Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Anyone in All Cash?
Old 02-12-2010, 02:12 PM   #1
Recycles dryer sheets
 
Join Date: Feb 2007
Posts: 71
Anyone in All Cash?

I have been exploring the possibility of going all cash, even though I am years away from early retirement. Are any of you retirees all cash right now? How about those of you with years to go, like me? I would be very interested in reading about the assest allocation of all cash positions. I know that CD ladders are common as well as various bond fund allocations. Thanks in advance.
__________________

__________________
emi guy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-12-2010, 02:50 PM   #2
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Retired? Yes.

All cash? No (never have been - probably never will).

Sorry, nothing to offer ...
__________________

__________________
rescueme is offline   Reply With Quote
Old 02-12-2010, 03:21 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Quote:
Originally Posted by CATAMAN View Post
I have been exploring the possibility of going all cash, even though I am years away from early retirement. Are any of you retirees all cash right now? How about those of you with years to go, like me? I would be very interested in reading about the assest allocation of all cash positions. I know that CD ladders are common as well as various bond fund allocations. Thanks in advance.
Don't consider myself retired yet, but we have about 40% of our assets in CDs, savings accounts, loans, and gold. The rest is in rental real estate with the exception of a wee percentage in stocks. We were lucky enough to get in on the PenFed CDs back when they were paying 6.25%; went for a three year term. Have recently rolled those over to PenFed 5 year CDs at 4% with the thought being that they will pay better than 2 year certs even if we bail out at the two year mark. Have more than the CD value sitting in CapOne accounts earning a massive 1.4%. The dab of gold is up and down. Remainder is in private loans that juice up the overall percentage to about 4.25%. Hoping that an unsecured loan we made doesn't go totally bad - it's not performing to par right now.... If it goes bad we will be closer to 2% return overall on the cash. Sure there are sharper tacks out there in the cash wheely dealy world than this pilgrim.

I continue to appreciate rent paying tenants.
__________________
calmloki is offline   Reply With Quote
Old 02-12-2010, 03:30 PM   #4
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,890
I am retired, and have 11% cash which I think is way too much. My bond funds give me nice income. My cash gives me nothing and is so vulnerable to inflation.

So, I am thinking about putting 1/4 to 1/2 of it in bond funds, even though a rise in interest rates will push down bond fund share prices. I would still get the dividends. Just don't know when to pull the trigger on that - - my inner market timer is screaming "Nooooooooooo!!!"
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 02-12-2010, 03:40 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
easysurfer's Avatar
 
Join Date: Jun 2008
Posts: 7,888
I won't be going all cash until I reach 100 years old

I suppose, if you were totally risk adverse and have such a large portfolio that you can afford to sit on a huge pile of cash and not have to worry about the effects of inflation, then go for it.

But to try to outguess if now is a time to be call cash (or all stocks or all bonds) is pretty much just rolling the dice with real money.

As for myself, I keep some cash back in a money market fund. I treat this outside of my asset allocation. This fund serves as my emergency reserve and my own simulated paycheck that I auto withdraw from this and put in my checking account each month. For example, at the start of the year, when I rebalanced, I sold some equities at a gain and used that to replenish my money market fund.
__________________
easysurfer is offline   Reply With Quote
Old 02-12-2010, 03:50 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
Um...I'm confused.
Are bond mutual funds being considered to be equivalent to "cash assets" in this thread?
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 02-12-2010, 03:50 PM   #7
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,890
Quote:
Originally Posted by easysurfer View Post
I won't be going all cash until I reach 100 years old

I suppose, if you were totally risk adverse and have such a large portfolio that you can afford to sit on a huge pile of cash and not have to worry about the effects of inflation, then go for it.

But to try to outguess if now is a time to be call cash (or all stocks or all bonds) is pretty much just rolling the dice with real money.
I don't like the idea of putting ALL of one's nestegg in any one thing. We had someone recently who wanted to put all in junk bonds. We have had others who wanted to put all in gold. Now here's the idea of putting all in cash.

Like bonds, stocks, commodities, and other investments, cash has its own risks. Inflation comes to mind, as just one example.

Diversification is a fundamental principle of sound investing, and it is so for a reason. If someone does not agree with this, I would urge them to read Bernstein's "Four Pillars of Investing". Read it twice, or even three times. Although it is frightfully boring, I did that and I think it is good for us, whether we like it or not. It imparts a good deal of common sense.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 02-12-2010, 03:51 PM   #8
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,890
Quote:
Originally Posted by freebird5825 View Post
Um...I'm confused.
Are bond mutual funds being considered to be equivalent to "cash assets" in this thread?
I didn't think they were? I mentioned them after saying that I had too much cash and wanted to spend it on bond mutual funds. Would anyone consider bond mutual funds as being the same as cash? I sure wouldn't. I couldn't take a bond fund certificate to the corner market and buy a pack of tic-tacs paying with it, which to me means it doesn't pass the liquidity criterion. Maybe I'm off on a tangent or something.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 02-12-2010, 03:56 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
Quote:
Originally Posted by W2R View Post
I didn't think they were? I mentioned them after saying that I had too much cash and wanted to spend it on bond mutual funds. Would anyone consider bond mutual funds as being the same as cash? I sure wouldn't. I couldn't take a bond fund certificate to the corner market and buy a pack of tic-tacs paying with it, which to me means it doesn't pass the liquidity criterion. Maybe I'm off on a tangent or something.
I get confused easily...
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 02-12-2010, 03:59 PM   #10
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,890
Quote:
Originally Posted by freebird5825 View Post
I get confused easily...
Join the crowd.... I am still trying to figure out that debate on what is real retirement and what isn't!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 02-12-2010, 04:00 PM   #11
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by W2R View Post
Would anyone consider bond mutual funds as being the same as cash? I sure wouldn't.
Neither would I (or my DW).

