How To Better Manage Your Private Investment Capital Calls

Recently, I temporarily went broke because I improperly managed my private investment capital calls. Because this happened, I thought I'd discuss some straightforward solutions to ensure you always have liquidity.

If you are a new private fund investor or plan to invest in more private funds to diversify your investments, please learn from my errors. Not only will you learn how to better manage your capital calls, you'll also learn the process of how private funds reinvest capital.

What Is A Capital Call?

A capital call is when a private fund asks for a percentage of the capital you’ve committed to investing in their the fund, e.g. 10% capital call of $100,000 committed equals $10,000. Within three years, usually, all your committed capital will be called by the private fund as it takes time to find new investments.

A margin call, on the other hand, is when your brokerage asks you to deposit more funds to meet the minimum margin ratio due to a decline in the value of your margined stock. If you do not deposit funds, a brokerage may sell your stock to meet the minimum margin ratio.

How I Recently Went Broke

As an aggressive investor since 1999, I hardly ever have more than three-to-six months' worth of living expenses in my checking account. Checking accounts generally pay terribly low interest rates. Most of my incoming money gets dollar-cost averaged into an S&P 500 ETF and private real estate funds.

However, after Treasury bond yields surpassed 5%, I decided to shovel my remaining cash into Treasuries. As a result, my checking account balance dropped to less than one month's worth of living expenses.

My plan for maximizing my investment returns was going well until I got a capital call for $20,000. The venture capital fund hadn't made a capital call in six months. It was time for me to scramble.

Capital Call for $20,000
10% capital call for $20,000

Coming Up With Funds To Meet The $20,000 Capital Call

To meet the “unexpected” $20,000 capital call, I transferred money from our joint checking account. This joint checking account is shared between my wife and me.

We set it up mainly as an account for our Lake Tahoe property vacation rental. Doing so, we can more easily separate the financial transactions associated with the property, such as rental income and property taxes.

After paying off the vacation property mortgage early, the joint checking account started growing quicker by $3,500 a month. Further, the 2022/2023 winter season so far has been epic, bringing in more snow and more rental income than average.

Luckily, the combined money from my account and our joint checking account was enough to cover the $20,000 capital call. I was good to go!

As a limited partner (LP), the last thing you want to do is not meet your capital calls. If you become an unreliable LP, much like an unreliable tenant who doesn't pay rent on time, then you may not be invited back for the next fund.

I was feeling good until I got another surprise capital call from a different private fund! After a dormant 2022, the capital calls were suddenly flooding in!

Going Broke Trying To Meet A Larger Capital Call

This time, my capital call was for $61,351 from my fourth venture debt fund investment. It was a 20% capital call for my $300,000 commitment plus a true-up for management fees.

I have been investing in venture debt since my business school buddy opened up his own fund around eight years ago. I wanted to support his new entrepreneurial endeavor.

As his firm grew, I kept on investing in his new funds despite becoming a smaller and smaller fish. His main investors are now institutional investors.

$60,000 capital call

Unfortunately, I didn't have enough to fund the $61,351 capital call from my checking account. Uh oh. What should I do?! I had five weeks until the money was due.

How I Cobbled Together $61,351 To Meet My Capital Call

Should I borrow money from friends? Nah. It's best not to mix money with friendship.

Should I work extra hard on a side hustle for four weeks until the capital call was due? I could teach tennis for $100/hour. But that would take 614 hours if I didn't have to pay taxes.

Should I get a J-O-B with a juicy signing bonus? Hmm, who's going to hire this stay-at-home-dad of five years without a fancy pedigree in this environment? Nobody.

I was at a loss. So I did what anybody in my situation would do. I went looking for change in my sofa. Here's what the process looked like:

  • Analyzed all 30+ financial accounts to see which had extra cash sitting idle to transfer over to my checking account.
  • Went through all my Treasury bond holdings to see which 3-month T-bills were set to expire within four weeks.
  • Told my wife to deposit a check my mother had sent her as a gift, which we did not plan to deposit. This made my mom very happy.
  • Ratcheted down expenses and paused investing any cash flow for the next five weeks
  • Increased my active income by doing more consulting, coaching, and business development

Where There Is A Will There Is A Way

The next five weeks were actually quite exciting trying to come up with the funds. Without my normal cash cushion, I felt vulnerable.

Could I survive for five weeks until I began receiving my various forms of monthly passive income (rent, dividends, coupon payments, distributions) and active income (online income, consulting)? The challenge was on.

