Your cash strategy should consist of three tiers, with each one having a specific objective:
Tier I: Immediate
Objective: Meets your immediate needs to pay bills and serve as your emergency cash fund.
Products to use: Focus on bank deposits and money market funds
Tier II: Enhanced Cash
Objective: Enhance returns to cash while maintaining liquidity
Products to use: Low duration bonds
Tier III: Return Driver
Objective: Grow cash balance over time
Products to use: Core bonds or actively managed bond funds
The allocation between each of these tiers will depend on several factors – including risk tolerance, goals and spending patterns.
We can help to analyze how much you need for each tier based on your needs. Contact us today if you’re interested in making your cash work harder.