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How Much Cash Should You Really Hold?
Cash feels safe. Over time, excess cash quietly works against you through lower returns, inflation, and taxes.
In Episode 29 of Return on Reason, we dive into how to optimize the return on your cash by exploring how much to hold and where to hold it, so that it works for you, not for your bank or brokerage.
00:00 One Word That Cost Investors $2B (1-3)
Why cash matters and the Capital One savings account story.
05:36 Why Investors Leave Cash Uninvested (4-5)
Vanguard research on rollover IRAs sitting idle.
07:34 The Three Drags on Cash (6)
Inflation, taxes, and lower expected returns.
14:09 The Cash Yield Ladder
Checking accounts, savings accounts, money markets, CDs, and Treasury bills.
18:40 How Deposit Insurance Works (7-8)
Understanding FDIC limits and bank failure risk.
22:13 Why Banks Love Your Idle Cash (9)
How banks and brokerages profit from idle deposits.
30:09 Taxes and After-Tax Yield
Treasury money markets, municipal funds, and tax equivalent yield.
36:21 When Cash Optimization Matters Most
Why larger balances make small differences meaningful.
40:19 Why People Hold Too Much Cash
Behavioral reasons and income variability.
42:16 The Liquidity Ladder
Daily spending, emergency funds, and goal-based savings.
49:00 Action Steps for Investors
How to evaluate and optimize your cash.
Follow on Apple Podcasts: https://podcasts.apple.com/us/podcast/greenstream/id1795467982
Follow on Spotify: https://open.spotify.com/show/26NYX6WD7godcJAYVE0Yk8?si=Qxj-H7HiRdGmbNlW8uuV9g
Subscribe for Email Updates: https://greenspringadvisors.com/greenstream-podcast
Meet with Pat & Marcus: https://outlook.office365.com/book/MarcusCalendaratGreenspringAdvisors@Greenspringos33.onmicrosoft.com
Sources
References to third-party charts, graphs, and other illustrations are for educational purposes only. These materials are intended to provide general context and should not be relied upon alone in making investment decisions. Any such information has limitations and should be considered together with an investor’s individual financial circumstances and objectives. Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.
View all episodes
By Greenspring Advisors
5
77 ratings
Cash feels safe. Over time, excess cash quietly works against you through lower returns, inflation, and taxes.
In Episode 29 of Return on Reason, we dive into how to optimize the return on your cash by exploring how much to hold and where to hold it, so that it works for you, not for your bank or brokerage.
00:00 One Word That Cost Investors $2B (1-3)
Why cash matters and the Capital One savings account story.
05:36 Why Investors Leave Cash Uninvested (4-5)
Vanguard research on rollover IRAs sitting idle.
07:34 The Three Drags on Cash (6)
Inflation, taxes, and lower expected returns.
14:09 The Cash Yield Ladder
Checking accounts, savings accounts, money markets, CDs, and Treasury bills.
18:40 How Deposit Insurance Works (7-8)
Understanding FDIC limits and bank failure risk.
22:13 Why Banks Love Your Idle Cash (9)
How banks and brokerages profit from idle deposits.
30:09 Taxes and After-Tax Yield
Treasury money markets, municipal funds, and tax equivalent yield.
36:21 When Cash Optimization Matters Most
Why larger balances make small differences meaningful.
40:19 Why People Hold Too Much Cash
Behavioral reasons and income variability.
42:16 The Liquidity Ladder
Daily spending, emergency funds, and goal-based savings.
49:00 Action Steps for Investors
How to evaluate and optimize your cash.
Follow on Apple Podcasts: https://podcasts.apple.com/us/podcast/greenstream/id1795467982
Follow on Spotify: https://open.spotify.com/show/26NYX6WD7godcJAYVE0Yk8?si=Qxj-H7HiRdGmbNlW8uuV9g
Subscribe for Email Updates: https://greenspringadvisors.com/greenstream-podcast
Meet with Pat & Marcus: https://outlook.office365.com/book/MarcusCalendaratGreenspringAdvisors@Greenspringos33.onmicrosoft.com
Sources
References to third-party charts, graphs, and other illustrations are for educational purposes only. These materials are intended to provide general context and should not be relied upon alone in making investment decisions. Any such information has limitations and should be considered together with an investor’s individual financial circumstances and objectives. Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.