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 Post subject: Eagle Soaring Higher
PostPosted: Thu May 17, 2012 1:25 pm 
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Joined: Thu May 17, 2012 10:05 am
Posts: 1114
Brief Intro: I am married to the most beautiful, fun, godly woman I know. We've been married about two years and a half now. We are both in our late 20's. We have one kid on the way and we’re so excited!



We took Dave Ramsey’s course in 2009 and then again in 2010. We got on a “budget” in January of 2010. But it wasn’t until the summer of 2011 that we really began watching every penny, seriously cutting expenses, and saving for the future. This was about the time we decided to expand our little family. J



In the summer of 2011 (Sorry I mistakingly typed 2010) we paid off our last debt - our car - and became debt free! We have been fortunate to pay as we go on our schooling. I have an undergrad in business and a MBA. My wife should be finished with her undergrad by the end of the year. We have money saved up to pay cash for the remainder of her education.



Currently we are working on building up our savings and looking into further diversifying our investments. The reason for joining this community at GRS is to better understand investments and make our money work harder. We have a net worth of about 100k. We are able to save about $1000 above and beyond my 401k per month. There are 8 months left in the year so we should be able to save about $8000 more in 2012.



The outline for the rest of 2012 looks like this:



1) Increase 401k Fund to 29K by end of 2012. (Currently $25103.34/$29,000)

2) Continue to grow E-fund to 9.5k by end of 2012. (Currently $6872/$10,000 or 68.72%)

3) Save 4k to purchase 2 new 15" Apple Macs Laptops by end of 2012. (Currently $2,400/$4,0 00 or 60.00%)

4) Save 3k towards Baby related expenses by end of 2012. (Currently $2,154/$3,000 or 71.8%)

5) Save 2.4k towards Car Repairs by end of 2012. (Currently $975/$2,400 or 40.63%)

6) Save 2k towards Medical Expenses by end of 2012. (Currently $750/$2,400 or 37.5%)

Edit: To correct when we paid off loans and became debt free.
Edit 2: To correct the time we've been married put one year instead of two... Lol.

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~ Eagle


Last edited by Eagle on Tue Jan 21, 2014 7:52 am, edited 3 times in total.

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 Post subject: Re: Soaring Higher
PostPosted: Thu May 17, 2012 3:05 pm 

Joined: Sat Feb 12, 2011 5:47 pm
Posts: 90
Location: Ontario, Canada
Welcome! Good for you for getting out of debt. What an accomplishment. It sounds like you have a good plan. You will get many good ideas here.

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Kate


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 Post subject: Re: Soaring Higher
PostPosted: Mon May 21, 2012 6:34 am 

Joined: Mon Jan 11, 2010 9:06 am
Posts: 160
Location: Texas
Welcome aboard!

Looks like you have a great start and a good plan ahead.

I'll be curious to hear more about the decisions/plans you make regarding investments. That's the area I'd like to formalize my plan for as well. Debt management isn't a concern, savings are pretty automated, now looking to make sure I'm comfortable with the next step.

And congrats on the little one!


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 Post subject: Re: Soaring Higher
PostPosted: Sat Jun 02, 2012 12:46 pm 
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Joined: Thu May 17, 2012 10:05 am
Posts: 1114
Kate1 wrote:
Welcome! Good for you for getting out of debt. What an accomplishment. It sounds like you have a good plan. You will get many good ideas here.


Thanks! I'm actually really interested in advice regarding Mutual Funds, Money Market Accounts, Bonds, and IRA's. We currently have MF's in Fidelity, UBS, and Vanguard...

Panda wrote:
Welcome aboard!

Looks like you have a great start and a good plan ahead.

I'll be curious to hear more about the decisions/plans you make regarding investments. That's the area I'd like to formalize my plan for as well. Debt management isn't a concern, savings are pretty automated, now looking to make sure I'm comfortable with the next step.

And congrats on the little one!


Thanks for the encouragement! My wife sometimes wonder if I plan too much. And thanks also for the congrats on the little guy. He is so precious!

"Plan your work for today and every day, then work your plan." - Margaret Thatcher

"A good plan violently executed now is better than a perfect plan executed next week." - George S. Patton

"You were born to win, but to be a winner, you must plan to win, prepare to win, and expect to win." - Zig Ziglar

"Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even." - Huhammad Ali

Update:

Account | End Balance | Goals | % of Goals Complete
Savings (E Fund) | $6,972.45 | $9,500.00 | 73.39%
Savings (New Laptop) | $2,500.05 | $4,000.00 | 62.50%
Savings (Baby) | $2,254.10 | $3,000.00 | 75.14%
Savings (Car Repairs) | $1,000.02 | $2,400.00 | 41.67%
Savings (Car Insurance) | $407.03 | $400.00 | 101.76%
Savings (Medical Exp) | $775.03 | $2,000.00 | 38.75%
Savings (Son College) | $258.15 | $500.00 | 51.63%


Reason we were unable to save more is because our son was born this past month in May. I'm sure there will be more bills to follow.

