Question on what do to with cashflow

[Brandon Hershey]

Hello all,

Thank you in advance for your responses and help. I currently have 2 rental properties that cashflow right around $500/month each. Having that these both are going on almost of year of being rented out I have built up some good cashflow/reserves in my bank account.

I am fortunate enough to have a career that pays me well enough that I do not need any of the cashflow from my properties for anything. So, my intention is to continue to accrue the cashflow in case of a cap ex situation or a new purchase.

I am just wondering what people do with the excess cashflow/reserves. I know have over 5 figures built up and it seems like an absolute waste just leaving it in a bank account, getting under 1% interest. What are some places people like to keep their cashflow/reserves that gets decent interest rates and is liquid enough should I need to pull out?

Again, thank you in advance for your responses and help, it is much appreciated.

-Hershey

[Edward B.]

@Brandon Hershey,

As you probably know cash and cash-like vehicles simply do not return much. The only way to increase your return is to increase your risk, either by looking into more volatile investments or something that will lock up your money for a period of time (CD, Short term Bonds). If you have a good idea when you will need the money because you know what your CapEx expenditures should be and when you should incur them then you can accept some risk by investing in a CD or Bond ladder or something while keeping enough on hand for emergencies. You can squeeze a couple more percentage points out that way. It is indeed a balancing act. Sitting on the sidelines with a pile of money is nerve racking, but needing the money and not having it can be much worse.