This situation also opened my eyes as to how much idle cash a household might actually have that isn't being optimized.

For example, you might discover that one of your taxable investment portfolios has idle cash due to an accumulation of dividends that weren't reinvested. You might also find that one of your bonds matured long ago and you didn't realize it until you looked.

Finally, I discovered I have the ability to make more money if I want to. The opportunities to coach or consult are endless. So are new business deals online. Having a purpose to make money feels great! I just haven't wanted to until going broke because I had decided to go into decumulation mode in mid-2022.

You, too, might be surprised by your ability to make more money if you really need to. Hence, if you have a strong ability to make side hustle money, your need for liquidity may be less than you imagine.

Limited Partners Likely Won't Get Penalized For Being Late

Having invested in private funds since 2005, I've been late meeting capital calls before. The main reason for the lateness is I simply missed the e-mail alerts. Generally speaking, I'm terrible with e-mails.

Every time I'm late, and get an e-mail saying that I'm late, I apologize and immediately wire the funds. Out of the five times I've been late over 18 years, I've never once been penalized.

In other words, if you're having a difficult time meeting your private fund capital calls, you will likely get a 30-day grace period to meet your obligations after the deadline before problems may arise.

If you can pay your capital call by the deadline, I'd schedule the payment for the very last day. This way, you gain optionality in case something goes wrong. Further, you earn more interest income from your cash.

How Does A Capital Call Work From The Private Fund's Perspective?

Under normal operations, a private fund will have a 60-90-day line of credit with a bank to fund deals. This way, a private fund can immediately invest in a company once the term sheet is signed. Winning deals is a hyper-competitive process.

This 60-90-day line of credit acts as a bridge loan for the private fund. Once the line of credit is drawn to make an investment, the private fund then makes a capital call to its limited partners with a four-to-six-week deadline. Once all the limited partner's funds are received, the private fund then pays back the line of credit to its bank.

When there are bank runs, these bridge loans may stop. As a result, the funding of private companies may get more difficult. Operating private funds may also become more difficult.

Every private fund I'm investing in is currently diversifying its banking relationships to ensure the process of raising capital and investing in companies remains smooth.

Without bridge loans for private funds, limited partners will have to be even more vigilant in monitoring their cash and cash flow. Because once there is a capital call, there may be even less wiggle room to be late.

How Long Does It Take For Private Funds To Reinvest Proceeds Once Capital Is Called?

We just learned private funds have lines of credit with banks to immediately fund deals once the term sheets are signed. Therefore, as a limited partner, once you make the capital call, it's usually up to the private fund to pay the line of credit back to the bank.

In other words, once the limited partner sends in the funds, the LP's responsibility is over. The LP shouldn't have to worry about their funds getting trapped at a bank and not reinvested into a deal because there's a high likelihood the private fund, through the bank, has already made the investments.

I bring up this point because I had wired a sizable capital call to First Republic Bank two weeks before it started melting down. My concern was whether my funds would somehow be lost in the chaos.

However, after talking to one of the general partners of the private fund, he mentioned the majority of the funds from the capital call were already reinvested in several new companies. They had used their line of credit with First Republic Bank.

In this situation, if you are a limited partner who ends up never meeting your capital call, then you will face the wrath of the general partners. The GPs will have to make up for your shortfall somehow. They could withhold distributions you were entitled to earn until your capital call is met or they could even sue you.

Best To Always Honor Your Commitments As An LP

As is always the case, being an honorable person who promises to do what you say you will do is the best way. Being dishonorable with money, yet still getting rewarded is what enrages financial people the most.

By funding companies first, general partners are taking a risk its limited partners will honor all their capital calls. If limited partners don't honor their commitments, then they will be blackballed from their fund and potentially the entire private fund industry.

I suspect some general partners will become more risk-averse and stop prefunding companies before all its limited partners have sent in their capital calls. If so, it will take between thirty to ninety days on average to reinvest proceeds once capital is called.

The positive of this is that the general partners reduce their financial risk. The negative is that the private fund becomes less competitive in winning deals compared to more liquid private funds.

How To Better Manage Your Private Investment Capital Calls

My latest capital call fire drill is another reminder that investing family money can feel like a full-time job. You've got to be extremely focused on managing every financial account. Otherwise, you will face potential penalties, miss out on future investment opportunities, or have an inappropriate asset allocation.

One of my main goals of investing in private investments is so that I don't have to stress about how to invest my money. It's also nice not to be reminded of the investment's daily value, like stocks. This “out of sight, out of mind” investing philosophy is helpful only if one can properly fund them!

