I’ve actually kind of done this over the past few years anyway without really thinking about it. I’ve had people tell me, just put it all together so it’s easy to track! Bitch, that’s what spreadsheets are for!

I have our investments spread between Vanguard, T Rowe Price and TD Ameritrade. Our liquid cash is between US Bank and Chase.

Thanks for your info on this.
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Obviously, Vanguard isn’t a bank. So there’s no FDIC protection. But if you have it in the Vanguard money fund, it’s as safe as anything on planet earth. No need to spread it beyond that. Any cash you need for regular outlays keep in your bank but the rest of the cash you want to preserve should go to the Vanguards of the world.

I can understand people being lazy about this in a world of zero rates. Then a bank or a money market fund were all the same thing. But now most banks are still paying maybe 1-2pct (though other banks are trying to attract deposits and paying more) while money funds are paying levels approaching 5pct.

So the 1-2pct option is basically a loan to a bank where the 5pct option is a loan to the government. You receive a much better return on the latter and have significantly less risk (if you want to bring up the debt ceiling, we can discuss, but that’s a longer conversation and doesn’t remotely change this conclusion).

These Silicon Valley idiots were exceptionally lazy and careless in their cash management. And that allowed SVB to operate as it did until it couldn’t.
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Can you elaborate on how that was made possible?
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Like what?
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Fucked up the duration of their bond portfolio.
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Investments are protected in similar fashion, by SIPC though correct? So just as important to have them spread out as well?

Thanks for your information.


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The government covered all depositors in exchange for a fee and ultimately made money on the program.
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Nah. Unless Vanguard were taken down due to some massive fraud where your assets were commingled and then stolen in a Madoff-esque fashion, I don’t think you need to spread things out.

Huge institutions invest with money managers all the time - it’s their easiest avenue to deploy capital into the markets - and they definitely aren’t spreading out a $5bn allotment amongst a thousand different managers.
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Via infamous bailouts funded with American taxpayer dollars
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It's a bailout to provide insurance for a fee? I guess.

Your job that I presume you have right now wouldn't exist if the government hadn't taken those steps. Insured depositors in those same banks wouldn't have been made whole if the government hadn't taken those steps.
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Twisted,

I assume you are talking about funds like VMRXX, VMFXX, or VUSXX. Is that right or is there something else that you'd recommend parking extra cash in with Vanguard?

And if it is funds like that trio, is there one that you recommend over the other?

Thanks.
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Hey, man - I'm not necessarily recommending anything, but those do a pretty good job of replicating true risk free USD short rates and have risk to nothing aside from the US government.

And yes, those funds.

By virtue of my job I tend to keep more in cash than what anyone would recommend, and 4.5-5% seems delightful relative to some riskier things that I get pitched with IRRs maybe 2x that.
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In any case, government stepped in to make uninsured depositors in SVB whole. If the government loses money, they essentially tax the banks.

Fed comes out strong providing liquidity to other banks who may experience outflows. Outflows will happen but this is still best case scenario for weaker banks.

I'm sure this story will still percolate and simmer but the tail risks meaningfully reduced in my mind.
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Thanks, man. I just wanted to make sure I was on the right track (and definitely not holding you to anything if we somehow discover that John Bogle had the biggest pyramid scheme of all time). I've been meaning to shift some cash from my low-interest-bearing account in a credit union for a few months. I already have an account with Vanguard with a total market index fund, so this will be easy. Appreciate you!
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I've got a big clump of money in one private online broker, which makes me a little nervous. It just kind of happened for various reasons. I keep pondering whether I should move some to another broker just to be sure no catastrophe strikes. Should I? It sounds like I shouldn't be worried that one of the big mainstream brokers will suddenly go belly up.

I would have never used the words "CDs" and "bold" in the same sentence before, but I'm making a bold move into CDs. I've been buying them on 1-5 year time frames with the plan that inflation will go down and I'll end up with CDs that are beating inflation. I think it's a reasonable bet, and my goal is just to match or beat inflation at this point. I think rates are still going up, so I'm buying into them somewhat slowly right now. I'm not putting anywhere near $250k into any one CD, but they're mostly going through the one brokerage, so I hope that's not a risk.
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