Our cash is included in our overall AA/portfolio for measurement purposes, but they are not considered in the same context as bonds. However, they are closer to bonds (IMHO) in their actions than to direct stock and equity funds would be.

Most discussions revolve around a target AA (such as our 60/40) representing equity "types" and bond/cash "types". Once in awhile, you will see something like a 40/40/20 (equity/bond/cash), but that's not very common use, as I see it....
__________________
rescueme is offline   Reply With Quote
Old 02-12-2010, 04:06 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Purron's Avatar
 
Join Date: Nov 2007
Posts: 5,584
Quote:
Originally Posted by W2R View Post
Join the crowd.... I am still trying to figure out that debate on what is real retirement and what isn't!
Yup. We love to debate fine points. BTW, I can't use the G-fund portion of my TSP to buy tic-tacs but I still consider it cash
__________________
I purr therefore I am.
Purron is offline   Reply With Quote
Old 02-12-2010, 04:11 PM   #13
Thinks s/he gets paid by the post
DangerMouse's Avatar
 
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,812
We are probably close to 50% cash, tend not to bother with bonds much at all. We are able to get 7% on our cash we hold in the bank in Australia.
__________________

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
DangerMouse is offline   Reply With Quote
Old 02-12-2010, 04:16 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Quote:
Originally Posted by DangerMouse View Post
We are probably close to 50% cash, tend not to bother with bonds much at all. We are able to get 7% on our cash we hold in the bank in Australia.
Is this an Australian dollar account, or USD? Even if it is AD, it leaves plenty of room for any possible currency loss, which is jsut as likely to be a gain anyway.

Sounds very good!

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 02-12-2010, 04:38 PM   #15
Full time employment: Posting here.
 
Join Date: May 2008
Posts: 589
Completely 100% cash/cash equivalents is actually pretty risky for someone who is retired. And it is uncompensated risk on top of that.
__________________
plex is offline   Reply With Quote
Old 02-12-2010, 04:42 PM   #16
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
I am years away from retirement. I've always had a much more conservative AA than what financial advisor typically recommend for people my age (35). Currently, my AA is roughly 49/38/13 stocks/bonds/cash. The cash is part USD, part Euros. I rarely hold cash at all (I had less than 1% in cash last year), but I have been building up my cash position since last summer in case I get another opportunity to buy more assets on the cheap. Right now, there is just too much uncertainty for me to feel comfortable plowing 100% of my money into any one asset class.
__________________
FIREd is offline   Reply With Quote
Old 02-12-2010, 04:48 PM   #17
Recycles dryer sheets
JustNtime's Avatar
 
Join Date: Oct 2009
Posts: 150
I put MOM's entire IRA into 7yr Penfed CDs at 6.25% in 2007.< Mainly to get her away from the sleasy Valic guy who kept trying to sell an 80+ yr old woman high cost annuities.> She's good to go until 2014. Unless rates go above that before then. She's allowed to rollover into a better CD, if the rates get higher. A very good deal. Easy for her to understand and no stress from market swings.

Personally, I opted for more diverse investments. Alot to be said for simple though. I guess I'll see in 2014, if I can beat her return. <IF the world doesn't end in 2012, of course.>
__________________
JustNtime is offline   Reply With Quote
Old 02-12-2010, 04:54 PM   #18
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
I think there are/were some people on here who had CD ladders to go with their pensions and SS as their retirement financial strategy, so that would be all cash imho. I don't consider bonds to be cash.

We were in all cash for several months after rolling over the 401k into an IRA, but now have allocated it into equity and bond funds (and maybe 30 percent cash, which includes several years of living expenses).
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 02-12-2010, 07:03 PM   #19
Thinks s/he gets paid by the post
DangerMouse's Avatar
 
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,812
Quote:
Originally Posted by haha View Post
Is this an Australian dollar account, or USD? Even if it is AD, it leaves plenty of room for any possible currency loss, which is jsut as likely to be a gain anyway.

Sounds very good!

Ha
It's Australian $'s. We don't really try and play the exchange rate game, because I am sure if we tried we would lose. For us, we have hedged our bets by keeping some $s in Oz which is our home currency, some in Pounds Sterling to cover us if we move to Europe (should have gone to Euros but that horse has bolted), then we have small $s in US. This strategy only works for us because we are undecided where we will eventually end up.
__________________

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
DangerMouse is offline   Reply With Quote
Old 02-12-2010, 07:13 PM   #20
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,105
We are retired (just) and allocation is 35% equities, 53% bonds, 12% cash.

Expect to be using lots of cash over next few years with lots of major travel plans lined up. I would think the cash will slide to 10% and bonds up to 55% over the next few years.

Note that I have a non-COLA pension that should cover most of the basic needs.
__________________

__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How many years of cash/cash equilivents do you have now Florida FIRE and Money 70 03-10-2009 04:32 PM
Would you keep cash or... F-One FIRE and Money 16 02-24-2009 05:53 AM
How much in cash? FinallyRetired FIRE and Money 27 09-12-2007 10:34 AM
cash on cash rate - what should it be DollahBillYall Young Dreamers 20 06-15-2007 07:14 AM
Should I have more cash? LRAO FIRE and Money 6 02-17-2005 03:54 PM

 

 
All times are GMT -6. The time now is 06:38 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.