So here's what I'm doing now to better manage my capital calls.

1) Organize everything in a spreadsheet

The more private investments you have, the more you need to be organized. Your spreadsheet should have the following columns:

  • Date Of Investment
  • Fund Name
  • Investment Commitment
  • Lifespan Range Of Fund
  • Estimated Capital Call Amounts By Year
  • Capital Call As Percentage Of Cash Flow
  • Capital Call As Percentage Of Investments

Once you create this spreadsheet, you should be able to better plan your funding.

2) Be realistic about your future income and cash flow.

When it comes to investing in private funds, I've found it's easy to commit too much. This is because there is a timing difference between your capital commitment and when the money is actually called.

For example, when you invest $250,000, the $250,000 doesn't all get invested immediately. Instead, the $250,000 gets invested through a series of capital calls usually over a two-to-four-year period.

Because you've identified an all-star investing team in an asset class you love, the time lag involved, and your optimism about your own income, you may be inclined to invest more than you should. Beware. Not everything always goes according to plan. 

In 2021, many people invested in private funds when their income and net worths were at all-time highs. There is a natural tendency to extrapolate stronger income and more net worth growth over the years. However, the bear market returned in 2022 and now some investors are overcommitted.

This happened to me in 2007. I had made the most amount of money in my career. So I bought a $715,000 vacation property I didn't need. Then the global financial crisis hit, my income went down by 50%, and so did the value of my vacation property!

Be realistic about modeling your future income, distributions, and net worth. Come up with a Base Case, Bear Case, and Blue Sky Case.

3) Be stringent with your capital allocation percentages.

Know your risk tolerance and your financial objectives. Then come up with a net worth allocation model and follow it closely. When situations change, adjust accordingly.

Investors regularly blow themselves up when they allocate too much capital to speculative investments. We saw this happen with cryptocurrencies, SPACs, NFTs, meme stocks, and unprofitable growth stocks. When times are good, these investments perform extraordinarily well. Not so much when times are bad.

My target asset allocation towards private investments is 10% of my net worth with a maximum limit of 15%. As the percentage creeps above 10% due to investment gains, I will start adjusting downward my allocation accordingly.

Don't let investing FOMO make you invest more than you should. It's very easy to want to give all your capital to rockstar investors, if you can. Great marketing materials are effective for a reason.

Take a look at Sequoia, the premier venture capital company in the world. If the company gave me the opportunity, I would have happily invested 50% of all my assets into several of their funds. After all, if Sam Bankman-Fried was willing to invest hundreds of millions in Sequoia funds, why shouldn't I?

However, according to latest reports from Business Insider, supposedly half of Sequoia's funds since 2018 have posted losses.

In other words, there are simply no sure things when it comes to investing in ANYTHING or with ANYBODY. As a result, diversification and discipline are in order.

4) Listen in on the quarterly updates and get to know a general partner.

If you read the quarterly updates and tune-into the quarterly video or voice calls, you'll get a good idea of the status of the fund and its future investment plans.

If you know one of the general partners, you can easily get even more detailed insights into what the planned next investment is. Making an investment could take six months to execute. Therefore, you can get a much earlier heads up about when a potential capital call might come.

My problem is that I barely read or listen to any quarterly investment reports or calls. I'm more interested in writing on Financial Samurai, working on my next book, spending time with my family, and playing sports. The less time I spend staying on top of my private investments, the greater the Return On Investment (ROI).

I've already done the due diligence upfront by researching the asset class and the general partners. Once I've decided on the capital commitment amount, that's it. There's no turning back. No amount of work I do will change their investment decisions.

I'm willing go to pay the private fund fees to offload my investment mental load onto the general partners.

Embrace The Excitement Of Being Stretched Financially Thin

I'm glad these $81,351 worth of capital calls came in March 2023 and not at the end of 2021 or in 2022. Hopefully, this means the general partners have found better deals on both the equity and debt side.

This spreading out of capital calls is another positive of investing in private funds.

Bear markets generally last about 15 months. Hence, if the capital calls are spread over two-to-four years, there's a lower chance limited partners end up investing most of their funds at or near the top of the market.

I have a “go broke to win big” philosophy. The philosophy states that so long as you feel broke, you will do everything you can to not feel broke anymore. Why? Because we are all rational beings!

Unfortunately, as we get wealthier, we get lazier.

