Am I holding on too much liquid cash?

If it's emergency fund, I'll put them in saving acct. (which is also what I do) because they're the most liquid form which you can draw out immediately (without any delay).

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Instruments like Syfe Cash+ and Endowus Cash Smart are still investment products, and you may not get to draw out within a day if there's really an emergency. Also, even though they're lower risk instruments, you may still see some fluctuations in your amount due to the market movements.

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If you're referring to cash that's not set aside in emergency fund, I use them to generate monthly income and/or invest them, via stocks and options. I don't put them in bonds or money market funds, as I'd like my money work harder.

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However, based on what you've described "It seems that when it comes to how much cash we should keep it has always been 3-6 months of expenses/income as cash.", this looks like your emergency fund.

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If it is, I'd suggest don't touch them. Emergency fund, as its name said, is for emergencies. Please feel free correct me if I'm wrong.

Hi Zach, that is fine actually. I personally am keeping more cash instead. Roughly 20% of my entire asset. Reason being I like to have the freedom to jump into the market when it crashes to make use of the opportunity.

Each dollar has an eventual destiny, we earn to spend. Save up for the future expenses.

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So take the hypothetical;

• your laptop is gonna be spent maybe in 3 years time
• You need another pair of glasses in 2 years time
• another set of formal clothes in 2 years time
• Youre paying taxes next year
• planning for a vacation in 8 months (haha fingers crossed)
• Attending a wedding in 4 months.

Those are predictable future expenses which you can reasonable estimate the cash outflow. We earn to eventually spend, hence may I suggest that on top of your emergency funds (for the unseen future expenditure), you also save up for the expenditures to come!

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A $3k laptop in 3 years can be broken down to just $83 per month, a $250 runners in 18 months is just $13 per month.

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Once you budget and save in advance (they are different notions), you have full confidence that each dollar has a certain "destiny". Those dollars with an unassigned purpose, well, you can grow them!!!

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In short, you never know whether you are holding on too much cash until you project your near term outflows. Do that first and you will gain clarity. All the best!

You can invest one month's worth of money when the market dip, then fund money back to your savings account when market rise