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birb_cromble  27d ago (text post)   1238 thread views

Weekly Finance Thread

Since a lot of us here have expressed interest in not starving to death in a gutter, I figured I'd start a weekly thread to discuss financial matters.

Ground Rules

  • Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
  • Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
  • Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
  • Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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https://www.sec.gov/Archives/edgar/data/1181412/000162828026036936/spaceexplorationtechnologi.htm

SpaceX S-1 is public. Reading over it so far, I'm not particularly impressed. I'm surprised that rents from anthropic are their biggest source of revenue right now, beating out starlink. Any predictions on how this IPO goes?

Has anyone here had any success actively trading over a long period of time (at least 10-15 years) and beat the average market return of 10% to 11.5% over that time period? Do you have confidence you will continue to beat market, and how much time and effort do you spend actively trading? If you are making a living actively investing (off your own portfolio, not managing other peoples money, what was the approximate size of your portfolio where it was feasible?

If you do active trading, do you also active trade in your IRA?

My thought is that for most people, active trading is an exercise in futility, and the data seems to back it up. Nearly all retail investors that actively trade don't beat the market average (or even lose money), and even like 70-90% of professionally managed funds don't beat the S&P 500 each year. Over a longer period of time, the percentage drops even more suggesting those funds were just lucky.

Every other week I hear coworkers/friends/people in discord servers I'm in talking about stocks, but I can't help but feel like they're mostly gambling rather than having a system that actually works. Some of them have had successes beating the market but they've also been only trading for like 2 years. I'm always wondering if it's like a gambler bragging about his wins but never sharing his losses (but at least in the stock market the expected returns are positive). Comparison is the thief of joy as the sayings goes so I guess it really doesn't matter how other's are doing on their finances as long as you personally are doing okay, but every once in a while I can't help but feel like maybe I ought to take some time to look more into individual stocks and see if I could do better. But at the same time, for someone in my age bracket I'm doing fine, so maybe I don't need to try to do better in this area, and I can put my mental effort towards other things.

Personally I have about 6% of my portfolio in individual stocks, 1% in crypto and the rest in various index funds. I'm thinking of just selling all the individual stocks and then not having to worry about my stocks ever again, the only reason I haven't sold them is because a good chunk of them are in SAAS and security tech companies who's valuation is lower because of the AI boom, and I'm hoping they recover since my belief is that AI has not yet provided meaningful advantages in those areas.

I don't have decades of experience, but have outperformed for the past 6ish years, with a combination of a few high conviction bets (tempered by a number of duds), luck, and discipline to dump a significant percentage of gains back into the market rather than doubling down every time.

Selling options and market making have positive expected returns, since you're basically providing a service (you're basically selling insurance and providing liquidity), but in the former you're explicitly taking on extra risk, and for the latter you'd need to find a niche market to operate in, because the big ones are crowded by actors with way better economies of scale.

You need to learn to read charts, as well as accept that timing is possible + essential. If you're not at least willing to invest in some books and a TradingView subscription (or similar), you're not being serious about active investing.

Nobody would accept the possibility of performing surgery or any other skilled work without serious training, but people seem to expect to be able to do well in the markets without educating themselves and obtaining the tools.

If you want above average results, put in above average hours and build your own skills. Most of the information you need is either publicly available or available through relatively low cost books and services.

Do you engage in active trading, and if so have you consistently beat market average returns over a long period of time? How long have you been profitable?

If you do, how much time did you invest in learning before the effort was financially worth it? How much time do you spend now? At what size of your portfolio did it become an activity that became worth spending your time on (if we exclude it being an activity you do as a hobby).

Nobody would accept the possibility of performing surgery or any other skilled work without serious training, but people seem to expect to be able to do well in the markets without educating themselves and obtaining the tools.

Yes, but we can see clear evidence that people do put in the effort and become actual doctors and surgeons. I haven't encountered in my personal life anyone that day trades for a living. The previous VP of tech at my company did day trade, but considering he was still working as the VP of tech I get the feeling it was more of a hobby for him than anything else. Amongst the people who that maintain an online presence related to some form of active trade I found their success dubious or shady (often their online presence is a funnel to some sort of course which is their actual wealth generator). Cameron Ross is a name that gets thrown around as someone who successfully day traded but he engages in very risky trades and I haven't found evidence of anyone being able to replicate his success after taking his courses. On the contrary he had to settle with the FTC after they got sued for misleading his students about the success of following his courses.

