How many months of cash in your portfolio do you keep?

When I was working/accumulating never more than 3-6 months.

Now I'm in "drawdown" (although the rising market has kept drawdown from happening), and after 8 years of up market, I've got about 100 (counting <5 yr CD maturity as cash).
 
I'm not retired yet and am not using a portfolio for income, but usually keep a running balance of about 6 months cash in bank accounts. However at this moment I'm sitting on about 30.
 
gcgang said:
When I was working/accumulating never more than 3-6 months.

Now I'm in "drawdown" (although the rising market has kept drawdown from happening), and after 8 years of up market, I've got about 100 (counting <5 yr CD maturity as cash).
Click to expand...

So a little over 8 years of cash.
 
Zero, if I need cash right now I have to sell some gold or silver. I have around $75 that I can withdrawal from my checking account without bouncing anything
 
Whatever is in my checking account. On average probably about 4 weeks of spending. Starts out the quarter high when I sweep my quarterly dividends to the bank. By the end of the quarter, I am sometimes down to selling off stocks or bonds to raise cash.
 
I am retired, and very cautious and conservative in financial matters because that is just how I am.

I keep 5.5% cash in a Vanguard money market account in my portfolio. If I assume that SS and pension will continue, and subtract that from my spending, then right now that 5.5% would cover 41 months.

(Bear in mind that we are enjoying a huge bull market at present, and if/when we have another severe recession, it would not cover nearly as many months.... for example, a recession as deep as what we saw on 3/9/2009 would mean it would cover 28 months, if I did not adjust my spending accordingly.)

Actually I have more than that, because this is not including my local bank account in the bricks-n-mortar bank down the street. I don't count my bank account as part of my portfolio. I withdrew my 2017 spending money back in January and that, plus a substantial buffer, is in the bank. If that is included too, then I have 60 months.

Most people do not need this much, IMO. I just like having a lot of cash around.
 
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W2R said:
I am retired, and very cautious and conservative in financial matters because that is just how I am.

I keep 5.5% cash in a Vanguard money market account in my portfolio. If I assume that SS and pension will continue, and subtract that from my spending, then right now that 5.5% would cover 41 months.

(Bear in mind that we are enjoying a huge bull market at present, and if/when we have another severe recession, it would not cover nearly as many months.)

Actually I have more than that, because this is not including my local bank account in the bricks-n-mortar bank down the street. I don't count my bank account as part of my portfolio. I withdrew my 2017 spending money back in January and that, plus a substantial buffer, is in the bank. If that is included too, then I have 60 months.

Most people do not need this much, IMO. I just like having a lot of cash around.
Click to expand...

Do you put your dividends into cash?
 
Not much. Typically, 1 or 2 months in bank checking & savings accounts. However, I can write checks on my Vanguard Short Term Investment Grade fund if necessary; that'd be years worth.
 
I get a monthly dividend in cash from a big bond fund so I don't actually keep much in cash beyond that - maybe one month just as a buffer to avoid monthly checking account fees plus $500 more. I also get a quarterly dividend in cash from a stock fund to supplement the rest of the cash coming in.


I don't like keeping any big amounts in cash because it earns zilch and any earnings are fully taxable. I do keep a first-tier emergency fund in an intermediate-term muni bond fund.
 
rec7 said:
Do you put your dividends into cash?
Click to expand...

Absolutely. Then I use the cash in rebalancing during the first week in January, after withdrawing that year's spending money. So, as of today I have 6.21% cash in Vanguard money market (and I guess that represents a few more months than I specified in my previous post). Next January after I withdraw my 2018 spending money and then rebalance, it will go back to 5.5%.
 
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rec7 said:
How do you cut it so close?
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I know what my monthly expense are and I keep just enough in checking to cover it. I usually don't run it that close but the last couple months have been challenging and I've had to sell some silver.
 
97guns said:
I know what my monthly expense are and I keep just enough in checking to cover it. I usually don't run it that close but the last couple months have been challenging and I've had to sell some silver.
Click to expand...

I am guessing you spend the dividends as they come in.
 
I have a GIC ladder, but as interest rates have been ridiculously low for the last couple of years, I have not renewed the last couple of GICs as they matured. So currently I have about 2 years (24 months) expenses in cash.
 
I see answers all over the place here. I guess it is best to keep as little cash as you safety can. Right now I have about 6 years if my dividends get cut in half in a bear market. I think that is a little bit to much. I might cut that in half.
 
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About 5 years worth.
I'd like to reduce it to 3-4 years worth, but am waiting for the next recession or collapse of market before doing that.
If it doesn't happen, I can always just feel super secure not worrying about it happening.
 
Meadbh said:
I have a GIC ladder, but as interest rates have been ridiculously low for the last couple of years, I have not renewed the last couple of GICs as they matured. So currently I have about 2 years (24 months) expenses in cash.
Click to expand...

I did count GIC's or CD's as the same a cash, as long as I could cash them out within a time frame that I would not have already run out of cash (about 1-2 years).
 
I keep about 2 months of cash between checking and savings... And each quarter I transfer money around to fund the quarter (some comes out of an inherited IRA - so I need to transfer it out as part of the RMD)... I transfer that to short term money fund - in my regular (vs tax deferred) brokerage... then monthly transfer that month's allotment. So at the beginning of the quarter I have 3 more months of cash. My husband also has a bunch of IRA CDs - about 3% of our portfolio... but I just let those roll... not part of our cash flow.

All of this is a good reminder... I went and looked at my current AA in quicken... and I definitely need to rebalance.
 
We run pretty lean in terms of cash...I would put it at about 3 months worth of expenses. We do have a HELOC that is available in the event we need a large amount of cash in a short time period. We opened the HELOC in 2013 and haven't drawn on it yet.
 
rec7 said:
I am guessing you spend the dividends as they come in.
Click to expand...


Yep, my savings is gold and silver but I haven't "saved" anything is 6 months or so, just finishing up a large project that should allow me to save again


Blue Collar Guy said:
Hahahah, thats the direct opposite of the poster above,.
Click to expand...

I used to keep a good years worth of emergency fund when I was working but never had to dip into it so it all went to gold
 
I am retired, so I keep 0 months of cash in our portfolio. Our checking account is different. I keep about one week's worth of expenses in our checking account.

I pay everything with a credit card. If I need to pay a credit card bill, then I sell something in the portfolio and have the proceeds show up in my checking account and use online billpay to pay the credit card.

As for "cash flow", I get dividends from time to time and use them to pay bills or if not needed to pay bills, I invest the money within minutes or hours from when it shows up in my portfolio.

This is somewhat like living paycheck-to-paycheck except it is paycheck-on-demand. Credit cards provide all the buffer I need.

We were once locked out of our checking account for 3 weeks, so any cash in there was unavailable. While it was irritating, it showed me that we could readily survive.
 
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