Where do you park money if you want to stay liquid?

Johnny Cashflow's picture
Rank: King Kong | 1,176

Looking where to put a meaningful amount of money to earn return without losing principal. I need to stay liquid though in case there is a capital call for a business to purchase.

Any suggestions?

Comments (41)

Funniest
  • Associate 2 in CorpDev
Nov 25, 2019

PM me son, I'll keep it safe for ya

    • 10
    • 3
Nov 26, 2019

You used an anonymous account champ

    • 1
Nov 26, 2019

He's a Nigerian prince. Just didn't want to tip his hat. Don't worry, the money is safe with him, esp if sent via BTC or Monero.

    • 1
Most Helpful
Nov 25, 2019

if you don't want to lose principal, stick to something with a guarantee, like T Bills, CDs, and so on. everything else has some risk to it

Nov 25, 2019

That and some online checking accounts that offer +/- 2% yield annually. Ally Bank or similar, just make sure they're FDIC insured.

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

    • 1
Nov 29, 2019

Goldman was offering 2% on it's checking account until a while ago, and I know that Robinhood was planning a 3% growth checking account (but I'm pretty sure the government stopped them for some nonsense reason).

Nov 26, 2019

CDs are not liquid there may be penalties to early withdrawals. T-bills are a good example and money market accounts.

Nov 26, 2019

you can get short term CDs bro, just like t bills, they're not all multi year.

ergo, liquidity (not same day like mmkt, but close)

Nov 25, 2019

Bond ladders/T-bill ladders, etc...

Nov 25, 2019

MINT, FLOT, and others are some short-term (<1yr) bond ETFs that will get you 2.5-3% yield with minimal principal risk

    • 2
Nov 27, 2019

ETFs are of interest. But 3% is pretty low. Got anything with a bit more juice?

    • 1
Nov 29, 2019

Those two I recommended have virtually no principal risk given the duration. Basically higher-yielding to other cash alternatives like CDs.

SRLN and BKLN are Senior Loan ETFs that yield 5%+ but you are taking some principal risk there.

Nov 25, 2019

Rolex laugh

What concert costs 45 cents? 50 Cent feat. Nickelback.

    • 2
Nov 26, 2019

There are some decent treasury mutual funds, I use MSLIF from Morgan Stanley. Think I'm getting 1.7% at the moment, same day liquidity.

I use it as my savings account effectively. I don't keep much in the bank beyond expenses + small cushion.

    • 1
Nov 26, 2019

IDK I don't have any monies.

Nov 26, 2019

Stable Value fund

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.

    • 1
Nov 26, 2019

Marcus by Goldman Sachs offering 1.7% on money market accounts

Nov 26, 2019

A few questions, define the timeline on liquid, define the capital draw requirements, define the likelihood of capital call and return targets.

I would argue if the capital pool is large enough and the draw requirements are only a fraction of the necessary capital needs that real estate would be the best bet. You can always borrow against the asset(s) to "quickly" raise capital for other needs, the return profile will blow the other suggestions out of the water and it is a real cash generating asset. The rest of this stuff won't even top inflation.

Has some downside risk but I would aruge that in the short run it is very low and only a risk before you extract capital out of the asset.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Nov 26, 2019

Oil stocks for dividends and extreme liquidity.

Array

Dec 2, 2019

lol

Jan 29, 2020

I have a short on oil majors for this exact reason. It is inevitable that they will have to reduce or eliminate dividends as they are all pretty much hemorrhaging cash. When this happens, the stocks will continue to slide.

Nov 26, 2019

A basket of low-correlation equities that you add to slowly over time when your savings come in. Diversify away from that with some real estate.

Nov 27, 2019

collect fine spirits
keep your money LIQUID
for the SAKE of ROI don't drink it though

    • 2
Nov 27, 2019

or you will get POUNDED IN THE ASS amiright?

Nov 27, 2019

clearly not your first day on WSO ;)

    • 1
Nov 27, 2019

~BiTcOiN~

    • 1
Nov 27, 2019

Hole on the side of I-80 in Nevada

Nov 27, 2019

Precious metals such as Gold,Silver,Platinum, or Palladium. If you have serious money, you get IF diamonds. The market of precious metals is very liquid, someone will definitely buy what you are selling, but it may take some time.

"It's okay, I'll see you on the other side"

Nov 27, 2019

sauce me youre western union user name and password, ill keep it safer than safe in Turkmenistan.

Array
Nov 29, 2019

Switzerland

Array

Nov 29, 2019

Liquidity and risk tolerance are two very different things. The market is liquid but has risk. How much risk are you willing to mix with liquidity?

The thing about total liquidity is, after 30 yrs of PWM, I rarely see clients who actually use the liquidity. They just keep their money liquid but lose opportunity. How much do you really need liquid? Different answers if you're looking to stroke a down payment on a house vs. just keep liquid for a rainy day.

    • 1
Nov 29, 2019

noteworthy and insightful comment. What do you typically advise your PWM clients instead?

Nov 30, 2019

Depends on their goals. If they truly need $X liquid short term, cash (typical bank products). If they want upside growth potential with liquidity (no plans to use it but just want it available) there are all kinds of market products, managed acocunts, ETFs, UITs, Preferred stocks, etc. As long as they can earn more than bank products net of fees they're good to go. Again, if they need it available for a specific X, I'd keep it out of harms way but lots of folks just have nonqualified accounts sitting liquid forever. You're not going to put all that in low growth instruments for 10 yrs.

    • 1
Nov 29, 2019

I've been signing up for checking and saving accounts for the sigh up bonus and move money as soon as I get the reward. Great for up to $15,000, or just divide up the amount into different accounts

Nov 29, 2019

which checking accounts?

Dec 9, 2019
Comment