Have $100K+ Sitting in the Bank? Do THIS Instead

We see a lot of people who come to us, they watch these YouTube channels, they've read my books, they've seen us on Kiplinger, whatever it may be, when they reach out to us, we often see that a lot of them have more in their savings than maybe what they suggest is fair.

And a lot of times they say it's just because we've accumulated money, our pension income's coming in, our social security, or hey, we've got our working income, whatever it is, they have more than they need, and they aren't sure where to allocate it is what we typically see.

And so if you find yourself in that situation, you're gonna love the video today, because I'm gonna break down some of the pros and cons of having too much in your bank account, but also help you decide what is the right amount there specifically as well.

I want to start off with the emergency fund.

We always need an emergency fund.

I don't care how large your pension is.

I don't care how much you have saved up.

We always recommend an emergency fund.

We always recommend that place to go to to pull out cash in a short-term need, let's say the next six months to a year specifically, to make sure that you don't have to maybe pull from your investments if the market's down or have to worry about...

Taking a few days to get your money if you want to go buy something today.

So it just adds that flexibility and just the feel good there to have it.

Now you're probably wondering what is the right amount to have in that emergency fund? I'll tell you, it ranges all over the place for our clients, but I would say for most of our clients, they're having anywhere from probably about $20,000 to about $75,000 is what I would say that most of our clients have in that place.

Now, that is just for emergency.

So if someone came to us and said, hey, I'm going to buy this new property in six months and it's going to be $300,000 I need to put down for it.

Well, in that case, we're probably not going to only have $20,000 in the emergency fund.

We're probably going to have $320,000 if they say that $20,000 is the amount they feel comfortable with.

in that amount there.

And so if that's the case, we want to make sure there's enough in there for short-term expenses as well so that it is readily available and to not miss out on some of the things I mentioned earlier, like the market being down or things like that.

So that's how we think about it.

Now, I would say most of our clients end up being in that $30,000 to $50,000 range is what they feel the most comfortable with.

Even though they could get by with a little less, they just like that little extra comfort.

And so that's typically what we suggest people to have there.

Now you could technically have much less there because of that pension income almost serves as an emergency fund.

Remember, most of your peers don't have that pension that comes in every single month.

So they're gonna have to rely on their emergency funds a little bit more than what you would.