Of course since trading is something so easy to get into the failure rates are highly inflated. I'm willing to accept that at certain markets and with enough retail investors playing the field you could get some sort of advantage by being more intelligent and disciplined, and that there could be retail investors with strategies that only work at a small scale that allow them to making a living off of trading. I'm looking for some actual stats on success rates though since there are plenty of other ventures, careers, side hustles etc that have more concrete evidence of success for a given level of effort. Some people have told me it takes on average 2 years before day trading becomes profitable but they didn't provide me with any evidence and the fact that they weren't day trading full time doesn't instill much confidence in that number.

Since we have this weekly thread now and the Motte has a lot intelligent autists I figured I might be able to get some actual perspectives from successful active traders (if there are any here).

Just saying put in more effort if you want to get good at something doesn't mean much, that's just obvious. Becoming a surgeon takes 13 to 15 years. A lawyer takes 7 years. You can land an entry level software engineer role if you dedicate 6-24 months of intense study. What's the average effort threshold for active trading, to say, beat the minimum wage if you had a portfolio of 1 million dollars compared to just passive investing? Last thing I want to do is spend 1-2 years on something that won't yield good results.

I'm still early in the journey. I started dipping my toes into investing only 2 years ago. I've done okay so far.

2 years of learning is on the short side. Many of the best traders in history spent 4-5 years or more on making mistakes before becoming consistently profitable.

If you want "proof" that great traders exist, or inspiring stories, you could start with reading John Boik's How Legendary Traders Made Millions.

After that you can read other accounts by some of the names featured in it. Darvas, Livermore, etc.

I wouldn't conflate active investing with day trading.

There are no exact stats, but approximate numbers I've seen a few times go something like this: 30 percent are consistent losers. Around 60 percent make a lot and lose a lot, riding the rollercoaster up and down. 10 percent of active investors are consistent winners. They make a lot of money. If you want to be one of them, do what 90 percent are unwilling to do. Do your homework. Combat your fears, doubts, defeatism, laziness.

This last couple of years have been odd. If you picked the magnificant 7 then you look like a genius. But tech can swing drastically, and honestly I don't like Meta or Amazon. I split my portfolio between a little less than 30% in individual stocks, and just in my brokerage (the IRA is all funds). I should have riskier with the IRA since I had some good hunches (my brother talked to me about Fannie Mae and Freddie Mac when they were at less than 50 cents), but I'm a buy and hold guy. For picking individual stocks I mainly choose what I'm interested in, home-town favorites who my friends work for, and if I have any macro-economics hunches (if rates stay higher for longer how do you think that affects bank stocks?).

I've attained about a 16% average annual return over the past decade via a globally diversified, leveraged equity portfolio. I've lightly experimented with things such as leveraged fixed income on the side, but once the yield curve flattened I didn't think that would work so I exited and haven't returned to it (yet).

However, I do not consider this beating the market, as I attained the greater returns through greater risk. In fact, I underperformed by having to pay the implicit borrowing costs of leveraged ETFs and the elevated management fees compared to non-leveraged funds. This risk and underperformance I accept as the tradeoff for potentially greater total returns.

A lot of amateur investors may believe they outperformed the market, when they just got lucky via gambling, taking on greater risk, and/or tilting towards certain countries/sectors/risk factors.

I've lightly experimented with things such as leveraged fixed income on the side, but once the yield curve flattened I didn't think that would work so I exited and haven't returned to it (yet).

TMF was the bane of my portfolio, sigh.

How much leverage do you target for your whole portfolio? Mostly LETFs, or other instruments as well?

I’ve targeted a natural glidepath downward in terms of leverage.

I’m currently at >1.5X (a day’s 1% world stock gain/loss > 1.5% net worth gain/loss for me) due to the global equity rally over the past few weeks/months/years through prior LETF holdings. I’d like to be at a lower ratio but my contributions are insufficient to rebalance, and I don’t sell positions with material gains due to tax reasons.

