See also priorities in stock trading

It is Perfectionist and unrealistic to make every dollar work hard for us. Many experienced investors (few are wise investors and even fewer are real “experts”) stay invested, having very small amount of idle/unproductive/unemployed cash, like 12x monthly expenses. See https://tanbinvest.dreamhosters.com/24728/12x-monthly-expenses/

For decades, I have lots of USD or SGD sitting in bank accounts earning below 0.5% pa. asset%allocation: imprecise snapshot=best shows my cash allocation at around 15%, much higher than equities. Used to be 50%. I have long accepted low return in exchange for “excess liquidity“.

I didn’t complain. I usually complain only when I lose capital or lose liquidity (as defined in liquidity[def]: how I gauge illiquid products) .

* memorable eg: I remember the professional analysis of AllianzIncomeProtector. The annualized return turned out to be very poor. (I think cpfLife may also show a low annualized return, despite the high DYOC.) I probably don’t mind that low return. However, I do mind the horrible liquidity[1].

* memorable eg: Buffett’s IBM “mistake” shows an embarrassing but positive return on this IBM investment. Not spectacular but no disaster either.

I think these are some of the key reasons I don’t see myself as an “aggressive investor”. So not every dollar (sometimes not even half the dollars) in my possession is working hard. When my cash “productivity rate” did hit 90% (i.e. 90% of my spare cash deployed into /productive/ assets), I sometimes had my fingers burned:

• In 2021 I deployed all my spare cash to FSM bond funds. About 80k is currently stuck.
• I had a 150k position in the supposedly safe Allianz HY fund. Stuck for years. I lost liquidity and lost capital, but in terms of e2etr [end-to-end total return], probably up to 1 to 5% loss only.
• I only invested about 40k with Jill, in contrast to 6-figure commitment of other investors. We lost capital.

— If I carry a 250k mtg at 2.5 ppa, but have 250k idle cash, then I would feel the pressure to make the idle cash more productive.

— Jolt: SBH in HDB.. why I can easily save 100k but won’t spend 100k on a new HDB? I wanted the 100k to be more productive, working harder to generate returns.

After Susan’s discussion, I feel 100k invested in a SlightlyBetterHome is different from “excess liquidity” mentioned above. This 100k will be non-productive for decades 🙁 In fact, part of it is cost (reno/fees), rather than investments. The rmSelf tends to neglect the xpSelf.

• Investments are the focus of the evaluative rmSelf;
• Those costs were incurred to provide experienced wellbeing of the xpSelf.