I'm curious to get a sense of what folks' cash allocations are.
When Covid hit last year, we had some uncertainty with our jobs so we just built up our cash position just in case and we sorta kept at it (while still contributing to our retirement accounts, maxing 401ks and IRAs). Our savings rate has been about 50%. Right now, this is how we're allocated:
Cash - 10.6% (approx. $91k)
Investments - 68.9% (approx. $604k)
Home Equity - 20.5% (approx. $179k)
Definitions:
> Cash = checking and savings accounts
> Investments = multiple retirement accounts, two brokerages, and two 529s
> Home Equity = last appraisal value when we refi'd minus mortgage balance (we bought our home a few years ago so the mortgage is still big)
I know there's a lot out there about the right amount of emergency funds, i.e. 6 months spend. I also know what we have a large amount of cash, probably way too much in the Mustachian world, but it does give us peace of mind. It also gives us options:
1) I think we'll probably take some chunks to pay down our mortgage principal a bit.
2) We also want to do some projects around the house.
3) Our kids are younger but we do want to send them to the local private high school in 8-9 years (b/c that's important to us), so we're starting to think about planning for that (not sure what the best option for that would be? federal money market? or??).
4) Assuming the market has another correction, would be nice to buy extra when equities go on sale (see Morgan H:
https://www.fool.com/investing/general/2013/08/19/what-i-plan-to-do-when-the-market-crashes.aspx)
Anyway, this is what we've been thinking about. Thanks for the input.