The theme this week on the One Minute Retirement Tip podcast is: Are You A Money Hoarder? 

Today, I’m talking about the $17 trillion cash stockpile. 

Although money hoarding may be an acute problem for some, there’s actually evidence that money hoarding is a real issue for many Americans and small businesses today, primarily driven by a steep increase in cash due to Covid. 

You may have heard about this in the news...I come across articles from time to time that discuss the stockpiling of cash held by Americans who have kept their jobs through Covid, had their bank accounts bolstered by stimulus checks and PPP loans in the case of small businesses, and because of continued uncertainty around Covid, simply haven’t spent any money. 

Earlier this year, I talked about data showing that the savings rate among Americans was around 30% of income. Many of us are stockpiling cash, and a recent article in MarketWatch cites data from the Federal Reserve indicating that the cash stockpile among American households and small businesses continues to rise in 2021. 

This all makes sense when you consider that making travel plans is still frustrating with the Delta variant, supply chain issues making it difficult to spend money on everything from dishwashers to laptops, and new restrictions in several states makes it difficult to spend money on eating out. 

So the bottom line is that cash has exploded from a pre-pandemic $12 trillion to the current $17 trillion, indicating that many of you listening are likely part of the current cash hoard. If this is you, remember that it’s unnecessary to keep more than 3-6 months of savings in cash for emergencies + a little bit more if you’re retired. If you’re sitting on much more cash than that, it’s likely detrimental to your long-term portfolio value as an investor. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance