The FIRE Portfolio Cash Drag Nobody Measures

Episode 100 of The FIRE Podcast with Fexingo tackles one of the most overlooked leaks in early retirement portfolios: cash drag. Lucas and Luna walk through a real scenario — a FIRE couple with a $1.2 million portfolio holding 8% in cash equivalents earning 2.3% while inflation runs at 3.1%. Over 30 years, that cash allocation costs them over $180,000 in lost purchasing power. They compare three strategies: a tiered cash ladder using short-term Treasuries and a money market fund, a bond ETF sleeve with auto-rebalancing, and a direct-indexing cash buffer. They also discuss the behavioral trade-off: how much liquidity do you really need when you're retired with a dividend stream? If you've checked your cash allocation lately, this episode might change how you hold it. #FIREPodcast #FexingoBusiness #BusinessPodcast #Finance #EarlyRetirement #CashDrag #PortfolioConstruction #Inflation #Liquidity #TieredCashLadder #ShortTermTreasuries #MoneyMarket #BondETF #DirectIndexing #SequenceOfReturnsRisk #BehavioralFinance #WithdrawalRate #FinancialIndependence Keep every episode free: buymeacoffee.com/fexingo