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How much cash am I holding?

Thursday, April 25, 2024

I have been asked this question in various forms by various people over the years.

"How much cash are you holding now?"

However, like how I have always sidestepped questions regarding my net worth and the size of my investment portfolio, I have habitually sidestepped the question.

I have published a blog post in the past to explain why.


My investment philosophy or my investment portfolio?

So, this blog post is going to be the first time since I started blogging in 2009 where I share some specific numbers.

Why the change of heart?

This is because of what someone told me not too long ago.

It would help readers have some kind of yardstick for themselves in their decision making process.

I am always mindful of the fact that all our circumstances are different.

So, there is nothing sacrosanct about what I am about to reveal.

We do what our circumstances allow.

Of course, we could push ourselves to do more and we should but how much to push, that depends on our threshold for pain.

1. War Chest

I have said again and again that is it important to have a war chest.

When opportunity knocks, we want to have the resources to take advantage of the opportunity.

For me, such an opportunity usually takes the form of market pessimism.

Like Buffett said before, be greedy when others are fearful.

It is harder to do well when everyone is feeling optimistic and chasing prices higher.

Then, how much should we have in our war chest?

I get asked this so often.

There really is no magic number or percentage.

It depends on Mr. Market.

When Mr. Market is feeling optimistic, my war chest continues to grow in size.

When Mr. Market feels pessimistic, my war chest could be totally empty.

During the Global Financial Crisis, I emptied my war chest and I have blogged about this before.

What about now?

At the moment, I have about $200K in my war chest.

As I do not have a lavish lifestyle and because my passive income exceeds my expenses, this sum is likely to grow.

The money is stored stored in my T-bill ladder.


So, how to grow our war chest? 

Basically, just spend less than we make, either actively or passively.

Want to grow it faster?

Become a better saver.

2. Emergency Fund

Of course, when we talk about cash on hand, we have to talk about emergency fund.

How much do I have in my emergency fund now?

About $250K.

This amount has stayed the same for a while now.

It gets adjusted upwards from time to time to account for inflation and other changes in life.

An emergency fund is important because if all else fails, we have near money we can rely on.

The last time I made an adjustment to my emergency fund was when I decided that I needed $48,000 a year myself and I should give my parents $48,000 a year too, directly or indirectly.

That's a total of about $100,000 in expenses.

I like to keep an emergency fund that would cover at least 24 months of expenses.

So, I have overcompensated. 

The good thing is that I have a good size safety net and I wouldn't have to tinker with it for many years to come.

Passive income and updating my budget.

At this point, I must say that it is important to build a meaningful emergency fund first before ever investing any money in risk assets which includes stocks and properties.

I made a related video on this topic:

Of course, while building an emergency fund, our war chest would go hungry but only in the meantime.

If you are wondering how large your emergency fund should be, you might want to eavesdrop on AK here:

How large should an emergency fund be?

Where do I store my emergency fund?

In fixed deposits.

This is because fixed deposits pay higher interest and they are easier to break than T-bills.

At the moment, $100K of my emergency fund is in the UOB ONE Account because that is really near money and makes 5% p.a.

Of course, come 1 May, I would have to try and bump this number up to $150K as UOB ONE would be cutting the maximum interest rate to 4% p.a. on the first $150K.

3. Float

What is a float.

Well, it is just money floating in my savings accounts which I can use on a daily basis.

I try to have about $20,000 floating at any one time.

This is not because I need all the money on a daily basis but really because I am just mental.

There is no rational reason for this apart from the fact that I feel safe having at least this much which I can use to pay anyone or for anything while leaving my emergency fund intact.

Any excess money, I should be using to strengthen my T-bill ladder.

However, by now, it is obvious that AK cares more about having peace of mind and feeling comfortable than maximizing returns.

Like I always say, I am fine being approximately right.

What I want to avoid is being absolutely wrong.

My float is currently closer to $50,000 than $20,000.

Bad AK! Bad AK!

4. CPF

I know some will remind me about my CPF savings which is, of course, pretty substantial.

$1.1m in CPF savings.

Most of the money in my CPF account will become cash when I turn 55 in another couple of years.

That would be when my CPF account becomes a savings account because I would be able to withdraw the money whenever I want.

I can see my war chest becoming much larger because of this.

Of course, I could also continue to treat my CPF savings as the bond component of my portfolio which can be used to invest in other risk free and volatility free instruments like T-bills.

Thus, the bond component of my investment portfolio would remain intact.

I will decide what to do when the time comes.

OK, I am feeling a bit breathless now.

Time to stop talking to myself.

So, how much cash am I holding?

If AK can do it, so can you!


Small steps said...

Hi AK,

Thank you for all your honest sharing. I have benefitted much from you and also learning from you.

You have been an inspiration for me and i have always quoted you in front of my colleagues as a good role model ! Just wanted to say thank you !

Yv said...


Thanks for sharing, it's really helpful to us not as a goal to reach towards to, but more of making sense of your thought process and what to look out for in our own cash management.

On a separate note, OCBC share price has finally broke past the $14 mark.

fisher said...

Thank you AK for so generously sharing with us such personal information. Was really inspired by you on CPF and hopefully i can be a full time gamer like you in time to come!

