chicken money — how much?
Hi Terry,
I appreciate getting your columns/emails. Re: chicken money…I have read your thoughts on this concept, and still might not be clear….are you talking about available cash in the bank, i.e. checking and money market accounts, accessible money, and how much?…..or money in some other vehicle that can be liquidated quickly? Again, how much?
Thanks.
Terry Says
We are talking about money that is liquid, easily accessible, and does not lose value because of market moves (only over the longer run because of inflation). That includes short term (one year or less) CDs at banks, money market deposit accounts, money market mutual funds (especially those that only purchase U.S. Treasury securities) Treasury Bills (read this article about how to buy T-bills, though it was written when rates were higher).
The question of “how much” is up to you — depends on your risk tolerance, spending needs, time horizon, ability to sleep at night with other risky assets. I think at this point it should include a minimum of one year’s expenses, preferably two years. But that’s for me!