When we feel rich, we happily let our cash sit in a 4.5% yielding money market fund instead of clicking some buttons to receive 0.5%+ more in Treasuries.

After 25 years working, we no longer have as strong of a desire to get in before everyone else and leave after everyone else. Face time is for the young!

After 20 years of marriage, we no longer bother working out and eating as well. We've already found our life partners who are too afraid to leave us for a better life.

The best way to feel broke is to invest as much of our cash as possible. By treating our investments like expenses, we will grow rich. And once we grow rich, the trick is to keep that hunger alive!

Reader Questions And Recommendations

Anybody else invest in private funds with many capital calls? How do you stay organized enough to always meet your commitments? Where do you source capital to meet your capital calls if you are short?

Check out Fundrise, my favorite private real estate investment platform. You can invest in private real estate funds that specialize in single-family and multi-family homes in the Sunbelt region. Thanks to technology and work from home, the demographic shift toward lower-cost areas is here to stay.

Pick up a copy of Buy This, Not That, my instant Wall Street Journal bestseller. The book helps you make more optimal investment decisions so you can live a better, more fulfilling life. You can pick up a copy on sale at Amazon today. 

For more nuanced personal finance content, join 55,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 

About The Author

32 thoughts on “How To Better Manage Your Private Investment Capital Calls”

  1. Check out Arch, it’s a digital admin for alternative investments that aggregates private investment data from portals into their tool and allows you to manage capital calls from their platform. Super intuitive and quick time to value

  2. We have always enjoy your articles, but even at our age we are still heavily invested in ‘hands on’ real estate.
    August 2022 we acquired 4 properties from an investor friend going bankrupt. He was morally & financially devastated by the “no need to pay your rent” Covid moratorium, that was also compounded by a 60% drop in value of his 401(k). (Yes he did vote for Biden).
    We took control, evicted, aggressively raised rents & decided to rehab for resale. But then discovered with so much demand for rental accommodation our ROI on these properties hit 12%, 16%, 27%, 43%. That does not include the impressive implied increase in resale value of these now rehabbed properties.
    As an aside we had a nice 53 yr old tenant die from a sudden heart attack (at the racetrack). After his son took the 30inch TV & 2001 Jeep, our maintenance guy was left to dispose of the tenants ‘entire life’ in 4 large trash bags. Sadly we have & continue to see, so many in dire financial straights.

  3. I like your adjective……..temporarily bankrupt………….80K to pay capital calls………..
    I also went there this month……..100K in basic taxes….. Our state piled it on but also capital gains on one rental………….the middle class is rolling into lower class.
    Very painful…………

    But in terms of legacy the government is considering taking away the step up basis…………….this would be a disaster since the baby boomers have their life savings in their home………….

    mb in oregon

  4. Ms. Conviviality

    I like how you looked for change in the couch cushions. I’ve been doing something similar but for another reason. My best friend’s daughter is having a quinceañera celebration on a 6-day cruise. The cost is more than what I spend on a weeklong vacation, surprisingly! So I’ve been looking for ways to “pay” for the trip so that the cost doesn’t sting so much.

    For instance, there’s tons of things I’ve been wanting to get rid of and have heard of successful sells using Facebook Marketplace from others but haven’t used it myself so this “pain” is pushing me to finally use the platform. Another example, while I wanted to believe that I created the best Airbnb listing I could have. This situation caused me to really think about what else can I do. In studying the positive comments that we’ve received so far from past guests, I updated the listing to include more pictures and information about the things that make the Airbnb special. I’ve also looked at my credit card rewards points to see if they could be used strategically.

  5. Hey Sam – I’ve invested a good 70% of my net worth in illiquid investments and a fair amount of private deals that do have capital calls…for your readers, they don’t call all the capital at once because of the cash drag if they can’t deploy quickly. When I first started I just kept the cash on the ready but as our net worth has grown and I’ve become more aggressive in keeping our cash balance lower – really since treasuries started to yield 3% and greater. I’ve set up a pledged asset line that is SOFR + 1.3%. The net spread between that rate and what I’m earning on the treasuries is currently less than 1%.

  6. Sam,

    Related question: Any advice or strategies on how to reassure a wife or partner who is uncomfortable with less than 6-12 months of living expenses in checking account? I think 3 months of living expenses on hand is fine if investments can be liquidated in case of emergency, but we have missed out on a lot of interest and investments by keeping too much in checking account..

