Beneficiaries and CASH!!!

I recently read an article describing an ongoing civil suit between the siblings and an ex-girlfriend of a deceased gentlemen. The reason was that in 1987 he opened an IRA and at that time had written his then girlfriend as the sole beneficiary to the account. In 1989 the two parted ways and never looked back. Fast forward to 2024 and the court is having to decide if the siblings have the right to the funds that total more than one million dollars! DO NOT let this be you! This could have been fixed if the owner of the IRA would have simply updated his listed beneficiaries to his siblings at any point in 35 years.

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Those of you that know me, know that I am a big fan of Dave Ramsey, in fact you will probably get one of his quotes in each of these Financial Planning documents I send out each quarter. And here is today’s. “CASH IS KING”. Sure! But is there ever a place that this isn’t true? Well yeah, and here are some arguments for both sides.

-          Day to day living, yes, I am a believer that in the world today we can still carry cash to various establishments, and it make sense. As I stated in the Q1 FP footer, restaurants are passing the card fee they are charged from major companies (3-5%) to the customer so if you pay with cash, you can save a little here and gain a lot over time.

-          IRA account, no…well some. I try to keep a portion for each client in their account for multiple reasons. Like when the market dips and we have enough cash to jump in a contract that will pay dividends down the road…literally. But with the current interest rates being what they are, we can and do put a larger portion of the cash not being invested into a money market so that even as it sits idle, we can take advantage and get into a good return. This wouldn’t be the case between 2011 and 2022 where money markets were paying very little. And this could come back to be the case at any time but for 2024 it makes sense to carry our cash this way. Outside of this small portion of every account, I would rather be invested and not missing potential gains than to stay in cash. That’s the tradeoff!

The point is that in small quantities it makes sense to keep some cash ready and available. But with investing, it makes sense to do just that, invest!

Until next time, keep swinging and never stop chasing.