / 20% Cash $$ / Emergency Account and $$ not in the market waiting for opportunity (actually just used some).
Title: Re: Cash allocation
Post by: mbb_boy on November 17, 2018, 08:49:57 AM
25-25/employed/2.5%/ Just my emergency fund. Don't see a reason not to be fully invested
Title: Re: Cash allocation
Post by: couchfi on November 18, 2018, 09:55:57 PM
30-35 / Married, 1 child / 10% not including primary residence / 1 year of emergency fund + some cash I'm trying to figure out how to allocate.

My target for cash is 5% or 1 year of spending whichever one is greater. Not a fan of timing the market at this stage in life as I'm not confident in my investing instincts and research.
Title: Re: Cash allocation
Post by: polama on November 19, 2018, 06:37:41 AM
A follow-up question for the group: Do you think your cash reserves will increase/decrease/stay the same in the coming decade?

I'm wondering whether this generation will always have a larger cash cushion (decreasing bankruptcies perhaps?) or if this will start flowing into the markets (giving them a tailwind in the coming decade)?
Title: Re: Cash allocation
Post by: rluks on November 19, 2018, 10:58:02 PM
Percentage-wise my cash allocation will gradually decrease as there will be more money coming to investments. But I'll always want to keep a comfortable 6-month cushion for rainy days (and keep adding to it to keep up with the inflation). So right now, I have a lot of cash.. 55%, but that's gonna keep coming down. I don't think I'll care about % of cash in my portfolio as long as it's big enough buffer (in absolute amounts of money) for eventual s*it hits the fan situations.
Title: Re: Cash allocation
Post by: Hayden on January 05, 2019, 09:02:58 AM
Quote from: polama on November 19, 2018, 06:37:41 AM
A follow-up question for the group: Do you think your cash reserves will increase/decrease/stay the same in the coming decade?

I'm wondering whether this generation will always have a larger cash cushion (decreasing bankruptcies perhaps?) or if this will start flowing into the markets (giving them a tailwind in the coming decade)?

Polama, I tend to think that cash allocation will increase with the generation to come. There is so much information about market volatility and real estate dips that the idea of having a high cash cushion is becoming more of smart financial idea.

Given that the FIRE movement is in full force, freedom and security are the two factors that are going to start driving increased cash allocation.