I've beaten the S&P by about 1.5% over the last 20 years. I do it with a fairly simple buy and hold strategy of broad market index funds, and a few tilts into growth and value funds, along with some real estate funds. The main thing is that I just... don't sell. I may stop putting more money into a fund, but I don't sell it. The market is pretty cyclical, so it seems to work ok.

I don't think that kind of buy-and-hold strategy is what OP is talking about regarding "active trading" though, compared to someone actively buying and selling individual stocks, relying on timing for profitable buys and sells. And I agree with the OP, this is generally a losing strategy over time compared to dumping things into funds and sitting. But it can be fun in the same way that sports betting can be: if you think you really do have a better-than-average insight into some company or another, you can lose up to 100% of your investment (avoiding margin), but you can make 100% or more.

SLV down about 4% today. Sad.

Up to 84 shares! :)

Okay, need some double-checking of my thinking. With an expanding family, and expanding home needs my wife an I are getting a bigger (and safer) vehicle. Long story short, its $60k, which we can actually cover outright without strain. If we do, there is a manufacturer incentive in a $5k cash rebate, which is quite nice! However, a separate, mutually exclusive incentive offer is $0 down (though we will have to pay roughly $6k in taxes and fees upfront, but that happens no matter what option we chose), 0% APR for 72 months financing, which seems to me to be an absolutely screaming deal. Some quick math suggest this saves $12k over a conventional loan, but even more importantly if we just throw that $60k into an index fund and pull our loan payments out of it, we will still have between $22-26k left at the end assuming average returns. We tend to keep our cars a long time and don't envision wanting to change out of this one. Is there any good reason not to do this?

The 0 down/0% APR is great if there's no prepayment penalty and you're 100% certain you can pay it off in time. A lot of people take that deal, then don't pay it back and get hit with back interest.

I don't know if I'd recommend an index fund though, you can lose principal in a down market.

The prepayment wouldnt be an issue as the whole point is to stretch it out as much as possible. And theres no back interest, its simply a loan at 0%, if its in arrears it goes to collections/repo. Our intent is to have our finance guy create a separate account that we put $60k in and have monthy payments pulled out of, with the remaining principle invested. Naturally theres risk of losing principle, but thats true of all investing. The exact investment profile is TBD, i was just using S&P for some back of envelope calcs.

Naturally theres risk of losing principle, but thats true of all investing. The exact investment profile is TBD, i was just using S&P for some back of envelope calcs.

Well, even FDIC-insured accounts have some risk of the principal being lost, but if I were executing the plan you were, I'd put most/all of the principal into a savings account for very low risk 3.2-4% return instead of a low risk 8-10% in an index fund. In a 1-72 month time horizon, I think the difference in risk is sufficiently high as to be worth the lower returns, personally.

it's 60 k$

A cursory search indicates that the cheapest new US vehicle with three rows of seating (not counting the Mitsubishi Outlander, whose third row is literally child-sized) is the Kia Sorento at just 34 k$, not 60 k$.

Hah, funnily enough thats the other model we had under consideration. We test drove both the base gas and premium phev versions and absolutely hated it. $34k stuck us as about $14k overpriced. Might as well just get a used lexus or something, and be much better off.

I think the cheap new car market right now is in a bad place- you can get fairly heavily depreciated but still new-ish and reliable upmarket vehicles for the same price and a much better ownership experience.

We'd both much rather buy a nice new car and drive it for decades (our newest current vehicle is 11 years old but still comfortable and reliable) than get a cheaper one that we'll get tired of and have issues.

My mechanic just sent out a notification that their allocation of motor oil is being cut by the dealer network, and to expect higher prices as a result. I looked online, and rumors abound that AutoZone is experiencing a similar problem.

This got me thinking about just how pervasive petroleum and petroleum byproducts are in the modern supply chain. The last time we saw prices like this was 2008-2012, and I'm struggling to make a comparison. The fallout of the financial crisis was so strong that it masked a lot of the effects.

What do you think will happen if the strait stays clogged up for another month? Six months? A year?

In the short term, I think we're going to see a lot of industries try to normalize a "fuel surcharge". I'm already seeing it locally from landscaping companies. I could see big logistics companies like Amazon try it as well. Beyond that, I don't think I have any predictions that are worth saying out loud.

