Investment Advisor Representative
March 3, 2023
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How much should you keep in your checking account?
I have clients and friends who ask me this question. It’s a good question.
I’ve had cases where there was way too much or in some cases too little.
How much is too much?
Anything over $50000 should warrant some thought and discussion.
A good rule of thumb is 3-6 months of income. So based on an income of $8000 per month, a liquid account level of $24000 to $48000 would be the right amount. Part of that number could consist of a line of credit.
What’s the cost of liquidity?
For every dollar in these accounts
It costs about 10% per year in lost growth. So $100000 would cost $10000 per year.
These savings are also known as “emergency funds”.
Make sure you drop me a message if you have too much here.
Let’s get your money working for you!