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~ Eagle


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 Post subject: Re: Soaring Higher
PostPosted: Thu Jun 28, 2012 7:19 am 
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Joined: Thu May 17, 2012 10:05 am
Posts: 1114
Update: Savings Goal $1000. Actual Savings $1267.97 Wohoo!!

Notes: Added International Travel Savings.

Added the majority of savings this month to Medical Expense Savings with expectation of medical (baby) bills upcoming in June.

Opened up a Roth IRA through work. Innittially depositing $80 a month into it.

Account / End Balance /2012 Goals / % Complete June ’12 / % Complete May ‘12 / % Change / Savings June
Savings (E Fund) / $7,172.45 / $9,500.00 / 75.50% / 73.39% / 2.11% / $200.00
Savings (New Laptop) / $2,600.07 /$4,000.00 / 65.00% / 62.50% /2.50% / $100.00
Savings (Baby) / $2,354.12 / $3,000.00 / 78.47% / 75.14% / 3.33% / $100.00
Savings (Car Repairs) / $1,025.03 / $2,400.00 / 42.71% / 41.67% / 1.04% /$25.00
Savings (Car Insurance) / $400.00 / $400.00 / 100.00% / 100.00% / (1.76%) / ($7.03)
Savings (Medical Exp) / $1,425.04 / $2,000.00 /71.25% / 38.75% / 32.50% / $650.00
Savings (Son College) / $358.74 / $500.00 / 71.75% / 51.63% /20.12% / $100.00
Savings (Int. Travel) / $100.00 / $2,000.00 / 5.00% / 0.00% /5.00% / $0.00

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~ Eagle


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 Post subject: Re: Soaring Higher
PostPosted: Mon Jul 09, 2012 7:09 pm 
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Joined: Thu May 17, 2012 10:05 am
Posts: 1114
Well I'm a bit bummed to start off the week. I love my wife and child dearly. They are okay and that is what matters. The birth ended up being a C-Section. Paid $500 worth of medical bills related to the baby this weekend. It is out of this month's budget so that means less savings this month... And there will be more bills to pay to follow. Hopefully I can get them all paid to meet the deductables and coinsurance by the end of next month. We shall see.

Also insurance has gone up with the little one and I have been depositing money into a Roth IRA. I may skip the Roth IRA for a couple of months.

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~ Eagle


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 Post subject: Re: Soaring Higher
PostPosted: Thu Jul 19, 2012 6:08 am 
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Joined: Thu May 17, 2012 10:05 am
Posts: 1114
Bills & Budget:
Well mid month so far is actually looking better than anticipated. Paid a bunch of medical baby/momy bills out of this months budget and didn't even have to touch savings.

On the positive side another family member added to the cell phone plan. So that should lower our cell phone bill portion a little.

Baby: Baby is growing big. Now two months old. Loves to smile, laugh, and actually recognizes people now. He's also very active. At 5 weeks doc said he looked like a 2 month old. Surprised at how many diapers we've used. Mid month and we've probably already used over 250 diapers. I guess techincally it's been almost three weeks. Still that's an average of 13 diapers a day. Of course perhaps we change him too often. Sleep is a luxury but last night he slept through the whole night for the first time - 8 hours!

Investments:
Need to still work on all the mutual funds accounts to consolidate them and add respective spouses to each others accounts. Also going to pick my Grandfather's brain on Bonds. Decided to keep the ROTH IRA contributions as is.

Loan to Friend:
I loaned $2500 to a friend for him to buy a vehicle. He will be paying us back monthly. The first payment is due at the end of this month. We'll see how this little venture goes. 8)

Next month actually looks promising. 5 weeks = 5 paychecks. So that should help with some of the medical bills. :clap:

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 Post subject: Re: Soaring Higher
PostPosted: Thu Jul 19, 2012 2:29 pm 

Joined: Sat Jun 16, 2012 2:11 am
Posts: 192
250 dipers in half a month or even three weeks is insane? I have been through it with two kids and none ever spent more than maxiumum eight a day, mostly probably six or seven (we change instantly when there is "something" in the diper)? That adds up to 183-244 a month.