In the short term, I think we're going to see a lot of industries try to normalize a "fuel surcharge".

Assuming you're in the US, I'm surprised this isn't already a thing -- it's been normalized for all manner of things in Canada since... I wanna say 2008? The last time we had a big sudden spike, anyways.j

Amazon etc. probably won't do it because they don't need to -- they will just tell their supply chain to eat it, and it will.

I've seen it in the US in the past, I'm pretty sure, but it's certainly not universal.

"anything that comes to your specified location on a 3T+ truck" to be clear; construction materials, cement, water hauling, stuff like that (plus freight I assume -- although I don't deal with that often). The installers/resellers of these things usually just roll it into the price at the consumer level. I think ferries may add a line on your ticket at times though?

Interpersonal finance question: how do y'all reconcile different finance/investing approaches when married?

Luckily, my wife and I don't have differing consumption habits; our main line items are taxes and our mortgage, and beyond that it's probably under $2k/month in expenses. But what we do with the remaining money is quite different. She's a balanced portfolio type; I'm more of a... adventurous type, though we both consider ourselves Bogleheads.

We reach compromises; e.g. recently I agreed to her requests for a $60k emergency fund, while before I kept as near $0 in cash as possible (her preference is $100k). Most of the compromises lean her way, though. At the same time, I've been planning to deleverage anyway as I draw closer to retirement, so it's not a big deal. But other situations have led to conflicts. E.g. we both have family members who want money; she sees familial handouts as a way to make life smoother, I see them as throwing away money to enable bad patterns.

Meeting halfway, or near enough, has worked fine for us. And most financial conflicts dissipate into irrelevance if you have money (so, maybe the generic solution to financial issues is to have money). But do you have a different approach?

We each invested our own work based retirement accounts. I handled our finances beyond that. I do pretty standard Boglehead, my husband was more aggressive. He was a spender, I am a saver. But we pool money so as long as our emergency fund was full & our retirement numbers were being met I tried not to get too antsy when he was freer with money than I would have been.

We agreed generally on giving money to others. He was more generous but he was also open to my "enough." Money didn't mean anything to him, so giving it away wasn't a big deal. I am pretty financially conservative (my standard rule was we lived on one of our incomes and the other was for saving/investing). We mostly met in the middle, more towards my side early in our marriage when we were struggling and more towards his side as we funded our emergency and retirement accounts.

It took us about 5 years of marriage to get on the same financial page.

Our kid is a good blend of the two of us. She seems to have a pretty healthy relationship with money. Save enough for tomorrow, spend enough to enjoy today, share with people you love.

In our case, we've kept our finances largely separate for our entire marriage, and it continues to work relatively well for the two of us. When we first started dating, my wife had a sizable inheritance that I was conscientious about leaving in her hands and not accessing, so we just split the bills and evolved into each of us paying for certain things and not questioning the other's spending habits too awful much, excepting some big ticket changes, of course. If we had managed to have kids, that probably would have changed things, but here we all are.

Generally I make all the decisions, in so far as spending/saving is a decision. Lately it hasn't felt like much a decision, with multiple random and unpredictable 4 figure bills falling out of the fucking sky each month this year. Mostly been treading water month to month through major mechanical, home and health related bills.

That said, the savings are generally "my" savings in that I've allocated and managed them. I've managed some of my wife's money from before we were married, or come up with plans about what she should do with it aside from leaving it in a savings account forever. But she's hyper risk averse, so it's unlikely to ever move. At least I got her to move it from a 0.01% "savings" account to a "high yield" account 10 years ago. Even that nearly gave her a panic attack.

multiple random and unpredictable 4 figure bills falling out of the fucking sky each month this year

You too? I feel like my wallet's been kicked in the balls this year.

But she's hyper risk averse, so it's unlikely to ever move

My partner is the same way. It took me about five years, but I finally talked her into setting up a Roth IRA a couple of years ago. She hates it, but she's doing it.

