Key insights
- A 20-year-old with a $93k net worth, including $63k in cash, seeks advice on optimal asset allocation given a low income. The discussion revolves around balancing liquidity needs with the potential for higher returns through investing, and whether to deploy cash in a lump sum or gradually. This highlights a common dilemma for young investors, but has minimal direct impact on broader US equity market movements.
Hi everyone, I’ve been wondering how much cash is actually too much, especially when you’re young and have a long time horizon. I’m 20 and have around ~$93k total right now, with about $63k sitting in cash (some in a ~3.3% account and some just in checking), about $24k invested between a Roth IRA and a brokerage, and a small amount in gold. I only make around $20k/year at the moment and don’t have any big expenses coming up like a house or anything.
Part of me feels like I’m being way too conservative holding this much cash, but at the same time I get that having liquidity matters, especially with a lower income. Just curious how other people think about thiswhen does cash start to become excessive, and how do you decide between keeping it vs investing it? Also wondering if people usually prefer to invest a big chunk at once or spread it out over time when they’re sitting on a lot of cash.