As far as investments go, that has been my interest for some 21 years, studied economics and work at a stock exchange. Somewhere in the middle of it all I realised that if the goal is to make you rich (not your bank or broker) and giving you a good night sleep, the way to go is to keep it very, very simple and go with maxiumum diversification for the least possible cost. That is, index fund. Another thing: never, ever buy stocks (or similar risk) with money you need within 10 years. Invest, don´t speculate. In practice, I invest in stocks (direct or through funds) for retirement, everything else = savings accounts. The "target funds" so popular in the US, that you can get for <0,2% a year (Vanguard) is a very nice choise for someone who really do not want to be an active investor/analyst (maybee want to be a father and husband when not working or sleeping). It does not have to be more advanced than that?

Those funds invest 90% in stocks and 10% in bonds up to age 50-55, and then start switching to bonds. In real terms (after inflation) you should be able to get 5-6% up to age 50-55, and then closer and closer to something like 2-3%. Just start calculating. With an average real return of 4,5% from age 28 to 65 (37 years) saving the equivalent of $100 a month (annualy adjusted for inflation) adds up to the equivalent of $109.250. You need the equivalent of a million? Save $1.000 a month.


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 Post subject: Re: Soaring Higher
PostPosted: Mon Jul 30, 2012 5:03 am 
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Posts: 1114
Thanks for the insights NL. ;)

Northern Light wrote:
250 dipers in half a month or even three weeks is insane? I have been through it with two kids and none ever spent more than maxiumum eight a day, mostly probably six or seven (we change instantly when there is "something" in the diper)? That adds up to 183-244 a month.


Okay maybe I was exaggerating. Usually we change Nathan’s diaper 10-12 times a day. He is in the 95th percentile for his age. He eats, pees, and poops a ton. Lol.

Northern Light wrote:
As far as investments go, that has been my interest for some 21 years, studied economics and work at a stock exchange. Somewhere in the middle of it all I realised that if the goal is to make you rich (not your bank or broker) and giving you a good night sleep, the way to go is to keep it very, very simple and go with maxiumum diversification for the least possible cost. That is, index fund. Another thing: never, ever buy stocks (or similar risk) with money you need within 10 years. Invest, don´t speculate. In practice, I invest in stocks (direct or through funds) for retirement, everything else = savings accounts. The "target funds" so popular in the US, that you can get for <0,2% a year (Vanguard) is a very nice choise for someone who really do not want to be an active investor/analyst (maybee want to be a father and husband when not working or sleeping). It does not have to be more advanced than that?



Yes, thanks for the insight. Simple = better.

Northern Light wrote:
Those funds invest 90% in stocks and 10% in bonds up to age 50-55, and then start switching to bonds. In real terms (after inflation) you should be able to get 5-6% up to age 50-55, and then closer and closer to something like 2-3%. Just start calculating. With an average real return of 4,5% from age 28 to 65 (37 years) saving the equivalent of $100 a month (annualy adjusted for inflation) adds up to the equivalent of $109.250. You need the equivalent of a million? Save $1.000 a month.


Our goal is to save at least $1000 every month. Not going to happen this month but I'll post more on that later.

We’re considering two options: A) investing 70-75% in mutual funds and 25-30% in bonds or B) Investing everything (minus the 401K funds) in cd's/bonds for say 6 months - then reinvesting come end of January. I wonder with the election coming this year if the stock market will dive significantly again come November.

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 Post subject: Re: Soaring Higher
PostPosted: Mon Jul 30, 2012 1:02 pm 
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Posts: 1114
The Difficult:
We had to pay extra baby/mommy medical/birth bills. Not as bad as we thought it would be. But there will still be another $900 or so on next month’s budget. But it could be worse if we didn’t have insurance. For the coverage we are grateful.

The Exciting:
My laptop died this month. Thankfully this meant we were able to use the Savings (New Laptop) fund to get our new Mac. So pumped! It should be here at the end of this week or beginning of next week.

We got a refund from our OBGYN as we paid her ahead of time before delivery. Based on when the bills are submitted is how much we pay various medical providers. We used this to pay some of this month’s medical bills.

My parents and sister paid their portion of the family talk cell phone bill ahead of time. They’re paid up for the next 6 months. The upside is we used the extra money to put towards the laptop and the medical bills. The down side is we will be responsible for the full bill until January. Still AT&T didn’t disclose adding my sisters line would reduce our minutes from 850 to 700 minutes a month. Considering we now have 5 lines (had 4 lines last month) on the plan this was quite frustrating. This translated into more people to share the minutes, less minutes, loss of our rollover minutes (about 900), and the same cost. I called and negotiated a $240 credit and 5000 anytime minutes expiring in a year. Hey never hurts to ask right? Got a free month out of the deal and the extra 416 min per month.

