A listener wrote in: They sold their business 18 months ago and are sitting on roughly $12 million in cash, split between a high-yield savings account and a money market fund. They’re wondering whether to move any of it into I-bonds, a treasury ladder, or just leave things where they are. Their framing was: am I overcomplicating this?
Here’s my honest answer: you might be undercomplicating the bigger question.
Let’s Start With I-Bonds (Short Answer: Not the Right Tool Here)
I can knock this one out quickly. I-bonds have a purchase limit of $10,000 per person per year. At that pace, deploying $12 million would take a very long time. You can take I-bonds off the list entirely. They’re a fine vehicle for smaller, individual savings goals, but they’re not built for this.
The Question You Should Be Asking First
Before we talk about where to hold the cash, I want to raise a more important question: how much of this actually needs to stay in cash?
You sold your business 18 months ago. You’ve already been out of the market for a year and a half. If the plan is to keep everything in cash for another two to five years, that’s potentially a six-plus-year window where this money isn’t really working for you, and that window could span an entire business cycle. That matters a lot when we’re talking about a $12 million position.
I’m not suggesting you go out tomorrow and put everything into equities. But before we optimize where the cash sits, we should have a clear conversation about how much actually needs to stay liquid. Unless you’re spending $3 to $4 million a year, you probably have more cash on the sidelines than you need.
Dollar-cost averaging is a reasonable way to start deploying capital in a disciplined, structured manner without trying to time the market. The goal is to build a plan with actual dates and amounts, not a vague intention to “invest when things feel right.”
The Real Return Problem With Cash Right Now
Here’s the number that I think changes how people see this situation. Nominal yields on money market funds and high-yield savings accounts look decent right now, somewhere around 4 to 5%. But once you subtract inflation, your real return is roughly 1%, maybe a little less. You’re not losing ground rapidly, but you’re not building meaningful wealth either.
Over a five-year horizon, that’s a real cost. The $12 million you’re protecting today buys less at the end of that window than it does now, in terms of actual purchasing power. That’s the risk people underestimate when they think of cash as a safe default.
Why Treasuries Beat Money Markets on an After-Tax Basis
If you’re going to keep a significant cash position (and some portion of it makes sense to keep), the structure matters, especially for high earners.
U.S. Treasury securities are exempt from state income tax. Money market funds and high-yield savings accounts are not. For someone sitting on a $12 million position in a state with meaningful income tax, that differential is real money at scale.
Treasuries are also highly liquid. One of the few things you can say about U.S. Treasuries is that you can get in and out of them easily, which directly addresses the concern about needing access to the funds.
A rolling short-term treasury ladder, think six-to-twelve month maturities rolling forward, with potentially some longer positions if you want slightly more yield, gives you competitive returns, state tax efficiency, and the flexibility to adjust as your plans become clearer. That’s a meaningfully better structure than a high-yield savings account for a position of this size.
Building a Cash Strategy That Works Over Time
If we were working through this together, here’s how I’d frame the path forward.
First, define what liquidity actually means in your situation. How much do you spend annually? A reserve covering three to four years of expenses is a reasonable buffer for someone in a post-sale transition period. Anything above that is probably better deployed elsewhere.
Second, for whatever stays in cash, shift it into short-term Treasuries rather than savings accounts. The after-tax yield advantage compounds at this scale, and you keep the flexibility you need.
Third, build a deployment plan for the rest. A systematic schedule, not a date when you’ll feel emotionally ready, is what separates good outcomes from years of paralysis with cash slowly losing ground to inflation.
The $12 million you worked hard to build deserves a structure that’s actually designed to grow it.
This post is adapted from a recent episode of the Scholar Wealth Podcast. For more perspective on managing a large cash position after a liquidity event, listen to the full podcast episode here.