  7. “However, after Treasury bond yields surpassed 5%, I decided to shovel my remaining cash into Treasuries. As a result, my checking account balance dropped to less than one month’s worth of living expenses.”

    Couldn’t you just sell some of your Treasuries to fund the capital call? Especially given the recent decline in interest rates should have boosted the value of your Treasury holdings.

    1. Good suggestion, especially given interest rates have declined and bond have rallied. The reasons why I didn’t are:

      1) I like to hold my Treasury bonds to maturity and not think about trading them. Holding to maturity provides peace of mind.

      2) The gains don’t look to have surpassed my HTM yield yet. They are almost all 1-year or earlier durations.

      3) It’s a challenge to hunt for cash. It’s also motivating to try and make extra income to meet the capital call.

      4) Selling something to invest in something is not preferred. I would rather always be adding to my investments.

  8. 1987….crash. My dad had margin call…..$250k…was a very ugly situation. In this day and age, not worth the attempt.

    1. Hmm, maybe I need to clarify what a capital call is versus a margin call.

      Capital call is simply the fund calling a percentage of your capital commitment. The capital calls are spread over 2-3 years.

      A margin call is when your brokerage asks you to deposit more funds to keep your margin relationship above a limit given the value of your stock has fallen.

      1. Dunningvfreaking kruger

        So question – private real estate crowd funding such as CrowdStreet discuss capital calls in the fine print.

        If I commit to a $50,000 investment I had assumed I assign $50,000 in cash. I assumed CrowdsStreet could, if required, hit me up for another $50,000 or risk dilution. So a total commitment potential of $100,000 on a commitment of $50,000.

        From this article it might be a sequence of $10,000 cash calls or $25,000 cash calls but it won’t Exceed to original commitment of $50,000?

        1. Unless the sponsor was facing significant problems with the deal and needs to recapitalize it with more equity funds, I doubt you will be asked to commit more capital than you agreed to commit. But the sponsor may give you a choice, but you certainly won’t be forced to commit more than you agreed to.

  9. I use margin against my stock portfolio with interactive brokers or a HELOC to smooth out these cash call requests or unexpected opportunities to invest as a LP. Interest is negligible if paid within 1-2 months.

  10. I don’t get it. You cover a litany of issues with private funds, including high expenses, need for regular monitoring, capital calls that require liquidity, dependence on managers who may or may be good, opaqueness of financials etc. You also limit your investment in this category to 10% of NW. So even if the manager is able to outperform the total stock market over a long period of time (not likely given expense disadvantage), it could improve your overall returns by 10 or 20 basis points. Not worth the stress and deals ng with the issues you describe. I think you do it just to have something to talk and write about plus you secretly enjoy the drama. Just my two cents. Admittedly I’ve never invested in these for the reasons above. Best wishes.

    1. Thank you for your thoughts. This post may be more interesting to you once you start investing in private funds.

      I try to share mistakes or misjudgments to get better and help others from going through the same mistakes.

      Finally, I try to pay attention to everything percentage of my net worth, especially if requires capital calls. 10% is still a decent amount of money for me.

      One of my funds invested in Rippling early, which could lead to a tripling of the fund with this position alone.

      1. Far enough. I suggest a post mortem in several years when you have enough data to credibly calculate a return on these. A simple calculation could be done assuming you invested all capital call money into VTI on the same day. Include any dividends, taxes etc. My money is on the total market ETF. Good luck!

        1. Sure, sounds good. So far, my private real estate investments have returned around 11% a year since 2016. Steady eddy until some really explosive returns in 2021 (+41%).

          You actually just encouraged me to look at my latest venture capital statement. Vintage year 2018. Says I invested $119,000 out of $140,000 so far, and the balance as of end Dec 31, 2022 is $364,241. Assuming the calculation is based off $140,000, that’s a net 27% IRR for four years. The IRR drops to 21% if the duration is five years. Not bad!

          Thank you for your interest in my investments.

          If you ever get into private investments, let me know if your perspective changes. Here are some other reasons why I invest in private funds. The social network is a nice positive.

          Have you also reached financial independence as well? It would be good to understand your background so I can understand where you are coming from.

          We’ve got people investing less than $100,000 to people investing well more than $10 million. So it’s hard to make assumptions.

          How are you investing your money? And what are your returns?

          1. Great results so far and will be interesting to see the results in paid out cash over a long term, especially covering a period like now with a lot of volatility. I admit Im not in these due to a desire for simplicity and because I don’t need to chase every basis point. I invest solely in broad index funds, individual bonds/CDs and real estate (funds and owned properties). My net worth would allow me to live comfortably withdrawing less than 1% after passive income. Still interested in learning more about these and open to being wrong. Im very skeptical when high fees and marketing are involved. Good luck.