Account / End Balance /2012 Goals / % Complete July ’12 / % Complete June ‘12 / % Change
Savings (E Fund) / $7,172.45 / $9,000.00 / 79.69% / 79.69% / 0.00%
Savings (New Laptop) / $1,200.07 / $4,000.00 / 30.00% / 65.00% / -35.00%
Savings (Baby) / $2,354.12 / $3,000.00 / 78.47% / 78.47% / 0.00%
Savings (Car Repairs) / $1,025.03 / $2,400.00 / 42.71% / 42.71% / 0.00%
Savings (Car Insurance) / $400.00 / $400.00 / 100.00% / 100.00% / 0.00%
Savings (Medical Exp) / $1,425.04 / $2,000.00 / 71.25% / 71.25% / 0.00%
Savings (Son College) / $358.74 / $500.00 / 71.75% / 71.75% / 0.00%
Savings (Int. Travel) / $125.00 / $2,000.00 / 6.25% / 5.00% / 1.25%

We put $25.00 in the Savings (Int. Travel) for kicks. So not a lot of saings going on this month. But it could've been worse. We may need to re-evaluate the 2012 Goals based on these added expenses.

Our friend made the first payment on the car loan at the end of July a few days early. This is a good sign.

Looking forward to next month. 5 weeks means 5 paychecks.

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~ Eagle


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 Post subject: Re: Soaring Higher
PostPosted: Mon Jul 30, 2012 5:54 pm 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1200
Quote:
Account / End Balance /2012 Goals / % Complete July ’12 / % Complete June ‘12 / % Change
Savings (E Fund) / $7,172.45 / $9,000.00 / 79.69% / 79.69% / 0.00%
Savings (New Laptop) / $1,200.07 / $4,000.00 / 30.00% / 65.00% / -35.00%
Savings (Baby) / $2,354.12 / $3,000.00 / 78.47% / 78.47% / 0.00%
Savings (Car Repairs) / $1,025.03 / $2,400.00 / 42.71% / 42.71% / 0.00%
Savings (Car Insurance) / $400.00 / $400.00 / 100.00% / 100.00% / 0.00%
Savings (Medical Exp) / $1,425.04 / $2,000.00 / 71.25% / 71.25% / 0.00%
Savings (Son College) / $358.74 / $500.00 / 71.75% / 71.75% / 0.00%
Savings (Int. Travel) / $125.00 / $2,000.00 / 6.25% / 5.00% / 1.25%

I have a nagging question & this is a good place to ask it...why do some people get so carried away with segregating different expenses into so many accounts? You have 8 savings accounts here & if it were me, I could whittle it down 1 or maybe 2. No offense to you but do people not have the self discipline to just put it in 1 account & only spend it as necessary? Am I the only one who thinks this is overkill?


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 Post subject: Re: Soaring Higher
PostPosted: Tue Jul 31, 2012 5:12 am 

Joined: Tue Mar 11, 2008 12:19 pm
Posts: 1776
Location: Ottawa, Canada
Tightwad wrote:
I have a nagging question & this is a good place to ask it...why do some people get so carried away with segregating different expenses into so many accounts? You have 8 savings accounts here & if it were me, I could whittle it down 1 or maybe 2. No offense to you but do people not have the self discipline to just put it in 1 account & only spend it as necessary? Am I the only one who thinks this is overkill?


I can't speak for anyone else, but for me, personally, there's only actually one physical bank account. We segregate all the different savings goals in a spreadsheet, so we know how much of that money is allocated toward each "goal," but as far as the bank is concerned, it's all in one big Savings account.

I like having it separated like that. Let me give you an example.

Recently, we faced potentially needing to buy a second car. We have $7,000 earmarked for "Vehicle Replacement," which is not enough for the vehicle my wife wants. So instead we decided to hold off, keep saving, and I'll take the bus in the meantime.

However, we also have $5,000 earmarked for Travel, and $15,000 earmarked for our Emergency Fund.

Now, all that money is in the same account. We have one bank account with $27,000 in it. The numbers I gave above are just values in different columns in a spreadsheet on my computer at home. As it happens, that is more than enough to buy the vehicle we want. However, it would drain our Travel and Emergency money. If we didn't keep them mentally separated like that, I worry we'd have been tempted to buy the vehicle, when it doesn't really "fit" with our plans (our plans only provide for a $7,000 vehicle at the moment).

