Note that this is debatable for CHF (low interest rate, no/negative Inflation).
And for places where it isn’t the case, you wouldn’t want to hold cash directly, but short term, liquid, and high quality debt (treasury, mmf, etc).
2 Likes
Plus debt/loans don’t come for free,
So I think the interest rates there need to be weighed against respective inflation.
3 Likes
I personally don’t believe that inflation really is that low but this is a topic for a different thread.
I don’t know what’s factored in the official inflation calculations, however I always believed that inflation is intangible in the bank account, and very tangible in the supermarket. With this crude metric I feel that inflation in CH is low. The only thing that’s gone up YoY is health insurance, other than that our bills have stayed pretty much the same, petrol has gone down, food costs are steady. In fact since 2024 or so we gave up going to DE/FR for shopping because the price difference had become marginal and not justifying the cost of driving from BL to Weil Am Rhein or Saint-Louis. If one lives in Volta or Dreiländereck in Basel then fine 
1 Like
I mean you’re saying the prices you pay for groceries in eurozone have increased, that still counts as inflation for you as a Swiss resident, no?
2 Likes
Yes, exactly.
Exactly that. Having at least the amount of debt that you hold cash. If you have a mortgage you are fine. The OP decided to exclude it, but that makes no sense. Debt is debt, no matter what the collateral is.
The value of money always goes down long term. Very small periods of deflation and very long periods of inflation with the risk of a hyperinflation.
1 Like
I think for Swiss investors , cash is akin to bonds. Are you saying 100% should be invested in equities or 100% should be invested in something ?
2 Likes
I don’t feel good unless I have at least a year’s expenses in cash. Rationally I think it’s probably excessive but at the same time I don’t think I could stomach a 100% equity portfolio when a bigger crash eventually comes so i justify it as part of the bond portion.
There are three things I don’t really know how to think about:
- Now that I’m on a C permit, I have a kind of one-way line of credit with the tax authorities. If I ever needed to accumulate more cash (because e.g. i lost my job and had a couple of months of severance) then I could just wait longer before paying taxes.
- As my portfolio grows, my “runway" gets supplemented by the dividends. At some point the dividends in a year will cover more months of expenses. So e.g. if you have 12.5x expenses then dividends cover approx 3 months. So you only need 9 months cash to have 1 year of runway. But on the other hand, losing my job may be correlated with a stock market crash so this couldn’t be relied upon
- The “bond” portion is supposed to be rebalanced into equities if there is a crash. But will I feel ok reducing my runway in such times? Maybe not
2 Likes
No.
Since (I believe) @Quack refers to the “runway” as tangible and eventual real cash flow to live off, what’s your personal and practical experience of living off dividends versus regularly, say monthly or quarterly, selling part of your portfolio?
I’m genuinely interested if you experience it as indeed the same experience.
2 Likes
Sorry, but I don’t understand this reply. It was an either-or question, so the answer ‘no’ doesn’t really make sense.
2 Likes
Cannot wrap my head around it, but I applaud you for being able to.
1 Like
OK, sorry: No and no. (The first question was “are you saying” and the answer is no, I did not say that and everybody can read what I said).
1 Like
I hold positive cash only on weekends, else highly leveraged debt daily
I would’t apologize; it was an impeccable propositional logic answer 
2 Likes