Should I Hold Less Cash?
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Welcome to the jail on money show. It's monday, november forth, and we are here trying to help you go into a different direction perhaps with your financial life. Maybe it's the exact same thing. Maybe you just want some ears and eyes on a situation, but mark, I are both certified financial planner, and that means that you might cause about something specific, but we actually are going to talk about some larger, constructive ways that you can approach your whole self and your whole financial life.

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Michael goodmen will be helping us answer your year and and tax loss harvesting questions. You can only join us if you are a member of jill on money live. Ha, got through that. okay. So I know it's a big week and we understand everyone's like on heightened anxiety levels.

We are going to do a plane old conversation with one of you today tomorrow will talk a little bit about just sort of a big picture economic stuff, uh, in honor of election day and then we're going right back into our format. Okay, because this is not a show. This is a show about you and your money.

today. We are talking to you on the line from new york. Hello, honey will welcome back yonne a recidivist appear on our program. So hi yonne.

What's on again? Very guys. You guys are uh just doing some great work out there. And I just my as my financial life has changed and evolved over the years, I wanted to run by some more questions with you.

great. Tell us what's up.

How old do you some i'm thirty four years old um and I am wondering if I am maybe being too cautious with my savings and if perhaps I should reallocate some my savings to uh my like taxi ble investments and I like leaving potential gains on the table is given you know my my long term life goals, you know investing in saving for the next thirty forty plus years.

I like the idea of am I cautious? It's right at my ally. I am one of those people who is probably too cautious so tell us a little bit a yourself so are you working full time?

I am working full time and I also do some part time work and some freeLance occasionally throughout the year. Just a supplement my income and take the edge off of having all my eggs and one .

employers basket. How much is your full time um salary? You're like base plus bonus.

Base plus bonus comes out to about one twenty.

okay. And are you making retirement contributions on that income?

Yes, I put in a five percent rough into a rough for one k and my employer top set up with eight percent.

喂喂喂， they put in automatically eight percent in traditional so yeah.

the employers contributions are a pretext dollars. But my contributions are are eligible for rough.

You're putting five percent into a rough. The employer is contributing eight percent and that you're on your one hundred twenty thousand dollars now you said you also have part time and freeLance income about how much is that on an annual basis?

On an annual basis that probably brings in a about thirty to thirty five grand and addiction.

And are you making any contributions on that income? You putting some money in a roth ray or doing anything else with that money?

Yeah, I max out a rough I R A, as well as contribute to a rough for three b because one of the the part time gigg is actually a teaching position at a local college.

Okay, great. So why don't we just go through some of the baLances you're current for one? K how much is in there?

That's about forty .

grand a great. And the rose four or three day that .

has about ten thousand .

and IT and the rough .

I R A that has about one twenty and IT.

Wow, that's good. And do you also have a broken account?

I do. And there's also a traditional I R A from a road I don't contribute to IT at this point that has another ten thousand .

and that I ve an idea about maybe had to consolidate that. Okay.

in the broken account has how much about one ww.

are you partnered, single, married? What what's your status .

engaged actually?

Oh exciting and um your fiaf ionised, do you guys combine your incomes and all of your financial lives or do you keep things separate?

Everything is completely separate.

okay. So we're not gona worry. I mean, just to know that you you're going to have I guess, of course, when you get married, what you have to understand is that you are bringing together finances. Do you think you'll be filing jointly?

I don't know about that. And I I should do more digging because my my dad is actually in a cps.

Oh, perfect. Well, good. He can help you out sometimes filing when you're married and you file as individuals while you're married. Sometimes it's really not great.

So I would if your dad is inclined to help out in this h endeavor, I think I might be worth IT IT might be Better for both of you to consider yourself married, filing jointly, then you would just be jointly filing for taxes. You can still keep your money separate. Do you guys live together right now? Where do you have separate um residences?

We officially have separate residences.

okay. And do you owner rent?

We own a two apartments, one each. And I go up and there are right next door to each other.

Oh my god, that's amazing. And are you gonna sell or are you gonna combine? What's onna happen here?

Well, um neither we are leaving IT as is very we use one as essentially for guests and as a station apartment, essentially in a spare kitchen and bathroom room as we need get very lucky with the set up.

And I mean.

we've looked around about potentially selling and you know upgrading, but I mean, the market in new york, it's just so insane we really IT will cost so much just in transactions alone that nothing we have found seems to make up going through that journey worth IT.

I feel like this is why like is the foundation of a great relationship to adjoining apartments, but they are separately maintain how much as each of those apartment's is worth.