I'm not saying this is how everyone should do it, but it works for us.


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 Post subject: Re: Soaring Higher
PostPosted: Tue Jul 31, 2012 6:13 am 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1200
kombat wrote:
Tightwad wrote:
I have a nagging question & this is a good place to ask it...why do some people get so carried away with segregating different expenses into so many accounts? You have 8 savings accounts here & if it were me, I could whittle it down 1 or maybe 2. No offense to you but do people not have the self discipline to just put it in 1 account & only spend it as necessary? Am I the only one who thinks this is overkill?


I can't speak for anyone else, but for me, personally, there's only actually one physical bank account. We segregate all the different savings goals in a spreadsheet, so we know how much of that money is allocated toward each "goal," but as far as the bank is concerned, it's all in one big Savings account.

I like having it separated like that. Let me give you an example.

Recently, we faced potentially needing to buy a second car. We have $7,000 earmarked for "Vehicle Replacement," which is not enough for the vehicle my wife wants. So instead we decided to hold off, keep saving, and I'll take the bus in the meantime.

However, we also have $5,000 earmarked for Travel, and $15,000 earmarked for our Emergency Fund.

Now, all that money is in the same account. We have one bank account with $27,000 in it. The numbers I gave above are just values in different columns in a spreadsheet on my computer at home. As it happens, that is more than enough to buy the vehicle we want. However, it would drain our Travel and Emergency money. If we didn't keep them mentally separated like that, I worry we'd have been tempted to buy the vehicle, when it doesn't really "fit" with our plans (our plans only provide for a $7,000 vehicle at the moment).

I'm not saying this is how everyone should do it, but it works for us.

Oh...I took that as being different accounts.


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 Post subject: Re: Soaring Higher
PostPosted: Tue Jul 31, 2012 6:28 am 
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Tightwad wrote:
I have a nagging question & this is a good place to ask it...why do some people get so carried away with segregating different expenses into so many accounts? You have 8 savings accounts here & if it were me, I could whittle it down 1 or maybe 2. No offense to you but do people not have the self discipline to just put it in 1 account & only spend it as necessary? Am I the only one who thinks this is overkill?


No offense taken. Actually yes we are very disciplined with our money. However, we love having the ability to actually see what is in the different savings accounts. And we transfer money automatically (well most months) online. Actually the list above doesn't include two other savings accounts we have - husband education and wife education. We did have one savings account at one point. But since they are all free we actually enjoy having multiple savings accounts and seeing the big picture at a glance by just logging into mint or our bank website.

kombat wrote:
I can't speak for anyone else, but for me, personally, there's only actually one physical bank account. We segregate all the different savings goals in a spreadsheet, so we know how much of that money is allocated toward each "goal," but as far as the bank is concerned, it's all in one big Savings account.

Recently, we faced potentially needing to buy a second car. We have $7,000 earmarked for "Vehicle Replacement," which is not enough for the vehicle my wife wants. So instead we decided to hold off, keep saving, and I'll take the bus in the meantime.

However, we also have $5,000 earmarked for Travel, and $15,000 earmarked for our Emergency Fund.

Now, all that money is in the same account. We have one bank account with $27,000 in it... If we didn't keep them mentally separated like that, I worry we'd have been tempted to buy the vehicle, when it doesn't really "fit" with our plans (our plans only provide for a $7,000 vehicle at the moment).

I'm not saying this is how everyone should do it, but it works for us.


Right. Like I said we used to do this as well. Now we have several accounts to help get a clearer picture and not have to keep them mentally seperated. Really it's whatever works for you and your family. ;)

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 Post subject: Re: Soaring Higher
PostPosted: Tue Jul 31, 2012 9:53 am 

Joined: Mon Jan 11, 2010 9:06 am
Posts: 160
Location: Texas
I actually do a combination of the methods. I like the segregation of money because as Kombat metioned, it makes it very clear when we're "borrowing" from one goal/priority to fund another.

I use separate accounts for the categories that I want to strongly discourage borrowing/compromising on. So for me, I self-escrow, so that has it's one savings account. My emergency fund and my IRA holding account also have their own accounts. Currently I also have a separate savings account for the baby, as I was trying to clearly set aside the money needed for supplies, medical bills, and covering my reduced income until next year.

My other goals that are more flexible and have less consequences when we borrow or shift priorities are in a shared account that I track by spreadsheet.

I think it's just an area where we're each different and have to find what works for each of us. My only concern with using multiple accounts is that I think it tends to cause over-accumulation of cash. So I'm working on deciding what my max cash holding should be.


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