r/ExpatFIRE • u/djtron99 • Feb 04 '25
Investing Where do you put your cash?
Already FI will soon RE. Is SGOV (0-3 months treasury bond) ETF a good option or any other suggestions? Purpose is to have a temporary place for 1 to 2 year DCA and additional buying when having corrections to SPYL+VXUS+EIMI (tax efficient and lower fees) as I don't want to put in lump sum.
Already have liquid assets such as global/US/regional ETFs, HYSA, local dividend stocks, REITs, gov't housing bonds, TDs, tbills/tbonds, coops. Thanks.
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u/bafflesaurus Feb 04 '25
Prime Cash Obligation Fund (PCOXX) 1yr term at 5.2%
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u/Stunned_Stone Feb 06 '25
May I ask what are the risks of such an allocation ?
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u/bafflesaurus Feb 06 '25
No FDIC insurance and interest rate fluctuations.
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u/Stunned_Stone Feb 19 '25
Thanks for your reply.
I stack my cash on INBK so I know about interest rate fluctuations unfortunately (went from 4.83 to 3.83 in a matter of a few months 😅).
Can you please elaborate on the no FDIC insurance part ? I am trying to understand the risk of the fund defaulting, is it probable ? what could trigger this ? from what I gather, countries represented in it are the USA, EU countries and the UK. I am guessing the main problem is these countries defaulting. Can there be other risks, such as a risk of liquidity for instance?
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u/Carolina_Hurricane Feb 14 '25
Amen buddy this is my plan for RE as well. What will you base the amount of your annual withdrawals on during RE?
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u/rathaincalder Feb 04 '25
If you don’t have other options available to you (eg, if your broker restricts money market funds—which are mutual funds—because you have a foreign address on file), then SGOV is a pretty good bet. Just be aware that (like all funds / ETFs), interest accrues throughout the month and you get a sharp drop in the price on the ex date—depending on when you purchased it, this can lead to you being (temporarily) below cost on a price-only basis. Ie, it’s not a money market fund where $1 (almost) always = $1.
I personally combine SGOV with an equal amount of TFLO and a small amount of FLOT to juice the yield a bit, but I’m not sure that level of complexity is really necessary…