How Much Do I Need in Cash Reserves?

Industry experts say that 3 to 6 months of your fixed and variable expenses should be in your cash reserve. At Beacon Financial Group, we believe that it depends on your comfort level, and that is something that is going to be different for every client. Some people want $5,000 - $10,000 liquid, knowing that they have other sources to go to, and others want $50,000, no matter what.

As Beacon Financial Group advisors, our job is to show clients how to possibly increase the rate of return on the investment, without taking unnecessary risks, and to find ways to reduce the amount of taxes they are paying on their investments. Inflation is a part of life. There is not much we can do about it, but we can come up with strategies to help outpace inflation and get the money working harder.

Everyone needs to have a cash reserve, and they need to decide on the amount. Excess money sitting in that position is not a good idea.

For example: If someone has $50,000 sitting in a checking or savings account, and they have determined that they only need to keep a $15,000 cash reserve, then they have $35,000 earning $0 while being eaten by taxes and inflation.

Financial planning means putting all the pieces together-- starting with cash reserve and excess liquid money.

Where will you invest your excess cash reserve?


For more information, contact Beacon Financial Group to speak to an experienced, licensed advisor: (888) 769-4333 or info@beaconfinancialgroup.net.