It is important to note that the analyses presented in the paper do not apply to all households, but rather to more affluent clients of financial planners.
stan1 wrote:An "important note" in the limitation section:It is important to note that the analyses presented in the paper do not apply to all households, but rather to more affluent clients of financial planners.
Wealthy people have more ability to take risk. Nothing new. Many people on this board have long considered their taxable investing accounts as assets that would be sold in the event of job loss or other financial hardship. Willingness is a different question.
nedsaid wrote:...if you are a homeowner raising children, it is hard for me to see how one could have too much cash. Cars and Houses need expensive repair and maintenance and kids (and us adults too) have a habit of breaking things. For example, replacing a roof can be thousands of dollars. Car repairs are often several hundred dollars....
Using Vanguard to stash emergency cash is just fine. Short term bond funds would work just as well though the principal fluctuates a little bit. I have part of my emergency funds at a mutual fund money market.
justus wrote:I recently came across this entry on betterment's site. What do you think? Should you invest your emergency fund in 40% stocks?
https://www.betterment.com/blog/2013/08 ... -is-wrong/
Rick Ferri wrote:
Starting about 5-years ago, I split the permanent liquid asset half of my emergency fund into an intermediate-term municipal bond fund and total stock market index fund. My idea was to be more aggressive with these permanent liquid assets so that my total emergency fund would have the chance to outperform inflation and taxes. That has happened.
Would it be correct to say that you use the Short-Term Bond Index ETF for the “immediate” liquid assets? And, the other two funds for the “permanent” half?
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