Join Early Retirement Today
Reply
 
Thread Tools Display Modes
How much CASH or liquid do you have?
Old 10-04-2012, 07:07 AM   #1
Full time employment: Posting here.
 
Join Date: Oct 2005
Posts: 501
How much CASH or liquid do you have?

Forget about NETWORTH. It is so misleading and sometime useless information for someone current situation.

If I have mortgage to pay and bills pilling up NOW then $0.5 million dollar of networh that sitiing in my house, my cars, my 401k, my IRA doesn't really help.

People that has $5000/mon. from retirement and has zero networth is better of than people that has $300k networth but zero cash. :-)

enuff
Enuff2Eat 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 10-04-2012, 07:09 AM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,003
Quote:
Originally Posted by Enuff2Eat View Post
Forget about NETWORTH.
OK, forgotten.

Anything else on your mind this morning?

PS - In response to how much liquid I have, my well has a 2,500 gallon water storage tank...
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 10-04-2012, 07:27 AM   #3
Administrator
Alan's Avatar
 
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,050
I have enuff2CmeOK for many years.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
Alan is offline   Reply With Quote
Old 10-04-2012, 07:32 AM   #4
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,657
I used to keep 6 months liquid in a money market account (the so-called emergency fund). But in 20 years, including various downturns, job losses, house repairs and other unexpected needs for short term funds, I never touched it. I could always find some way to pay for what I needed or sell an investment if necessary. So, with rates as low as they are, I've just swept the "emergency fund" into the rest of my asset allocation now. I have a month worth of expenses on hand (earning almost nothing) because I couldn't talk myself into going without an "emergency fund" entirely.
growing_older is offline   Reply With Quote
Old 10-04-2012, 07:39 AM   #5
Administrator
Alan's Avatar
 
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,050
Quote:
Originally Posted by Enuff2Eat View Post
If I have mortgage to pay and bills pilling up NOW then $0.5 million dollar of networh that sitiing in my house, my cars, my 401k, my IRA doesn't really help.
enuff
Quote:
Originally Posted by growing_older View Post
I used to keep 6 months liquid in a money market account (the so-called emergency fund). But in 20 years, including various downturns, job losses, house repairs and other unexpected needs for short term funds, I never touched it. I could always find some way to pay for what I needed or sell an investment if necessary. So, with rates as low as they are, I've just swept the "emergency fund" into the rest of my asset allocation now. I have a month worth of expenses on hand (earning almost nothing) because I couldn't talk myself into going without an "emergency fund" entirely.
I don't think he is just talking about an emergency fund. If you had a situation as described in the OP I'm sure all your money is not locked up in property and IRA's that is difficult to realize.

For the scenario he describes I would count mutual funds and ETF's etc that could be liquidated in a matter of days as liquid assets.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
Alan is offline   Reply With Quote
Old 10-04-2012, 07:41 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
750ml...

Everything I have is liquid, in the sense that I'm old enough to draw from my 401k if necessary. But, cash wise, I have about a years' worth of expenses.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 10-04-2012, 07:52 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 6,681
I have various tiers, or layers, of investments in my portolio. They also reflect different levels of liquidity or ease and speed of gaining direct access to them.

I keep a small cushion or surplus in my local bank's (non-interest bearing) checking account. This cushion is over the minimum balance needed to avoid monthly fees. If something arises in a given month in which I need some quick cash or to cover some small, unforeseen expense (anything under a few hundred dollars), I am just fine. This cushion also covers me in case my monthly big bond fund dividend (see my signature line) is a little lower than usual.

My next layer is a larger balance in an intermediate-term muni bond fund. While its principal can go up or down a bit, it still gives me about 3-3.5% tax-free return. I have checkwriting privileges on this account so I can use it to cover larger, unforeseen expenses or simply use a check or electronic transfer to bring funds into my local bank's checking account. I can tolerate the downside risk of this type of account (i.e. loss of principal) in return for a decent, tax-free dividend every month. This is the closest thing to my "emergency fund" which I have had even back in my working days.

My next layer consists of a stock mutual fund which I leave alone unless I really, really need to tap into it for a much larger expense (such as when I bought a new car 5 years ago). No checkwriting on this fund but I have electronic transfers available so the money is in my local bank's checking account in a few days which is fine.

After that is my TIRA which I do not expect to tap into until I am at least 59.5 years old, 10 years from now.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 10-04-2012, 08:42 AM   #8
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
Enuff2eat, right now I have about 6 years' living expenses in cash, assuming that I would continue to spend as much as I am spending now.

And then, I have bond funds which some regard as the same as cash. Basically, I am not worried. I could liquidate enough to live for the rest of my life, if I was willing to sell my funds and take a tax hit.

I agree with what you are saying about net worth. My paid off house lowers my living expenses but does not add to my income.

I am 64 so access to my retirement accounts is no longer an issue for me.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is offline   Reply With Quote
Old 10-04-2012, 08:42 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2003
Posts: 18,085
Quote:
Originally Posted by Enuff2Eat View Post
Forget about NETWORTH. It is so misleading and sometime useless information for someone current situation.

If I have mortgage to pay and bills pilling up NOW then $0.5 million dollar of networh that sitiing in my house, my cars, my 401k, my IRA doesn't really help.

