How to Calculate when to Invest Your Cash
How to Calculate when to Invest Your Cash
Write the following numbers down:
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The interest rate that your broker is paying you on your cash balance.
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hours
Find the break-even point when the return from the cash account equals the return from your proposed investment.
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Use this formula to calculate the break-even point: Take your cash balance and subtract the broker's commission on the proposed investment.
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If Amount A above is larger than Amount B it is to your advantage to invest your cash in the investment you're considering.
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