Um so the one that I own is been a praised a few years ago at three sixty five. So it's gotta fish.

And what about is your mortgage IT?

There is there is a thirty year fixed at two and a half percent and there's about a hundred ninety five thousand left on IT.

Wow, that's great. And what about the second one?

The second one is a praise is probably it's smaller. I don't know where IT lands honestly and it's in my fiance is name, but he also has a thirty year on IT and it's at like three and a quarter or three point three, two, five I think well and he's he's got life one hundred grand on that mortgage for .

sure so if so maybe if it's worth can we is unfair to say it's probably worth around three .

hundred is play yes yeah .

I right and so there's no you're not onna rent IT you're just gonna hold these two as separate dwelling living in sort of bagging forth.

But but we're going to hold on to both of these yeah so so one of the .

things that you said when you came on the air was like, I think I have too much money saved. Do you also have like a savings checking baLance? That's that's a building up. But what what do you have an emergency reserves?

So I have about fifty five thousand between A, C, D and savings account, and there's another twenty thousand in those tips, uh, savings pods as inflation protective ones. And then I have another there's another forty thousand and a separate broken age account that's invested in two specific stocks uh one through uh that i've built up through an employ uh uh E S P P employers to plan and the other uh just a lucky chance I was able to participate in an IPO of a stock several years ago. And so i've just been holding on to that.

So those have big gains in them.

Yeah, the E S P, P, not so much just because I IT slowly accumulate and the stock hasn't. I mean, it's done well, which is is nice, but uh, the IPO did very well by comparison.

And do you have any losses sitting in the one hundred twenty thousand dollar brokers account by any chance?

You know, I don't know, but that something I could I guess I should .

look into only because if you want to try to reality and get your um get a little bit more of efficiency in all of your managed, you're rather than accounts you're managing that maybe we would reate take some losses, maybe takes some money off the table on those two stocks that I mean, not that it's the biggest deal you could leave them alone but if you if you felt like, oh my god today, I would never put forty thousand dollars into these two things then IT sometimes it's it's worth it's just to say, hey, do I have any losses that I buy some bonds at the wrong time? Did something not work out? And maybe maybe I mean, I know the markets done incredibly well this year, but you know there are some stuff sometimes it's legacy stuff that's floating around and you never know you might be able to take some losses against some of those gains real ate and you know you might be in a Better position going forward. Again, not necessary IT seems like you're in very good shape. You what is the amount of money that you spend? Um I mean, I know to you both, but like if i'm looking at like your contribution to the couple, what do you think IT is that you need in terms of expenses that we should .

keep in mind? I on average over the over the course of the last couple years probably spent around seven thousand a month for me and all my contributions. And could you know everything from splitting the girls to rebuild with my partner to, you know, the things that I buy just for myself?

okay. And that does not include saving. That's just straight up. Yeah, that's what you okay.

I got.

So what essentially your part time freeLance income is just on top of everything. I mean, you you know if you have one hundred twenty thousand dollars as a single guy, i'm with i'm sure you have this. You know you have I know your cap at your state and local taxes, you know because you are subject to that old rule, but you know you're basically your your top bracket is around twenty two percent.

And so that IT indicates to me that you are able to you know, after putting money into your retirement account, you're living on your take home pay from your full time job. And then that means that your part time france is like extra money, extra cash, but you're using that to save a lot of money. You've saved a ton of money.

You're in very good shape. Now that leads me to your question, which is, are you over saving? I don't know. You tell me how safe is your job?

Well, i've lost jobs in the past, so which is why i've cultivated the other revenue streams over the years because you know i've got come to feel like having one employer is the equivalent of having one client um and I can IT IT feels IT has felt safe. I've been here over three and a half years now. It's a very large uh, corporate environment that i've never been in before and it's quite massive. So IT feels secure. But I mean, who know I know the future as well as the next guy, right?

So look, I think that then i'm not gona tell you that you're over saving. I think you're doing a great job. I think you know essentially having seventy five grand in safe stuff, right? Your fifty five plus the twenty, i'm not including the the other you know the other broke account, but that's like a good amount of money.

Seventy five grand is probably where you should be IT really is because the world is weird. And I don't know if you look at maybe your uh your partners save money and you put IT together, they're probably good for six to twelve months. That's kind of really as much as I could expect.

IT a thirty four year old, but I also want to be clear about the the whole apartment thing that is like if the blanket, the fan. The other thing to consider is like if we make different choices, we have a lot of equity in our homes and and we could certainly sell one and we could, you know, make a different choices. But you seem to be in very good shape.

