SERIES: Top 5 Ways To Improve ROI – Part 3

Welcome to the latest series on this wildly popular website – – “Top 5 Ways To Improve ROI”

ROI: Return On Investment

Everyone wants to receive a positive return on their investment.  We are delaying the use of our money so that we can have more money in the future – at least that is the goal.  However, many people are seeing negative ROI over the past several years.  This is why I am writing this series – to help each of you make your money earn more.  These are the top five rules I use to maximize my money, and it has worked out well for me.

Part 3  Maintain substantial margin in cash

If I do not maintain liquidity, it becomes very difficult for me to maintain rules One and Two.  Without financial margin, I am more likely to be “jumpy” and leap out of investments when they trend downward.

Having substantial cash on hand also allows me to take advantage of tremendous opportunities – many of them may be “once-in-a-lifetime” opportunities that will require cash money right away.  If all of my money is tied up in investments (or all of my money is gone), then I am not able to take advantage of these great investments.

For me, it is helpful to keep 10 to 15-percent of my money in cash or cash equivalents.  I hold a lot of my savings in on-line FDIC-insured savings accounts that pay interest equivalent to a two year CD, but do not have the liquidity issues that CDs have.  I really like Capital One 360 – it’s my favorite!

What % of YOUR investment money do you like to keep in cash or cash equivalents?


Read the entire series (available after 12/19/2011)

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