Find the Right Spot for Your Extra Cash

A young executive needs answers to three questions.

Mark Bologna is one of the last people you'd imagine would lose sleep over his finances. A senior federal executive, Mark, 36, has already accumulated $250,000 in his thrift savings plan, the government's version of a 401(k). He and his girlfriend own a condominium in northern Virginia, and he just finished reconstructing a small house in his hometown of New Orleans. Once it's rented, Mark expects to net several hundred dollars a month.

Still, Mark confesses to late-night angst about being too careless with his cash. "I let $35,000 sit around and missed this whole bull market," he says. Not quite; his thrift-plan balance is invested 100% in stocks, divided among large-company, small-company and foreign-stock index funds. Mark also owns $25,000 worth of Berkshire Hathaway shares, which he calls a "foundation" because Berkshire is so diversified. What's vexing Mark is the roughly $60,000 he has in the bank and in money-market funds. "I have to take advantage of my ability to save," he says.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.