I'm very fortunate the last year or two has been good to stocks, as aeeing my 401k index fund performance has given my partner the courage to set up an auto-deposit/auto-invest into an IRA. It also probably helps that as of now, it's still a very small amount compared to the overall retirement picture, so it doesn't feel like it's risking loss of a significant amount.

Financial disagreements is the predominant reason leading to divorce. I would even argue that most other relationship problems can be helped by being more wealthy. But anyway. You two seem to have good communication. Maybe throw some videos from “I Will Teach You To Be Rich” her way. I do think trying to live a rich life is more sensible than just hoarding wealth. That guy also specializes in the niche of financial advice for couples, and navigating all the relationship issues when it comes to money. I’m not sure if 60k in emergency fund is low or high for you but 100k is a lot when compared to my own situation (engineer couple in NYC). It seems like your wife has some deep rooted fears or pathologies when it comes to money that makes her want such a high emergency fund. On the other hand, you have the other extreme, what is your reasoning for wanting $0 in emergency fund cash? Is there something you’re not noticing about your relationship with money as well?

One caveat on the 100k emergency fund thing, if you guys have really high annual spend, and I’m talking like 200k and above here, then 100k makes total sense as that’s only 6 months of spend.

One caveat on the 100k emergency fund thing, if you guys have really high annual spend, and I’m talking like 200k and above here, then 100k makes total sense as that’s only 6 months of spend.

Only if that's 200k of required spend (e.g. rent). If you're spending 200k due to taking three luxury cruises a year, it's probably okay to not factor that into your emergency buffer.

How much emergency cash do people keep around? and where precisely so I know where to look I don't mean uninvested money in a checking account or whatever, I mean literal cash not in a bank.

I have a few thousand, which might be too much, but zero feels like too little.

Around $2K. I spend cash rarely so it's mostly cash that I've been given by others that I have not deposited. Since it hasn't been withdrawn by me either it's untraceable to me. I primarily use it in the event I can get an under-the-table cash discount from tradesmen in Minecraft.

Enough that if i'm stressed and not keeping pace with life that i'm still good for a month.

No cash, at all. I walk around downtown a lot and don't like lying to bums. "No, sorry."

I generally have 500-800 in my wallet and another 1000-1500 in the house, but I play poker regularly so there is an actual use case. Absent that, I would probably keep 200-300 in the wallet and 500 in the house. I'm Gen X though and almost exclusively used cash (with the occasional check) until my late 20s, so it's a habit.

Interest on $1000 is what, $4/month tops? I'd rather have the flexibility.

$500 in golden dollar coins and $300 in paper.

What, in case you get Isekai'd to a fantasy realm?

I like tipping with them, or paying for stuff at conventions. It's a conversation-starter.

That's... pretty clever, actually. What's the best way to acquire them? Do you just get them from your local bank, or what?

The bank gives them to you in $20 rolls, some of them are susanBanthonies, but I just use those first and put the rest in a decorative wooden box thing. I'm a child at heart.

Literally nothing. I don't even have any notes in my wallet.

What are you keeping it for? In a situation where the electronic banking system goes down for a meaningful amount of time, I'd rather have food stockpiled than cash (although you can of course have both).

Several years ago, my bank card was compromised, and when I went to use my credit card, it automatically locked because of "suspicious activity". This all happened on a three day weekend when I couldn't straighten it out easily. It taught me the value of having some cash on hand for essentials.

Awhile ago I had to call my bank in advance to seek approval for a very large transaction that I 100% knew was going to get denied and flagged as fraudulent. They were able to extend my limit for the day and I was able to get the transaction split into two separate bills, 50/50 and it went through just fine. There was another time when I was moving money between accounts, one into an Venmo account, and somehow a small online transaction got denied, using my debit card. It was such a pain in the ass to contact Venmo customer support (it’s intentionally buried in layers of bureaucratic bullshit), they couldn’t process it through. The usual “Uh. Yeah. Sorry. Don’t know what it is but can’t help you.” Anyone that’s been a supporter of FinTech companies over the years has obviously never had to resolve a problem with them when things go wrong. There’s a lot more rot underneath the “innovation” of these businesses than is imagined.

A mundane example would be something like identity theft. Freezing/closing compromised/fraudulent accounts can be time consuming, and paper currency can bridge the gap until new accounts can safely be established.