小草 said...

Hi AK, I am curious.

How did you manage to charge $500 monthly to enjoy the benefits of ONE Account?

Would like to understand what items do you charge as I have difficulty charging $500 monthly. Thank you.

Siew Mun said...

I am 59. I am holding $680k cash in form of SSB and T-Bills as a warchest

AK71 said...

Hi Small steps,

Thank you for showing appreciation. :D

I like your nickname.

Taking small steps towards financial freedom is better than not taking any at all. :)

AK71 said...

Hi Yv,

I am glad you think this blog is helpful. :D

I was afraid that some might look at this the wrong way but the feedback has been very positive so far. :)

OCBC huat ah!!!

AK71 said...

Hi fisher,

Yes, this is very personal and the main reason why I have always sidestepped questions regarding this.

However, just like sharing my CPF numbers, I am more willing to do it because I am blogging anonymously.

Of course, I must also be convinced that it would really be helpful to readers or people might think that I am just showing off.

I am glad you are inspired! :D

While waiting to be a full time gamer, you can join me in World of Warships whenever you feel like trying a fun and free to play game.
My link:
We can both F.I.R.E. at some enemy warships! ;p

AK71 said...

Hi 小草,

I use the UOB ONE card to pay for utilities, supermarket visits, polyclinic visits, online purchases, diesel for my car, phone bill and if I should need more to hit $500, I buy NTUC Fairprice vouchers which I give to my family. ;)

AK71 said...

Hi Siew Mun,

Thanks for sharing! :D

The thing about SSB is that we don't get the money right away upon redemption.

So, I use that more as a replacement for voluntary contributions to my CPF account.

Of course, I have a T-bill ladder which functions as my war chest.

Still, as long as we are comfortable with our strategy, knowing how it works, it is all good. :D

Yv said...


I also use the NTUC vouchers hack too to at times when I cannot hit $500

AK71 said...

Hi Yv,

Hack and slash!

It is a game mode. ;p

Thomas Chen said...

Dear AK,

I’m your avid reader and have learnt much from you on your stocks investment philosophy and how to beef up our CPF returns through allocations and cash top-ups.

For readers like myself where we need to juggle between finding a good company to invest and our full time job, we are very interested to know when you were in a similar situation many years ago, how did you juggle? Would be great if you can have a post that shares with us on your past experiences:

1) When you were juggling between investment and a full time job, what was the slightly more effective and efficient way of searching for investment ideas that gives you a higher probability of eventually investing in the company?

2) How has the subsectors you chose to invest evolve from your early days till now? Similarly how has the diversification of your portfolio and time horizon of your portfolio evovle over time?

3) For crisis such as Global Financial Crisis (GFC), what experiences and years of learning prepared you with when faced with the GFC? Eg. if you experience GFC in the first 5 years of investing, would you have reacted differently?

4) What myth about succeeding in investing do you think is most damaging?

Sincerly yours,
Thomas Chen

Learner said...

Hi AK,

Kamsiah you plenty plenty for so generously sharing with us your info. It inspired me that rags to riches is not a pipe dream but something that can be possibly achieved. :D

DL said...

hi AK,
Can you please talk to yourself about IREIT's latest result?
Lower DPU due to CAPEX?

DesperateFI said...

Hi AK, thanks for sharing. I have been following you for many years! How about your car when COE reaches 10 years? We are a family with young and old and to buy a car now would have set us back by a lot.

AK71 said...

Hi Thomas,

Welcome to ASSI. :)

You will find answers to your questions in my blog by reading past blogs. ;p

I didn't start out as a purist investor for income but I realized later on that if I were investing, having dividends help.

So, this explains why ST Engineering was one of my earliest investments and it still remains in my portfolio today.

As for portfolio changing over time, during the GFC, I went in big on REITs and their share of my portfolio has gone from 90% or so to less than 40% today.

Banks form almost 40% of my portfolio today.

As for preparing for crisis, it is quite simple.

We must always have a war chest ready.

Last question is the most difficult.

I have called out scams and false advertising in my blog over the years.

So, if I must provide an answer, I will say it is probably "everyone can getting rich quick."

The truth is some might benefit from get rich quick schemes but most would not.

You might be interested in this blog post:
AK the investor.

AK71 said...

Hi Learner,

I am glad you are inspired. :)

I don't know you if you have read this:
Is AK a rags to riches story?

AK71 said...

Hi DL,

IREIT retains 10% of distributable income to cover CAPEX etc.

Since this has not changed for some time now, the lower DPU is probably due to lower rental collection and unfavorable exchange rate from EURO to S$.

I don't know if you have watched this video I produced on how DPU could decline substantially next year:
This REIT is a "MUST BUY" but only at a 9% distribution yield. When might that be?

AK71 said...

Hi DesperateFI,

If you don't yet own a car, the best thing is probably not to buy one. ;p

For me, a friend has indicated his interest in buying my car because it has very low mileage of only 60,000 km although it is 8 years old.

So, if he comes knocking on my door with the money, I would sell.

If we must buy a car for some reason in Singapore today, buying a pre-owned car that has been well maintained makes better sense.

You might be interested in this blog:
3 good reasons to buy a car.

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