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Do you keep a % of cash or an absolute amount?

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Old 13-01-2020, 02:45 PM   #1
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Do you keep a % of cash or an absolute amount?

How much cash do you keep and what is your methodology?

E.g. do you keep X% of your overall portfolio in cash? Or do you keep an absolute amount which may be 1 year of your expenses and invest all the rest in stocks/bonds/ETFs etc?

And why?
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Old 13-01-2020, 03:15 PM   #2
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How much cash do you keep and what is your methodology?

E.g. do you keep X% of your overall portfolio in cash? Or do you keep an absolute amount which may be 1 year of your expenses and invest all the rest in stocks/bonds/ETFs etc?

And why?
My portfolio is 75-20-5, where the 5% is cash. There is a separate emergency fund of 6 months' expenses. As my portfolio grows - 2019 raging bull FTW - 5% starts to feel too much.

My car is 7 years old. In 3 years I may buy a replacement or give up owning a car. Maybe I will create a tentative new car fund by shifting some money from the current 5% portion.
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Old 13-01-2020, 03:43 PM   #3
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Cash is absolute 6mths of expenses(which currently stands at 10%). The rest all invested.

I follow the dca approach of time in the market, so don't have any warchest whatsoever.

Last edited by Thoreldan; 13-01-2020 at 03:50 PM..
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Old 13-01-2020, 05:12 PM   #4
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1.5 - 2y expenses + 50k in SSB.
% seems complicated.
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Old 13-01-2020, 06:00 PM   #5
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1 month cash buffer, 12 months worth of credit, zero debt.
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Old 13-01-2020, 06:07 PM   #6
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1.5 - 2y expenses + 50k in SSB.
% seems complicated.
I agree that expenses is a factor for the amount of cash holdings. My target is to keep 6 months expenses in emergency cash, 6 months in SSB or some sort of short-term FD ladder.

Regarding car fund, if I'm going to replace my car, I can 'borrow' from my 6 months emergency cash first and then 'rebuild' the depleted funds. No need separate fund.

But if i were going to buy something bigger like property, then yes, have to start building up cash balance first. Like I've mentioned before, thats what happened to me during the last GFC. I had a large cash position because I was going to buy my first property, then stock market crash... so I used the cash to buy stocks instead.
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Old 13-01-2020, 06:23 PM   #7
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1 month cash buffer, 12 months worth of credit, zero debt.
Out of curiosity, what would be the cost of that credit line (interest rate)?
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Old 13-01-2020, 07:05 PM   #8
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emergency fund and savings fund put 1 side
every month put x$ from salary as cash to invest
the rest go into savings fund
if take home 2k, put 500 to savings fund 1.5k to invest
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Old 13-01-2020, 07:16 PM   #9
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emergency fund and savings fund put 1 side
every month put x$ from salary as cash to invest
the rest go into savings fund
if take home 2k, put 500 to savings fund 1.5k to invest
And u consume air for your 3 meals ?
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Old 13-01-2020, 07:16 PM   #10
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Out of curiosity, what would be the cost of that credit line (interest rate)?
Probably something horrid like 25% p.a... I have never paid less than the full balance in almost 30 years now. I see it as a last resort in an unlikely emergency, better than nothing.

I guess I’m not too worried about preserving my existing lifestyle in the event that something dire happens. I am happy to make drastic adjustments if needed. Bring it on!
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Old 13-01-2020, 07:24 PM   #11
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Planning to use DBS multiplier's 25K as upper limit because I have no idea how to gauge "emergency" funds.
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Old 13-01-2020, 07:38 PM   #12
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I keep 6 months worth of expenses in cash.

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Old 13-01-2020, 08:05 PM   #13
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And u consume air for your 3 meals ?
how is $500 a month not enough for spending?
food $10 x 31 = $310
phone bill = $10
insurance = $5.17
transport = $70
still got $104.83 leftover to spend freely

intermittent fasting, dont eat breakfast
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Last edited by livingcharsiew; 13-01-2020 at 08:08 PM..
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Old 13-01-2020, 08:20 PM   #14
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looks like the budget of someone still living with parents possibly NSF, since no need to budget for clothes/shoes

if you own your own condo/HDB, you will know what the extra costs are
shoes and clothes buy once every 3 years
after 3 years the $104.83 rolls over to an extra $3773.88
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Old 13-01-2020, 08:22 PM   #15
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how is $500 a month not enough for spending?
food $10 x 31 = $310
phone bill = $10
insurance = $5.17
transport = $70
still got $104.83 leftover to spend freely

intermittent fasting, dont eat breakfast
looks like the budget of someone still living with parents , possibly NSF, since no need to budget for housing/clothes/shoes / electrical appliances

if you own your own condo/HDB, you will know what the extra costs are
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