How much liquid cash?

Ximian

I'm curious about what most people consider too much liquid cash and what the alternatives are to having liquid cash. Scenario is as follows:

Ensure that Cash ISA is full every year
Overpay mortgage (penalty free) by a max of 10% per year
Have stocks and shares ISA
Ensure that emergency fund is easily available, at least 6 months salary in an easy access account.
Debt free
Basic rate taxpayer but soon to be higher rate tax payer.

If all the above conditions are met, what would be considered too much liquid cash and what other alternatives are there to having liquid cash? For example, stocks and shares outside of an ISA, property, antiques, precious metals.

TIA

MX5huggy

You dont seem to need any more cash to hand so Pension?

Lokolo

Holidays, Cars, Alcohol, Women.

I'm all for saving etc. but you need to make sure you enjoy yourself as well. If you are doing all that and have spare left over, I'd spend it.

Linton

With 6 months pay in cash I dont see the need for the Cash ISAs unless you are saving for a known major expenditure.

You havent mentioned pensions - I would hope you are putting significant money into one with extra contribution from your employer.

The next step IMHO is S&S ISAs. That will absorb £10K approx/year. If you need somewhere else to park your money beyond that then I guess holding shares or funds outside an ISA is perfectly sensible.

I wouldnt bother with "alternative" investments until you had accumulated a large, well diversified S&S portfolio. One exception to that could be if you have specialised professional knowedge of say antiques or fine wines etc

Ximian

Thanks for the input everyone. It's interesting to get some ideas and perspectives from everyone.

Lokolo, I like the ideas, but I'm married, the days of alcohol and women are over for me, holidays are still a good idea though hah!

Regarding pension, I contribute 5% of my salary and my employer contributes 6%. I also paid a lump sum of £4000 into my private pension last year.

I was a bit skeptical about stocks and shares as I have one open from 2008 that is wrapped in an ISA with CoFunds and the growth hasn't been anything significant, my savings account beats the growth of that ISA! My self selected funds with H&L seem to be doing OK the past few months. I'm wondering if it might be time to see an IFA and carefully plan my financial future as best I can.

atush

Well, as you move into the higher rate tax band, I would increase pension contribs as this will be tax efficient. Elsewhere, if you have 6-12 months in cash already I like Stock, funds and invesment trusts.

Funnily enough, I do have a big interest in buying antiques, not so much for capital growth, more to keep costs down on furnishing a house.

When I first started buying furniture, I found that new beds and sofas are important, but for wooden furniture I found prices high, quality not always so, and it was worth 50% less the day it is delivered to your home. And that you can buy a 50-100 yr old dining table for less than a brand new one- same for chests of drawers where old pine can be cheaper than new veneer. And that they are still worth what you paid for them (if not more) 5 years/days later.

Of course this a dangerous route to go down, as then you are signing up for night courses in how the french polish and re-uphoulstery rather than going out to a club.