I usually keep zero cash. I have usually $1k in a checking account and $20k in savings accounts.

Literally paper cash? Usually $500 to $1000 (some in the wallet, other in desk drawer). I have an ATM within 10 minutes reach, haven't ever felt I need more.

Twenty grand in benjamins.

We've got a couple hundred sitting around for tipping housekeeping.

Otherwise, I feel like I should have some (a couple thousand?) in our go bag. The issue is I don't know how to size it: in a scenario where banking and payment infrastructure is shut down entirely, what problems am I trying to solve with cash? Seems like extra ammo would be a better use of the space. Maybe gold jewelry if I expect to be moving abroad?

The issue is I don't know how to size it: in a scenario where banking and payment infrastructure is shut down entirely, what problems am I trying to solve with cash?

The banking system need not fail generally for backup cash to be useful, it just needs to fail you. This could be through some bank error, or it could be because you got put on a list. Not long ago I would not have predicted that "donated a small amount to a non-violent protest movement" could result in your bank assets being frozen, but it happened in Canada. Now I think it's wise to assign some low probability to otherwise innocuous things exposing you to this kind of risk.

As anti-AI sentiment builds perhaps "frequently commented on SlateStarCodex" could be reason enough to freeze a person's assets.

in a scenario where banking and payment infrastructure is shut down entirely, what problems am I trying to solve with cash?

I think this is a worthwhile question: I don't use cash often, but a few times I've needed to settle up things like group meals ("no split checks", ugh) it's often a hassle to deal with change since nobody has much. Can't pay $27 with just twenties, but people aren't ready to round to the twenty. Few carry enough smaller bills to break a twenty. We usually end up doing Venmo or whatever.

Not sure what to suggest, honestly.

My husband needed around 5k in assorted denominations. I need around 1k in bills no larger than 20s, and $100 in quarters. Neither of us had a convincing argument for why our way was correct.

For cash, usually zero to a thousand or so. I don't pay particularly close attention to keeping it up. It's more for if I'm about to go somewhere but find I don't have that much cash in my wallet, it's slightly easier to grab some than to stop at an ATM, though that's not at all hard either. I don't take it too seriously as emergency prep, mostly since living in a big city, any massive crisis that results in me not being able to get more cash from ATMs easily or buy things with cards will also cause much bigger, more widespread, and difficult to predict chaos that a little cash is not likely to save me from.

What I do consider as more useful emergency prep to keep safely stored at home is a valid working credit card and ATM card, working spare phone with no service, and expired spare ID. I can lose pretty much everything I typically carry on me and not experience significant hassle.

Right now, zero, but I think you're right that it should be nonzero. I'm going to start keeping some cash around, I think.

I think I have about $3000 ish in a safe. But sometimes it gets dipped into and not replenished when we are too lazy to hit an atm.

That said, the safe also has about $20k in gold though. Didn't mean to, but 6 oz appreciated in value a lot the last 10 years.

Check again. 6 oz is more than 20k.

I have a few thousand, which might be too much, but zero feels like too little.

Same, and my brain won't shut up about how it would make much more sense for me to add it to my mad money brokerage account and reap the extra GAAAAINZ. But then, it's emergency money, it's doing exactly what it's supposed to be doing.

If it makes you feel any better, think of it as insurance.

If you invested $1,000 in the S&P 500 five years ago, you'd get a 77-78% return. Amortized over 5 years, that's about ninety-seven cents a day. How much is it worth to you to have cash handy if your card gets stolen and your bank is closed? Is it a dollar a day?

hmm that makes me want to have less emergency savings, not more... I started a fight with my wife over a $1/mo. charge when we first got married.

I usually use the cash drawer for more routine emergencies like "omg, I am late to my hairdresser appointment and I forgot to get the cash! - No worries, my dear, just take it from the cash drawer!" or "The gardener says he wants cash, have you got any cash?" The drawer has enough to cover any such inconvenience and gets replenished within a week.

For losing the wallet (or getting the walled chewed up by a puppy, ask me how I know) I have a bunch of cards that I usually use once a twice a year but they can serve as replacement for my regular ones for a while, and if I need to identify myself to the bank (like, to replace the stolen ATM card while the ID is stolen too) I can use my passport. Theoretically it'd be prudent to store a couple of copies off-site in a secure storage too, but in practice I'm too lazy to do that. Maybe I should.

