Quote:
Originally Posted by lewdog
I’ve actually kind of done this over the past few years anyway without really thinking about it. I’ve had people tell me, just put it all together so it’s easy to track! Bitch, that’s what spreadsheets are for!
I have our investments spread between Vanguard, T Rowe Price and TD Ameritrade. Our liquid cash is between US Bank and Chase.
Thanks for your info on this.
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Obviously, Vanguard isn’t a bank. So there’s no FDIC protection. But if you have it in the Vanguard money fund, it’s as safe as anything on planet earth. No need to spread it beyond that. Any cash you need for regular outlays keep in your bank but the rest of the cash you want to preserve should go to the Vanguards of the world.
I can understand people being lazy about this in a world of zero rates. Then a bank or a money market fund were all the same thing. But now most banks are still paying maybe 1-2pct (though other banks are trying to attract deposits and paying more) while money funds are paying levels approaching 5pct.
So the 1-2pct option is basically a loan to a bank where the 5pct option is a loan to the government. You receive a much better return on the latter and have significantly less risk (if you want to bring up the debt ceiling, we can discuss, but that’s a longer conversation and doesn’t remotely change this conclusion).
These Silicon Valley idiots were exceptionally lazy and careless in their cash management. And that allowed SVB to operate as it did until it couldn’t.