I just noticed one little a couple of things. One is the maybe we look at the two brokers accounts together and see if we can find tax loss harvesting. 第二 thing， as you said, um you have that traditional I R A that's .

still floating around. Yeah I held on to IT only because I often nervous about the tax bill that would come if I if .

I know there no no way to liquid IT, but you can move IT into your current traditional retirement account. I think you should find out from your employer if they will accept a traditional I ra asset to flow into your, you know, goods. I know you said your employers putting eight percent into a traditional maybe you could just combine that and say, hey, I have an old array account.

Can I roll IT into the traditional part of our four? O N, K. That's a question for your benefits people to see if they accept that.

interesting. I ever heard that before.

Yeah, it's just a way to consolidate some of the money that you have. And and then of course, I want you to make sure you talk your dad about the tax issue and maybe you're talk to your dad also about the idea of looking at whether or not there are some blockage account losses to take. And then the last thing I will say is that you know you and your partner are getting married. So I think um a little estate planning might be um a next up. Do you have any documents right now?

I do I need to get them notarized, but I also think it's time to revisit them given the change. And I think I was hoping to do IT with A A one fell loop with like a pre nuptial agreement as well.

And look at you a print up.

I know if that's a thing, like one one stop shop for people who are getting married to do their print up and their state talk.

Well, i'm going to tell you two thanks that my experiences, there are two different lawyers. The issue with a print up is that or do both of you agree that you should have a print up?

It's not a conversation if explored in depth, but it's rough. It's come up conversations around like, well, if something were to happen, I want to make sure that, oh, like my partner's mother is still alive and he definitely has expressed his wishes to make sure something what happened some of his money would go to her and I said, that's absolutely you know, we could just all have all we have to do is put IT in writing.

Yeah, I mean, that's for part of the estate. The pen up is a little bit different in that you would both need representation. My understanding of like real meta monier law is that if you're going to do IT, if there's a real in equity, both of you or each of you needs a lawyer to be able to go through the process.

You know you can talk about this within a state attorney who's doing your estate, but it's usually not the same person. IT is usually two different fut types of folks. Now maybe you find someone else who can do IT, but or maybe it's a very simple letter agreement, which says, whatever I come in with this mine, whatever you come in with this, yours, and you know, we will not go after anything.

Whatever you accumulate as a couple during the marriage is usually considered a marital asset. So IT IT is worth having a today if there is a real discrepancy between the two of you. Just think, jill, this whole thing goes to hell in a hand basket.

There going to be neighbors. Oh my god, that's the worst case scenario. But like you, but it's it's fascinating. It's a fascinating set up. So right? So you ve got to get a couple things done, talk to your dad, see how that goes and let us know because i'm interested to hear how that conversation goes and what you find out because you would that would be helpful for some of our listeners as well.

I would do if if yoni is I know the two brokers account is real one and the other one. With this forty thousand sitting in there, I would probably move that forty .

into the main one. Can you do that uni or is IT because of the is reason why is held separately?

Um it's held separately because they are these like two individual stocks and uh the burker account is with veterans and all that. And I haven't used IT to trade individual stocks. So i'm kind of just holding them separately because IT scratches my investor each to be an active trader because I like to trade the covered call options with them.

You're right. Well, no more than forty though. And if you spend whatever you free up from there, if you like, if you had some tax loss harvesting and you free up some, you take some of the gains on that account, uh, I want to pink iaea that you're gona throw that money into the main broken account, really like the supplemental retirement account to sense what the what the Better man account should. Okay.

for sure, I tried to target. I haven't my budget, my annual budgets or my monthly budget this target of putting like thirty three percent between like savings, retirement and general investing. And I guess what prompted the question was like, oh my savings right twelve a half percent i've reached like a good like nine months plus of um you know liquidity and emergency funds. Should I pair back on how much I ultimately put in and just increase how much I contribute to yeah I mean.

I think you can think about maybe uh maybe accelerating the contribution to a rough for a one k or increasing the amount of money put into your broken account. I think a more partial towards the rough part, but you do what you need to do. Don't go crazy with that.

The little scratching, the each of the managed stuff because I can become a larger part of your overall. So let's make sure you keep that in check and let us know how IT goes with the state planning and maybe a little metropolitan planning. So good luck to you muscle tub on your impending nutus.

If you have a big life event that is going on, give us a holler. Just good to drill on money that conflict the contact thus button. Let us know if you would like to come on the air by checking that box.

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Bank is going to be a very tense week. Change your work, change your wealth, change your life. Thank you for listening. We will talk you tomorrow.