Cash reserves - How to maximize?

1 Reply

My question is how are you getting the most out of your cash reserves?

I am talking about your operating funds including your short term rainy day fund like a broken A/C system.  Specifically, I am talking about liquid cash reserves to deal with short and medium term issues that come up day to day.  In my case, I feel comfortable with $25K in reserves for my real estate and personal emergencies.

Please do not tell me to invest in another property, stocks, and other non-liquid assets.

I may be over thinking a low yield issue but it pains me that I am only getting 1.5% on my cash in the bank.

Any ideas or perspective on this would be appreciated.

Operating funds are separate from cash reserves.

Operating funds = Checking Account

Cash Reserves = Savings Account or Money Market Account

My reserves are in a revolving account - property tax reserve for each property gets paid out/trued up twice per year (when I make the payment. Repair reserve gets paid out when I need to make repairs. Capex reserve gets paid out when I need to replace capital items. Legal reserve gets paid out when I have legal fees due to evictions, etc. The list goes on. If you plan to pay out the cash (or if there is a risk of having to pay out the cash) within a year, then this is where that money should go.

My "operating cash" relates to pure overhead.  This is where cash that isn't reserved settles.  Payments go to credit accounts, bank fees, insurance fees, paying myself, new projects, etc., etc.

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