People that has $5000/mon. from retirement and has zero networth is better of than people that has $300k networth but zero cash. :-)

enuff
Isn't it a little early to be hitting the sauce?
__________________
"All animals are equal, but some animals are more equal than others."

- George Orwell

Ezekiel 23:20
brewer12345 is offline   Reply With Quote
Old 10-04-2012, 08:53 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
I consider all my mutual funds and ETFs as LIQUID because I can sell and get cash in day or so. That means stocks, bonds, and other traded sequrities are LIQUID.

Yes, homes and perhaps if any folks have annuities with early redemption penalties, then I do not consider them LIQUID.
LOL! is offline   Reply With Quote
Old 10-04-2012, 09:20 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 2,983
Cash - enough for roughly 5 years , total liquid investments that I could sell on any given day- probably/maybe more than I'll need.
Not to brag but on top of that I have 11 cans of Miller Lite in the fridge.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
foxfirev5 is offline   Reply With Quote
Old 10-04-2012, 09:22 AM   #12
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,872
I would also define liquid as my taxable account balance. So I have roughly 7 years of expenses in there.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 10-04-2012, 09:26 AM   #13
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,657
Quote:
I don't think he is just talking about an emergency fund. If you had a situation as described in the OP I'm sure all your money is not locked up in property and IRA's that is difficult to realize.
So, that would make about 1 month in cash. About 4 years in taxable investments that can be sold without penalty and accessed in a matter of days. Almost enough to last the rest of my life in IRAs that would require 72t paperwork or penalty to access. Plus a house I could sell (not too liquid) if I had to, but that would take more than just a few days probably.
growing_older is offline   Reply With Quote
Old 10-04-2012, 09:28 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Nemo2's Avatar
 
Join Date: May 2011
Posts: 8,368
Bonds & Cash Equivalents, (not including equities), about 20 years*, based on our current rate of expenditure.


*I should live so long.
__________________
"Exit, pursued by a bear."

The Winter's Tale, William Shakespeare
Nemo2 is offline   Reply With Quote
Old 10-04-2012, 09:54 AM   #15
Moderator Emeritus
 
Join Date: May 2007
Posts: 12,894
Liquid, as in anything I can sell today without penalty and have the money available in my checking account within 3 business days: 20 years worth of living expenses.
FIREd is offline   Reply With Quote
Old 10-04-2012, 10:39 AM   #16
Full time employment: Posting here.
 
Join Date: Apr 2006
Posts: 944
I've got about 1 year in cash at this point. Then several years in bond funds, lifestyle fund, Wellesley, and then index funds for the long term "no touchy" money.
I will be harvesting more cash soon - I like to have at least one years worth of cash on hand (2 even) - it takes the sting out of downward trends. It's worth the loss of some potential income to sleep well and not worry for me personally.
__________________
Freed at 49. You only live once - live it
Donzo is offline   Reply With Quote
Old 10-04-2012, 11:04 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Using the 3.5%WR (that I am currently spending), what I have is the following, measured in years of living expenses. Note that we have no pension.

Cash (bank accounts/money market/I-bonds): 3 years
After-tax brokerage accounts (mostly equities): 6 years
Before-tax accounts (mostly equities, some bonds): 20 years

So, even if I get no dividend nor interest incomes, I have more than enough to live on until I get to 59-1/2, when I will be able to tap my before-tax accounts. And then later, of course I will get my grubby hand on the SS.

If push comes to shove, I will sell my houses for whatever they will fetch, which will get me many more years, then move into my RV. Of course before it gets to that, I would be reducing my expenses below where they are now, like to sell one house, cut travels, go back to work, or all of the above.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 10-04-2012, 11:22 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
OK, so let's talk about the other liquid, H2O.

So, I do not have a well with 2,500 gal tank, and only about 40 gal of fresh water. Oh wait, darn it, I already drain the tank of my motorhome. So, only a few gallons of drinking water.

Can I count my 25,000-gal pool in the back? It's loaded with chlorine and a bit salty, but still, if in a bind one cannot be choosy, right?

And then, and then, do I get to count my 50 wine bottles? OK, OK, most are under $10/each, but they quench my thirst fine.

And the stronger stuff that is 80-proof? And how about the beers my loving wife stacks for me in the utility room?

Man, I feel pretty smug.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 10-04-2012, 11:28 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Nemo2's Avatar
 
Join Date: May 2011
Posts: 8,368
Quote:
Originally Posted by NW-Bound View Post
OK, so let's talk about the other liquid, H2O.

So, I do not have a well with 2,500 gal tank, and only about 40 gal of fresh water. Oh wait, darn it, I already drain the tank of my motorhome. So, only a few gallons of drinking water.

Can I count my 25,000-gal pool in the back? It's loaded with chlorine and a bit salty, but still, if in a bind one cannot be choosy, right?
We live not too far from Lake Ontario.
__________________
"Exit, pursued by a bear."

The Winter's Tale, William Shakespeare
Nemo2 is offline   Reply With Quote
Old 10-04-2012, 11:32 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Oh man! I know I can count on people here for one-upmanship.

But, but, I thought the Great Lakes had pollution problems, no? Not like it's sour grape or anything, but I did read that somewhere. My chlorine-laden water seems so much safer.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Reply


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


» Quick Links

 
All times are GMT -6. The time now is 05:45 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.