Of your net worth in this current market (I'm defining as your total checking, savings, RIRAs, TIRAs, taxable brokerage accounts, 401(k)s, Pension plans, etc. minus your liabilities).. what % of that total do you keep in liquid accounts and why?

Particularly interested in hearing from the 30-40 year age range.

I'm probably on the higher end as I'm holding emergency funding and a downpayment for a home in a liquid savings account. After a recently cash bonus, My liquid cash is 37% of my net worth based on the definition above after accounting for my investment declines so far in 2022.

I'm likely going to invest in the market in the short term to move my liquidity down to 27% of my net worth.

What strategies do you use to balance your share of liquid cash?

I guess what I'm looking for is what a healthy ratio is.
Completely dependent on everyone's unique situation, for sure, but I would hope there is a best practice by age group

To echo HouAggie, I don't think this is really a ratio question.

If you're talking liquidity for an emergency fund - most will tell you to keep 3-6 months expenses socked away during your working career.

If you're talking from an investment standpoint - it really depends on your plan, risk tolerance, and what opportunities you're on the lookout for, etc. I think generally, most would tell you to keep your (non-emergency fund) wealth invested so that it keeps making money, unless you are concerned about the ability of your investments to make money and are looking for an entry point or another opportunity.

10k max in bank. Everything else in market account somewhere. My net worth is negative, or maybe zero, since i have 240ish mortgage left.

I'm kinda bad with cash. Pretty much live month to month. If I have it, it gets spent. My wife hates it. Luckily for her, I'm good with hard assets. Real estate, metals, valuable antiques, etc. Get in a pinch and we either live poor til payday or something can usually be sold pretty easily.

I consider my taxable brokerage investments liquid. They can be sold and the cash transferred anytime. I keep nearly 100% invested most of the time, though right now I have $3400 sitting in cash. This does not including my main checking account that my paychecks go to, which is always up and down as bills get paid or I get paid, but I keep the balance above $800.

I was assuming the other $400k in net worth was tied up in a house…

From relying on my past underwriting experiences for commercial lending - I prefer to have it be 1x/10%

So if I'm going for a commercial loan, I want to have the total net worth equal to at least 1x the loan amount.

For liquidity I want to have 10% of the loan amount.

I'll let you leave it up to yourselves as what's for liquidity defined as but definitely want at least 6 months of emergency fund.

Mid 30's, I have around a $875k net worth, and $56k cash in a high yield savings account. Everything else is in the stock market.

bmks270 said:

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I consider my taxable brokerage investments liquid. They can be sold and the cash transferred anytime. I keep nearly 100% invested most of the time, though right now I have $3400 sitting in cash. This does not including my main checking account that my paychecks go to, which is always up and down as bills get paid or I get paid, but I keep the balance above $800.

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This. You can sell a stock anytime, if you have a margin account you can get cash immediately and reimburse yourself in 3 days. If single stocks make you nervous learn to use sell stops. A sizable cash brokerage account, fully invested, is liquid IMO.

Using OP's definition, I have about a year's worth of cash on hand. I'm not factoring our taxable brokerage account in this equation.

It used to be closer to six months of cash, but I moved it to a year when I left corporate.

Too much

But I'm also a conservative *****

I fluctuate between 0.8 to 1.3 % cash. Basically just enough to cover bills for 2 months.

Ghost of Bizbee said:

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Dill-Ag13 said:

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30 y/o

$800k net worth

$27k cash/liquid inclusive of emergency fund
$50k in a taxable brokerage
$340k in retirement

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You are doing great! Have to be in the top 5% of retirement savings for your age. Well done

Assuming you rent or do you own a home?
If no, are you saving for a down payment in your brokerage?

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About $340k in a house which we own free and clear, the balance is our cars. The brokerage is for a larger home at some point but no firm timeline currently.

33 y/o + 36 y/o household with 2 kids.

Around 42k in cash with ~1m invested (not including home); of which about 140k is easily accessible if needed (no barrier of exit like a retirement account, education fund, custodial account, i-bonds, etc).

Ghost of Bizbee said:

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Of your net worth in this current market (I'm defining as your total checking, savings, RIRAs, TIRAs, taxable brokerage accounts, 401(k)s, Pension plans, etc. minus your liabilities).. what % of that total do you keep in liquid accounts and why?

Particularly interested in hearing from the 30-40 year age range.

I'm probably on the higher end as I'm holding emergency funding and a downpayment for a home in a liquid savings account. After a recently cash bonus, My liquid cash is 37% of my net worth based on the definition above after accounting for my investment declines so far in 2022.

