“How much cash should I hold?” It’s one of the most common questions we hear from tech professionals. The answer isn’t just about emergency funds. It’s about building a strategic liquidity framework that gives you financial flexibility without leaving too much cash on the sidelines and allowing for your assets to work hard for you.

At Traveka Wealth, we recommend a three-tier liquidity approach. This structure helps to ensure you have access to funds when you need them while keeping your wealth working efficiently toward your long-term goals.

First Tier: Immediate Access Liquidity

Your first tier should cover three to six months of essential expenses. Hold this in high-yield savings accounts or money market funds. Look for money market funds that exclusively hold Treasury securities to benefit from the state income tax exemption for the interest income generated. These assets provide same-day or next-business-day access.

This tier should be able to handle your immediate needs. Think unexpected medical expenses, emergency home repairs, or sudden travel requirements. The goal isn’t maximum returns. The goal is absolute certainty and instant availability.

Money market funds currently offer competitive yields. Many are paying 3-4% as of late 2025. This makes them an attractive option for your cash reserves.

Second Tier: Near-Term Liquidity Through Credit

Your second tier consists of established credit lines. These include portfolio lines of credit secured against your investment accounts provided by the major financial custodians like Fidelity, Schwab, etc. that let you borrow up to 60 – 65% of the accounts value. They also include home equity lines of credit (HELOCs).

These credit facilities provide access to capital within one to two business days and you don’t need to liquidate investments. You avoid potential tax consequences, and you maintain your investment positions during market volatility to avoid liquidating assets during unfavorable times.

Portfolio lines of credit are particularly valuable for tech professionals. They allow you to access liquidity without selling concentrated stock positions during blackout periods. They also come in handy as a bridge loan for paying taxes (e.g. estimated taxes, property taxes, etc.) between stock vests. Interest rates on these secured lines are variable and tied to overnight financing rates (like the Secured Overnight Offer Rate, or SOFR) plus a margin based on the size of the loan and any relationship discounts. These credit lines typically have lower interest rates than traditional personal loans.

Third Tier: Strategic Asset Liquidation

Your third tier is your taxable investment portfolio. This excludes retirement accounts like 401(k)s and IRAs. Those face early withdrawal penalties and unfavorable tax treatment.

Selling investments from your taxable accounts takes 2-3 business days for settlement. This tier should only be tapped after exhausting tiers one and two. Why? Because selling appreciated assets triggers capital gains taxes.

For tech professionals with concentrated stock positions, this tier requires careful planning. You need to consider a variety of issues, such as:

1. Any company blackout period that will prevent you from selling your company stock.
2. The tax implications of sale and making sure you understand the tax liabilities that will result from the sale.
3. Your outlook for the company stock in relation to your long-term financial goals

To be clear, we are big fans of prudently managing the risk with your employer stock. We advocate for regular, disciplined sales of vesting restricted stock units and ESPP shares to diversify your portfolio.

Implementing Your Liquidity Strategy

Start by calculating your monthly essential expenses. Multiply by 3-6 months for your first-tier target. Then establish credit lines while markets are stable and your balance sheet is strong. Finally, maintain a diversified taxable portfolio that can be liquidated if necessary.

This three-tier approach provides flexibility without creating a drag on your overall returns. You’re not holding two years of expenses in cash earning minimal interest. You’re also not scrambling to sell investments during emergencies or market downturns. A flexible and thoughtfully constructed liquidity strategy helps you manage the lumpy nature of your income sources from bonuses and stock-based compensation.

Your liquidity strategy should evolve with your wealth. As your net worth grows, your percentage in tier-one cash may decrease. Your access to credit facilities may expand. The key is maintaining a deliberate structure that serves your specific needs.

Ready to optimize your liquidity strategy and cash management plan? At Traveka Wealth, we help tech professionals build comprehensive liquidity frameworks that balance accessibility, tax efficiency, and investment returns.

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Certain of the information contained herein has been obtained from third- party sources and has not been independently verified. It is made available on an “as is” basis without warranty. Any strategies or investment programs described in this presentation are provided for educational purposes only and are not necessarily indicative of securities offered for sale or private placement offerings available to any investor. 

The views expressed in the referenced materials are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance; actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Historical performance results for investment indices and/or product benchmarks have been provided for general comparison purposes only, and do not include the charges that might be incurred in an actual portfolio, such as transaction and/or custodial charges, investment management fees, or the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. If performance fees are stated, the performance returns are net of fees which include expense ratios and other fees of the underlying investments but does not include Traveka’s advisory fees. Traveka’s advisory fee will reduce the returns shown in this document.