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People Fear They’ve Got Too Much Subprime Cash in Their Bank Accounts

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There's a lot more to unpack in this article than I expected.


1) I feel they glossed over the emergency fund and importance of having those funds be liquid and not invested in anything potentially volatile


2) That's a bold statement about confidence in the market...purely based on it not tanking anymore since a handful of months ago??


3) re: the 35 year old...do we really think "most of his money" is parked in a HYSA? Get out of here.  Most of your liquidity versus most of your money are not the same thing and I feel that this might suggest the lack of importance of discussion point 1


4) That 18 year old is gonna have a fun time. But good to be investing/saving early.



For the sake of further fun CB discussion...


For a household where both jobs have survived the current state of things, we are bumping the emergency fund to closer to a year of expenses.  Being fortunate enough to do so is not lost on me, but at the same time it does seem like a lot of insurance payment (i.e. inflation hit while in a HYSA versus potential investment gains) for the sake of of comfort/lack of worrying about one of us (or holy hell, both) being laid off.  I haven't quite figured out what the balance should be and am interested to know what others on here are doing (I've actually been meaning to start a post over on the money management forum). 

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Strictly speaking...one does not have cash in an account.  Cash being hoarded would be the stack of currency at the house.  Deposits, on the other hand...another story.  


There aren't many options that will pay well for deposit accounts.  Even CD's are screwed.  Mom just got her roll-over notice to make a decision within the next few weeks.  The bank wants to offer a whopping .60% for six months.  Conversely, she is reluctant to have more in the markets right now simply because of the instability...I've tried to persuade her to take some of the XOM and put it on the market as call contracts that are not apt to hit.  But even if they did, she could afford to lose the shares set aside for contracts AND would certainly have locked up some funds at the same time. 


I've scaled back on the literal cash on hand since we had no WSOP this year (the online thing is NOT the WSOP to me).  However, even with the return of poker, I still wasn't traveling to LAS with as much cash as normal.  Lack of sports to bet had something to do with that, but even that is changing albeit not enough to keep more than $10K on hand. 

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I continue to be lean on cash reserves. Then, I've got nearly $7,000 in an investment account invested in an index fund.


Paying off the rest of my student loans has been a priority (especially since I've been lucky enough to have not lost my job through all of this mess). It's a guaranteed return on my cash given the looming expiration of the 0% interest period.


Hoarding cash doesn't do me any good at this point, but everyone's situation is different.

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For myself, I am focusing on hoarding the cash and building up savings. I want to target to have one year of expenses in a savings before i think about moving back into investments. I am of course not sold that wall street is the best and only form of investments to have. I mean yea i got some invested still, but I also have Crypto and nice solid silver and good bullion for diversity. Actually metals have been performing very nicely with all of this going on. 


I personally do not have huge confidence in the stock market, because I do predict a second Covid-19 reoccurance and i think it will completely devastate the economy more than it did the last time. Things have been semi-stable as the Govt keeps printing more cash and pumping it out, but that is a gravy train that cannot end well. While other countries have slowed/stopped, we are only hurting the value of the $ and sinking further beyond on currency valuation. We also just ended the $600 stimulus for unemployment, and I suspect tit will take probably 3-4 months to see how that is going to unfold. What i mean by that is for spending to slow, defaults to raise and subsequently the stock market to reverse. 



As Munsy said, we are all in different spots so have to evaluate our own perspective risks. I also and working towards a house purchase next, so sticking it all in wall street and seeing it all keel over and die when the stock falls would surely put a damper on my down payment. I am at-least diversifying to take advantage of the most APY i can for the cash while i stock up my reserves and down payment funds. 

Edited by EvilMan
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I have been keeping more cash then usual because I'm thinking about buying a new car. My work vehicle is a 2013 Honda CRV but it only has 80,000 miles on it and has had no problems. 

I'm not convinced that the market won't take another big dump so I've moved most of my investments to 75% cash, 25% stock index funds. 

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