Best options for excess cash

General
1

I have been gradually building up my cash savings and am exploring better options beyond CDs.

What began as a 6-month emergency fund has grown to approximately $300,000 over the past 5-7 years. Currently, about 75% of this is invested in short-duration CDs with a 5% APY.

I have no debt aside from a remaining mortgage of $250,000 at a 2.25% interest rate.

I actively contribute to 529 accounts for my kids and invest the maximum amount into traditional IRAs each year $7,000 this year, along with maximizing my 401k contributions.

I am in my early 40s with two children in grade school and do not invest in crypto or individual equities.

9 Likes
2

With $300k, you may investigate diversified index funds or exchange-traded funds (ETFs) for long-term gain, or you could check into high-yield savings accounts for improved liquidity.

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3

This. It has a nice balance between investment potential and liquidity. :100:

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4

Why have you been saving so much cash? It might be better to invest a larger portion of it in broad index funds.

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5

I didn’t plan to leave such a large cash deposit. Just over the past few years, it’s kind of happened little by little.

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6

I use gold as the cornerstone of my emergency fund, filling a gap in my asset allocation and serving as a form of wealth insurance.

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7

My recommendations would be investment grade corporate bonds, investment grade munis, agency MBSs, and 6 to 10 year Treasury notes, in that order.

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8

Wow, why do you have so much cash? You could have potentially earned another $100,000 over the last 5-7 years with minimal risk.

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9

They are looking for the ideal moment to join the market. Right now, everything is too pricey.

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10

What is the reason behind your large cash savings? It is preferable to have a large amount of broad index funds

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11

I didn’t intend to keep so much cash, it just accumulated gradually over the past few years.