I'm likely going to invest in the market in the short term to move my liquidity down to 27% of my net worth.

What strategies do you use to balance your share of liquid cash?

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did you subtract the 9% inflation rate from your 37% of cash?

37 YO

3.6M Net worth

2.2M in home/land (8.5 ac). We have 64% equity in that. The rest is in a mortgage at 3.15% that I don't intent to pay off early.

1.1M in the markets. About 65K of this in taxable brokerage, which I consider my deep cash.

300K in Multi Family RE

$15K in cash in plain ol savings.

I can't imagine too many scenarios where I wouldn't have time to remove funds from the brokerage accounts to take care of an emergency. I simply don't see any reason to have a huge cash reserve. Maybe my feelings will change as I age (if I age, God willing).

If there were some major national or world wide catastrophic event, the items in the gun safe, and possibly the BTC in the wallet would be more useful than money in the bank, IMO

LMCane said:

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Ghost of Bizbee said:

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Of your net worth in this current market (I'm defining as your total checking, savings, RIRAs, TIRAs, taxable brokerage accounts, 401(k)s, Pension plans, etc. minus your liabilities).. what % of that total do you keep in liquid accounts and why?

Particularly interested in hearing from the 30-40 year age range.

I'm probably on the higher end as I'm holding emergency funding and a downpayment for a home in a liquid savings account. After a recently cash bonus, My liquid cash is 37% of my net worth based on the definition above after accounting for my investment declines so far in 2022.

I'm likely going to invest in the market in the short term to move my liquidity down to 27% of my net worth.

What strategies do you use to balance your share of liquid cash?

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did you subtract the 9% inflation rate from your 37% of cash?

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or the ability to buy the market for 20% less than what it was worth?

one MEEN Ag said:

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I'm in the oil and gas industry so my net worth is measured in the number of Ford Raptors I currently own.

-1.

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Don't you mean tremor f250s?

I try to keep 20% liquid for various investment opportunities

TikkaShooter said:

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3.6M Net worth

2.2M in home/land (8.5 ac). We have 64% equity in that. The rest is in a mortgage at 3.15% that I don't intent to pay off early.

1.1M in the markets. About 65K of this in taxable brokerage, which I consider my deep cash.

300K in Multi Family RE

$15K in cash in plain ol savings.

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Unless you omitted 700k somewhere i think you are mistaken as to the meaning of "net"

Charismatic Megafauna said:

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TikkaShooter said:

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3.6M Net worth

2.2M in home/land (8.5 ac). We have 64% equity in that. The rest is in a mortgage at 3.15% that I don't intent to pay off early.

1.1M in the markets. About 65K of this in taxable brokerage, which I consider my deep cash.

300K in Multi Family RE

$15K in cash in plain ol savings.

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Unless you omitted 700k somewhere i think you are mistaken as to the meaning of "net"

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2.2 could be the equity position on 3.44 of home/land assets. Would be 50% levered, which passes a sanity check. Or maybe they forgot $700k. I'm guessing the former.

Could be! Of course at age 36 the difference between 2.9 and 3.6M in this environment could be a good vs a bad week in the markets!

I'm 43, we probably have 10% of our nw in cash. Uninvested, sitting in a savings account (even though it's above fdic limits) cash. Maybe dumb but the interest and/or risk weighted opportunity cost (i forget the correct term for this) for us doesn't outweigh the security of knowing we could buy another house, move, take a year off, etc tomorrow without having to adjust our lifestyle

CS78 said:

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one MEEN Ag said:

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I'm in the oil and gas industry so my net worth is measured in the number of Ford Raptors I currently own.

-1.

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Don't you mean tremor f250s?

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I like everything about the tremor except the name. If we're going with hunting mythical sand worms I would have preferred to see it called the F-250 Atreides package.

one MEEN Ag said:

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CS78 said:

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one MEEN Ag said:

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I'm in the oil and gas industry so my net worth is measured in the number of Ford Raptors I currently own.

-1.

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Don't you mean tremor f250s?

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I like everything about the tremor except the name. If we're going with hunting mythical sand worms I would have preferred to see it called the F-250 Atreides package.

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Desert power

one MEEN Ag said:

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CS78 said:

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one MEEN Ag said:

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I'm in the oil and gas industry so my net worth is measured in the number of Ford Raptors I currently own.

-1.

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Don't you mean tremor f250s?

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I like everything about the tremor except the name. If we're going with hunting mythical sand worms I would have preferred to see it called the F-250 Atreides package.

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It would be green and white with a Hawk emblem. Sign me up.