What percentage of my money should I keep in cash?

What percentage of my money should I keep in cash?

When it comes to the amount of your money that you want to keep in cash, there's a lot of different rules of thumb out there. It's a very difficult question to answer in a broad sense; it's really unique for an individual. One of the common rules of thumb might be three or six months worth of expenses in cash. What you're doing is providing a cash safety net for yourself in case you were to become laid off or change jobs. However, there are a lot of ways in today's society to gain access to money in a very inexpensive manner. Margin could be a perfect example of that. Instead of keeping a certain percentage of your money in cash, earning very low rates of interest, you might be able to give yourself a margin loan for that short period of time when you're out of work and the net cost to you is probably going to be less. For the most part, you are not going to have this money sitting in cash that you may not need for three, four, five years, so that money is really never working for you. A margin loan, access to a home equity loan, or even you putting some expenses on low interest rate credit cards could really bring you through that period, and the net cost would be much lower to you than having a lot of money sitting in cash and not working for you.