I hold on to lots of cash. It’s something that not everyone is a fan of, but it’s something that is going on in my life right now. The sentence: ‘Cash is king’ is an old metaphor often used. Cash can make your life a whole lot easier.
It’s just as important to keep your money liquid. Liquid money is easy to access and is not subject to market gains or losses. We’re talking about savings, checking, and hard cash.
Peace of mind is a big part of why I’m keeping part of my portfolio in cash. I’m not only saving for my emergency fund but also keeping some extra cash aside apart from that.
If you have cash, you can spend it however you want. You don’t have to sell shares if the market is down and you don’t have to wait for anything to reach maturity.
Wait for the next market opportunity and go all-in. If you would have a pile of cash to invest in 2009, when the market hit the low, you would have more than doubled that money by now.
Having an emergency fund is a good way to start your cash back up. Once you have a decent emergency fund – it’s up to you how much cash you want to have.
Cash is needed for big purchases, like a car or your home. It’s not only the down payment you need to make to either of these, but it’s also the case that you might be able to buy your car without getting into debt.