Percentage of cash Vs investment

Hi, what is considered a good spread of your savings between cash accounts and investments. Say after mortgage etc if I can save 1K per month, how much of it, if any should I put into cash accounts and how much in investment. I already have 3-4 months of expenditure in cash for rainy days. Would be good to hear people’s views. Thanks

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Depends on your situation, do you have enough to live on if your car blew up, of you needed major vet bills or your house got flooded…etc etc.

It all depends on your current situation, how much can you live off if everything went to shit. You figure that out, then you can decide how much to put into investments.

I don’t have a percentage figure. I decided on how much in cash I needed in an emergency (like your rainy day fund), and then invest everything else.

It’s obviously going to hurt me more if there’s a pull back. People with cash (Buffett) will be able to use that opportunity to buy a lot, but are missing out right now.

I personally would only hoard cash if I was saving for something or won the lottery. Hopefully tonight hahaha

Edit: forgot to say there’s a 5 minute video interview with Dalio in Davos in the article. Dalio in Davos sounds like a movie.

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Thanks for the replies. Before I entered investing I saved some money into cash ISAs. I think looking what others do might be worth converting them into S&S ISA.

You’ve got 3 months until the new tax year when you can open a new ISA.

You may not need a S&S ISA to begin with, as there is a £12k capital gains allowance and a £2k dividend allowance.

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Agreed. But as I understand you can transfer previous years cash ISA into S&S ISA without any effect on current year ISA allowances.

I basically saved up a rainy day fund of 6 month expenses and now I only replace what I take from the cash savings (which has been nothing this year.).

Everything else goes into the Shares ISA.

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I am still a novel investor so I am not comfortable having more than 10-20% of my total capital invested.

However my situation is a bit different. I don’t have a fixed income (steady full-time job)and I am still a student.

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Whatever you decide you must be comfortable with it Alessio. As your confidence grows you can always adjust you cash-investment ratio.


Exactly. I believe depends on your circumstances a lot. In my case confidence levels are influenced both by experience and by the lack a secure income stream of £.

My plan is to increase little by little the invested money ratio but before I need a solid source of income.

I have learnt a lot from when I started (July) and very eager to understand more.

The learning never stops my friend!

My rule is 5 months salary plus money I will need in the next 1-2 years in a savings account, everything else I can save after that goes into investments

Question for those holding emergency cash if the S&P 500 crashes like in ‘08 would that emergency cash become investable. Serious question not having a stab at anyone. 6 months emergency is a great rule to have, that I need to implement. Seen it on the UKfinance flowchart on reddit

Whilst tempting, I would caution against doing that. Don’t forget that an 08 level of crash would likely include recession and job losses so you’d have to be very confident of your own employment and not having to take a pay cut in the first instance.

If you sunk your emergency fund, it went on to lose 30% because you hadn’t timed the bottom of the market and then you lost your job because your company went bankrupt you’d be in a very sticky situation

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In my case, it is for ONLY for emergencies. In the case of a recession, the main concerns should not be the price of the holdings crashing but losing your job, which is when the cash is needed.
If I use any of those savings, then I go back to only depositing in my savings account until I have rebuilt the safety net.
I do have ~8% of my total in investing accounts as cash which I will be investing in case of a market crash.


So mine would be €18k and I would probably put 8 in were it to happen. I’m a great saver (over 40% of net) and I would be on emergency mode from then

No kids no wife. And Portugal wouldn’t even require that although I’d hold that as it would be over my Irish expenses were something to happen.

@DavidM spot on. I only can speak of MY current situation things could change and need it more and I wouldn’t invest it. Right now at this time, with my fictional share I would invest the 8k.