Are You Holding More Cash Than You Need?

An accessible emergency fund remains a cornerstone of sound financial planning. It provides resilience during unexpected events such as job changes, health issues or relocation delays.

Rather than relying on a fixed rule, the appropriate level of emergency cash depends on factors such as:

• Income stability and contract structure
• Family circumstances and dependants
• Country of residence and access to healthcare
• The predictability of future expenses

For many globally mobile professionals, maintaining at least six months of core expenditure in readily accessible cash is sensible. Beyond that level, additional balances should be reviewed carefully to ensure they are still serving a defined purpose. A financial adviser can help you clarify your liquidity requirements.

Large cash holdings often feel prudent, yet they come with an opportunity cost that is easy to overlook. Over time, cash typically struggles to keep pace with rising living costs, particularly when inflation outpaces interest rates. Consequently, excessive cash can quietly erode purchasing power.

This does not require taking unnecessary investment risk, but it does highlight the importance of ensuring that capital is positioned appropriately for its intended time horizon.

In other words, cash that is not needed in the short term may be better suited to a different role within your portfolio. 

Redirecting surplus cash into a thoughtfully constructed investment strategy can materially improve long-term outcomes without compromising day-to-day security.

Over time, this can: 

• Increase flexibility around retirement timing
• Improve resilience against rising living costs
• Support future lifestyle choices across different countries
• Reduce the risk of running out of capital later in life
• Protect family interests over generations

The objective is not to maximise returns at all costs, but to ensure that each portion of capital has a clear purpose and is aligned with future plans.

One of the most effective ways to assess whether excess cash is limiting future options is through long-term cashflow modelling. This approach allows different outcomes to be explored. When viewed over decades rather than months, even modest adjustments can significantly improve sustainability and reduce the risk of difficult trade-offs later in life.

A financial adviser can run through these scenarios with you and provide clear visual representations of how today’s decisions may influence future wealth and income.

A structured review of cash holdings helps ensure that money held today supports the lifestyle you want tomorrow, rather than unintentionally constraining it.

If you would like to review whether your current cash position is aligned with your wider financial objectives, speak with a professional adviser who understands international planning considerations. A clear, forward-looking analysis can help ensure your capital is working with your plans, not against them.