Several years ago, regular reader and guest author Vagabond MD wowed us with the fact that he happily sat on a half a million dollars in cash.
Well, he didn’t literally sit on that much cash, nor did he keep it under his mattress as he hyperbolically claimed, but he did indeed have that much money invested in cash equivalents.
I checked in with the good doctor for an update at a time when holding cash was looking rather brilliant as the stock market had (at the time) given up over 30% of its value in a matter of weeks. Was he still figuratively sitting on a $500,000 pile of greenbacks? Nope. One million dollars now.
It’s nice to have a substantial cash cushion so that an absence of professional income will not affect my lifestyle anytime soon. And I still have the bucket strategy (or bond tent) mindset, having set aside 5+ years of living expenses in safe, liquid assets. Who knows if or when I will return to work?
What else has changed since 2017? We are both three years closer to retirement, and I might be retired very soon, and not exactly on the timetable I anticipated.
A sizeable cash position still has some value. Yes, maybe it looks dumb to some, holding a lot of cash…until you really need it!