If You’ve Been Stockpiling Cash—You’re Not Alone. Here’s What You Need To Do Next.

The market has been breaking records, and you have been sitting on a ton of cash. It might be hard to admit if you missed out on some of these opportunities. Don’t worry—you’re not alone. More often than not, potential clients are coming to us with significant cash, hundreds of thousands or even millions.

“We have all this cash and we are just doing nothing.”

If this sounds like you, you’re in good company. In spending time with these couples, I have found three major reasons why this cash isn’t being put to work.

1. Too busy

Many people have trouble finding time to invest their cash. They’re either too busy earning money—or enjoying spending it.

2. Fear of the Market

The stock and bond markets are unpredictable, so how do you know if you’re putting your money into an overheated stock market? Can you even trust bonds if the bond bubble might pop?

3. Distrust of brokers

Some people might not want to give cash to a broker simply because they don’t want to pay the commission or maintenance fees. But for many there is another concern— how do you know you can trust your broker to make the right decision when it comes to your next investment? Add all those factors up and you’re left with a kind of paralysis. You know that you want to earn more than you do while parking your cash in a bank account, but you just don’t have the time, the expertise, or the appetite for risk to go stock-picking for yourself.

What do I do with all of this cash?

If you’re tired of wondering what to do with your stockpile of cash, consider the following three-part plan:

1. At a minimum—commit yourself to getting a higher yield on your safe money. A six-month Treasury Bill is yielding 1.6% (as of February 2018) and, as a bonus, its interest income is also exempt from state taxes. Another option could be shifting your cash into CDs, which are beginning to pay attractive yields once again. Or even consider a short-term bond fund like those at Fidelity or Vanguard.
2. Start developing a plan to deploy some of the dollars. You could even set up a plan that works on auto-pilot, where a portion of your safe dollars are invested over the next few years to help you avoid the shock of moving everything at once.
3. Remember that investing your money isn’t binary: there are plenty of options in between safe cash and risky stocks to help make sure your money is working hard for you. High Yield bonds aren’t considered safe bonds, but often have risk somewhere in between cash and stocks.

The point is that you can do something today to make your money work harder for you without exposing you to unnecessary risk. So what are you waiting for?