            1. Thanks, I won’t really know the ultimate IRR until the end. I really do enjoy the networking aspect of investing in private funds though. I’ve met a lot of founders, entrepreneurs, and venture capitalists.

              The beauty of investing is that we all invest based on what we know and what we like. Everything is rational and people are free to invest how they wish.

              Being able to withdraw less than 1% to live comfortably means you are rich! Please enjoy your wealth as much as possible. I certainly plan to know that I am over the hump.

        2. A lot depends on your age, risk, and objectives. I’m 65 now and have invested some of our portfolio in PE funds because I wanted something that was not strongly correlated to the market but still generated high single-digit to mid-teen annual returns after fees and expenses. I view it somewhat as a good bond alternative but with better returns.

          Index funds have been the biggest portion of our portfolio as we were growing our portfolio but now I’m a little more focused on preservation and asset allocation that lowers some of our risk. I’m willing to give up a little upside for a little more diversification.

            1. I’m about to do that with my wife’s 401K which is currently in a stable value. We will do a T-Bond ladder using 3, 6, 9 and 12-month intervals. I’m doing this so that at each 3-month interval I can look what the market is doing and decide if we want to begin moving some back into equities since we do still consider this long-term money. She will be able to defer the RMDs until she is 75 which is still 13 years away.

    2. Hi Kevin, it makes sense you don’t get what you have never invested in.

      But there’s a reason the private fund industry is so large. There are returns out there that blow past public equities, if you can invest with the right funds.

      You seem to disapprove of how Sam is investing his money. Why?

      Managing capital calls is an important aspect of investing in private funds. This article was very insightful.

  11. I’m confused about all this as the way you’ve written this (here and elsewhere before), you imply that capital calls can come out of the blue sky w/no warning. Is this the case? Because not knowing even roughly when the calls would come would cause enough stress to wipe out the relief from not driving the bus.

    1. Hence, the points of managing cash flow and planning ahead. There is a general guidance for how long the fund will take to make all its investments. Its usually between 2-to-3 years.

      However, sometimes bear markets happen (2022) and private funds become more patient with new investments. Or sometimes, a bank run happens, and private investors need to navigate these new circumstances as well.

      How do you go about managing your cash flow to meet capital calls? Do you have a limit to the number of funds you invest in?

    2. You have to remember that these are long-term investments with a J-curve over a 7-10 year period. For example, you commit to investing 100K but you don’t invest it all at once because the investors, over time, are evaluating opportunities and looking for the best time to invest portions of your money. When they plan to invest, they call the capital they need and that is what you provide.

      These investments take time to begin to pay back with distributions hence why their value falls as the investments are being made and then rises sharply over time as those investments begin to become profitable. It is a challenge not knowing when the calls are coming and it is also a little messy dealing with K1 filings every year for tax purposes and in many of these investments, the documents don’t come until after April 15 so you have to estimate your taxes and then file an extension.

      They do take more time and management but add good diversity and without a lot of correlation to the equity markets which can be good when things are so volatile.

    1. Definitely one strategy. Although, I never feel good borrowing money to make an investment. Although, even with a higher margin interest rate, if you pay it back in 30 days, the interest expense isn’t that much.

  12. Nice job mate maxing out your earnings potential on all your cash and not letting it sit and pile up. I used to have the problem of being too lazy to put my cash into investments. I wasn’t spending it frivolously, but I was losing out on a lot of earnings potential by letting it sit too long.

    Glad you got all your capital calls sorted out and thanks for the detailed explanation of how all of that works. It’s totally new to me so I find it rather fascinating. Thanks for sharing.

  13. I don’t currently invest in any funds that have capital calls, so I haven’t run into that issue before. But I can totally see how it can be rather tricky to get capital calls rather out of the blue when you’re trying to earn as much as possible on the cash you “set aside” to put into the fund.

    With the Fed/CA tax deadlines extended, I’m planning on paying my taxes in October so that I can earn some interest on the cash over the next 6-7 months instead of letting the government earn on it (2022 PTE tax payment, 2022 Fed and CA taxes, 2023 Fed and CA estimated taxes, and 2023 PTE taxes). So I’ve really got to keep track of my cash flow, liquidity, and CD/Treasury maturity dates so I don’t goof things up in the end!

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