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hypothetical regarding large sum of cash
Posted on 1/22/25 at 1:42 pm
Posted on 1/22/25 at 1:42 pm
Lets say you had $1 million sitting in a checking account. You are very risk adverse. Good chance you could need that money to fund payroll in your company with huge growth. Growth can happen in the blink of an eye as the company is staffing.
What would you do with that $1 million? There is a chance that receivables stay in check and even with growth, you don't need to touch that money.
Texas Capital Bank is offering 4.5% up to a million. That number could go down, but it's a start.
Don't take into consideration kids, college, retirement, etc. This is $1 million that is sitting doing nothing, but could potentially be needed in say a two week period.
Thanks for the advice...
What would you do with that $1 million? There is a chance that receivables stay in check and even with growth, you don't need to touch that money.
Texas Capital Bank is offering 4.5% up to a million. That number could go down, but it's a start.
Don't take into consideration kids, college, retirement, etc. This is $1 million that is sitting doing nothing, but could potentially be needed in say a two week period.
Thanks for the advice...
7
Posted on 1/22/25 at 2:13 pm to JoseVargasTX
You needed a thread on the MT just to agree with your own idea of putting it in a money market?
Posted on 1/22/25 at 2:22 pm to JoseVargasTX
Treasury bonds, CDs, or hell, just throw it in a HYSA. The returns on these are not negligible and they're as guaranteed as anything you're going to find. Anyone with extreme risk aversion really shouldn't be doing anything else.
Posted on 1/22/25 at 2:38 pm to JoseVargasTX
Hello, my friend. Glad to see that your business is doing well. 
Posted on 1/22/25 at 2:54 pm to JoseVargasTX
quote:
Lets say you had $1 million sitting in a checking account. You are very risk adverse.
Isn’t there some risk by having that much in one account?
Posted on 1/22/25 at 2:55 pm to JoseVargasTX
You need $1 million to fund a 2 week pay period? You have $26 million yearly payroll?
As a small business owner to another, get a revolving line of credit with a bank for payroll shortage months. Money never flows in evenly, so sometimes you need to make payroll while you wait for the checks to come in. When they do, pay down the line of credit and worse case dip into your $1 million.
You can do better than 4.5% returns on $1 million, so invest it matching your risk tolerance.
As a small business owner to another, get a revolving line of credit with a bank for payroll shortage months. Money never flows in evenly, so sometimes you need to make payroll while you wait for the checks to come in. When they do, pay down the line of credit and worse case dip into your $1 million.
You can do better than 4.5% returns on $1 million, so invest it matching your risk tolerance.
Posted on 1/22/25 at 3:46 pm to JoseVargasTX
quote:
Texas Capital Bank is offering 4.5% up to a million.
If nothing else this is where I start while I evaluate options.
Posted on 1/22/25 at 3:46 pm to GeauxTigers123
quote:
Isn’t there some risk by having that much in one account?
FDIC only insures up to $250k per account. That is your risk.
Posted on 1/22/25 at 5:03 pm to JoseVargasTX
HYSA, plus check the rate on 4 week TBills (about 4.24% now) and consider putting a chunk in those.
No state income tax on the interest, and you can take the cash or reinvest each month.
No state income tax on the interest, and you can take the cash or reinvest each month.
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