What should you do with all the cash at the bank?

What are some good ways to manage the cash you have at the bank?

The support of our long-time website visitors is invaluable, and we would appreciate hearing from them. Since we began posting our investing ideas on our blog, we have greatly appreciated the positive feedback we have gotten. However, many have noted that our investment conversations can be difficult to follow without substantial prior knowledge of the subject matter. Please believe us when we say it is the last thing, we want to hear from you, the reader, because we work hard to simplify complex financial concepts.

This month, we’ll take a step back and concentrate primarily on financial planning issues, specifically on what we believe are actionable steps you can take to build your wealth that don’t involve reading complex financial statements or making predictions about earnings per share or any other obscure investment metric. You likely already know that we place a strong emphasis on investments because of their significance in creating wealth. However, a key part of our service is advising clients on how to implement incremental improvements in their lives.

Based on discussions with clients and other investors throughout the year, we’ve narrowed our focus for the August article to one primary area that we believe will be important in 2023: how to best invest a large sum of money that has been sitting in a savings account. Some of the techniques we’ll discuss below are best implemented with the help of a financial professional, but others are suggestions you can put into place on your own as part of a sound financial strategy.

But first, a word or two about the state of the market as we prepare to discuss the issues. If you’ve been keeping up with us over the past six months, you know that we’re positive about the market. We have been open about our belief that the market and the economy are poised for recovery after the bear market of the past year. At this point in 2023, we are happy to find that our confidence was well-placed. The market is becoming more diversified. For the market to stay in bull territory for the long term, it will need support from companies of all sizes, not just the few megacap tech titans.

We also take heart from the fact that historically cyclical sectors like homebuilders and industrials are showing signs of strength. We have not seen such market weakness in economically crucial categories in 2023, even though interest rates have been clearly on the rise. Heavy manufacturing businesses, as well as transportation companies are up more than 12% year-to-date. Even though fixed mortgage rates have inched up to almost 7%, we see evidence that the predicted recession did not materialize over the past year.

The resilience of the markets gives us reason to be hopeful about the second half of 2023. We recognize that investors may be hesitant to reinvest in the markets following a challenging year, but we would love to assist you in doing so so that you can take advantage of trends that look to be moving in the right direction.


Our regular interactions with expat investors are both the most satisfying and educational elements of our jobs as advisors. By doing so, we gain valuable insight into the mind behind the economy and market movements.

Many of the clients we’ve spoken with this year have large sums of money sitting in their savings accounts. Several factors contribute to this result. First, after a devastating 2022 for the stock and bond markets, many investors are justifiably spooked.

It’s common for top earners to be so preoccupied with doing what they do best that they neglect to look for the most advantageous ways to put their wealth to work. Today, we wanted to address those of you who have cash accumulation in low-interest-bearing accounts (a good problem to have, we know) by discussing some of those uses for cash. When you have saved up enough money for a six-month emergency fund, it’s time to re-evaluate how best to spend your money.

We came across some rather unsettling facts and figures regarding the rate of return (or lack thereof) on interest-bearing savings accounts. The average yield on a savings account is currently 1.25%, and it is even lower at 0.50%. Banks are making a killing off this low-cost funding option, and the low returns they’re offering you are having a real impact on your ability to keep up with above-average inflation. Hereunder, we will discuss only one of the many approaches you can take to maximize your cash flow’s return:


One of our favorite ways to put client money to work without exposing them to stock market risk is through the creation of corporate bond portfolios. Since bonds are a complex financial instrument, we hope that the following analogy to a loan may help you better understand them. To issue bonds and raise capital, corporations typically work with investment banks. The bank then issues “bonds” (a form of security) to sell to individual and institutional investors in exchange for capital. Corporate bonds are like certificates of deposit in that they allow investors to lend money to a company in exchange for interest.

Return rates on “safer” bonds remain low on average. The emphasis is on “on average” once more. High-quality issuer corporate bonds (investment-grade or speculative-grade) are trading with yields above 7%, 8%, and even 9%. There are several important considerations that lead us to favor individual bonds over bond funds. We have control over when and if we realize capital gains, and there are a number of tax-efficient strategies we can pursue to improve your after-tax return: (1) the maturity date and cash flows to the investor are predictable; (2) by selecting individual bonds, we have the opportunity to build a portfolio that can deliver greater returns over time; and (3) we have control over when and if we realize capital gains.

We agree that the theory is intriguing, but we believe that concrete examples are necessary to fully convey the argument. Zenith Energy Ltd. bonds are among our favorites on the market right now because Zenith is an international energy production and development company, generating revenue with production, exploration, and development assets in Africa, the Middle East, and Europe, including electricity generation in Italy. The yearly yield on their 2026 bond is just over 10%, and the bond is rated B+.

This bond is just one of a few that we track that provide great return potential with significantly less risk than regular stocks.

Buying stocks for growth and income

We believe that growth investments can find a home in the portfolios of most investors. Your risk tolerance will determine whether you should invest in dividend stocks (usually lower risk and return) or growth stocks (typically higher risk and return). However, stocks have consistently outperformed other asset classes over long periods of time.

A time-constrained investor would be well served to work with a financial advisor who focuses solely on the selection of appropriate securities. We recommend beginning with stocks if you have a sizeable amount of cash in savings because most investors can gain over the long term from allocating to growth instruments like equities.

Please don’t hesitate to get in touch for a consultation if you’d like more information on a tailored approach to meet your risk tolerance and financial goals and to learn how we can assist you in finding useful uses for your income that exceed the meager returns you receive from your bank: hello@expatwealthatwork.com