I've got about $20 in cash in my wallet and probably $5 in quarters somewhere in the car.

None in my crib, aside from some loose foreign bills and coins in various currencies I’ve accumulated from trips abroad over the years and have been too lazy to deal with.

I do keep a small amount of cash in my wallet in case I want to spontaneously buy dru— errr, something from a food truck and it doesn’t take card. Yeah, that’s it.

I wouldn't sweat the opportunity costs of not having invested a few thousand dollars or so, especially if it buys you peace of mind. After some number of years of being an investor, a few thousand dollars becomes trivial compared to your overall net worth.

I try to always keep $40-50 as a minimum on my person (separate from my spending cash in my wallet).

As far as cash in the house beyond that? None. The situations where I will need cash in an instant and a check/electronic venmo/run to the ATM won't work are... basically just an EMP/solar flare situation that I for some reason can't wait out for restoration. Maybe that happens, I run out of food in a week, there's still no government response, but the stores have product they're willing to sell for cash only?

Perhaps I'm unimaginative, but it just seems too unlikely to be worth worrying about for me personally. Not that there'd be any harm in keeping extra cash in house, though, so it's not a terrible idea just for things I haven't thought of and/or convenience.

Maybe it’s different for you, but for me:

  • I had my wallet stolen once, so no card.
  • Sometimes the fraud systems flag you, no card.
  • Potentially a cyber crisis or run on the banks.
  • Sometimes, rarely, you need to pay for something in cash and you have withdrawal limits.

It’s mostly the first two. Given that banks take a week to replace cards, I think you need at least a week of money hidden at home.

Sometimes the fraud systems flag you, no card.

For me, that's more likely (both to happen and to have immediate requirement) when I'm traveling, hence (one of the reasons for) keeping a nominal but not bank-breaking "emergency cash" in my wallet. Plus multiple cards, including with differing institutions.

I've got multiple credit cards plus a bank card all stored on my phone. When my banks have flagged transactions as fraud, I'm able to authorize them via SMS. IME digital wallets continue to work even if a card is deactivated for some reason and replacement cards are mailed overnight, so the opportunity cost of keeping thousands under the mattress outweighs anything else.

I've also never had a situation where I had an expense that positively could not be put off for a few days and was payable in cash.

Usually between fifteen hundred and three thousand in the safe, plus another two or three hundred in my wallet. Enough to get me through a month or two of room and board, and also useful for unexpected expenses.

I'm extremely conservative by the standards of this forum, and I keep $1,000 cash in my house. That's enough to get me a couple of weeks of my bank account gets hacked or something.

What the hell is going on in Korea?

South Korea's stock market suffered a sharp selloff on Friday after a historic rally pushed valuations and investor positioning to extreme levels, exposing how heavily the market had become dependent on a handful of artificial intelligence-linked semiconductor stocks. The benchmark Kospi plunged 6%, wiping out early gains after briefly crossing the 8,000 mark for the first time in history during morning trade.

Is anyone putting money into Korean equities? There is a lot of momentum in that area, but momentum investing is a risky game. In some ways, it feels like the Korean market is a preview of the US one. They're smaller, and growth even more concentrated in the semiconductor --> GPU --> data center --> AI chain than the US is.

They also have the smallest remaining oil stockpiles, so it's possible Hormuz is finally hitting them.

I hold Korean equities insofar as I hold international ETFs/mutual funds. It's not uncommon for emerging markets and the smaller developed markets to experience eyebrow-raising one-day drops. Korea is only about 2.3% of the global portfolio.

Korea is one of those weird economies/markets that's classified as both emerging and developed, depending on who's doing it, right?

A given investment company won't classify an in-between country like Korea as both emerging and developed simultaneously, but indeed, investment company A might consider Korea developed but company B consider it emerging for fund composition purposes. An example of A would be Vanguard, an example of B would be BlackRock (whose index funds typically track MSCI indices, which classify Korea as such).

I think so. I've seen Korean stocks in both international and emerging market funds.

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