Where To Put My Emergency Fund?

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kelway
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Joined: Wed Jan 06, 2016 2:37 pm
Location: Nashville, TN, USA

Re: Where To Put My Emergency Fund?

Post by kelway » Fri Aug 11, 2017 7:46 pm

willthrill81 wrote::wink: Our 'real' firebox is very well hidden.
It's in your attic beneath the insulation. It's a good choice!

rattlenap
Posts: 324
Joined: Wed May 25, 2016 6:22 pm

Re: Where To Put My Emergency Fund?

Post by rattlenap » Fri Aug 11, 2017 8:40 pm

Paul Merriman's emergency fund recommendations are risky.

Vanguard Prime Money Market - First three to six months worth of living expenses
Vanguard Short Term Investment Grade Funds - in excess of three to six months of living expense

If go to the the Morningstar link below, the Short term bond NAV dropped around 10% in early 2008 and did not recover until late 2009. Also, in the Prime Money Market link below nearly 50% of it is issued as Yankee/Foreign, which can (correct me if I am wrong here) add sovereign risk, though they are traded in U.S. dollars.


http://quotes.morningstar.com/chart/fun ... ture=en_US

https://personal.vanguard.com/us/funds/ ... =INT#tab=2

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Nicolas
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Re: Where To Put My Emergency Fund?

Post by Nicolas » Fri Aug 11, 2017 9:02 pm

livesoft wrote:
Nicolas wrote:The problem in that case would come if having to sell in a down market. That's why it's nice to have a few bucks around so you can ride out bear markets without having to touch it.
I don't see that as much of a problem at all for millionaires (">> $1kk")
But selling low still hurts even if you've got a million bucks, and a million bucks isn't what it used to be.

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willthrill81
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Re: Where To Put My Emergency Fund?

Post by willthrill81 » Fri Aug 11, 2017 9:40 pm

kelway wrote:
willthrill81 wrote::wink: Our 'real' firebox is very well hidden.
It's in your attic beneath the insulation. It's a good choice!
Shhhhh..... :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

livesoft
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Re: Where To Put My Emergency Fund?

Post by livesoft » Fri Aug 11, 2017 9:44 pm

Nicolas wrote:
livesoft wrote:
Nicolas wrote:The problem in that case would come if having to sell in a down market. That's why it's nice to have a few bucks around so you can ride out bear markets without having to touch it.
I don't see that as much of a problem at all for millionaires (">> $1kk")
But selling low still hurts even if you've got a million bucks, and a million bucks isn't what it used to be.
But getting a piddly interest rate on cash while waiting for the improbable to happen has been proven to lose more money than selling low.
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BanditKing
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Re: Where To Put My Emergency Fund?

Post by BanditKing » Fri Aug 11, 2017 10:56 pm

I keep about 3 months in cash at Ally, about 6 months (currently) in iBonds, and another 15 months in VWIUX in my Vanguard taxable account. I have two years total, because I feel that is how long it might take for me to find re-employment in my field, which is fairly specific.

In a couple years, between increases in my iBonds, and general value of my taxable account, I may forgo VWIUX and just invest all of that, going on the idea that even if my taxable account took a 50% hit in the market, in a true emergency I would still have enough enough there even if I was selling below basis (which would suck, of course).

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Nicolas
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Re: Where To Put My Emergency Fund?

Post by Nicolas » Fri Aug 11, 2017 11:06 pm

livesoft wrote:
Nicolas wrote:
livesoft wrote:
Nicolas wrote:The problem in that case would come if having to sell in a down market. That's why it's nice to have a few bucks around so you can ride out bear markets without having to touch it.
I don't see that as much of a problem at all for millionaires (">> $1kk")
But selling low still hurts even if you've got a million bucks, and a million bucks isn't what it used to be.
But getting a piddly interest rate on cash while waiting for the improbable to happen has been proven to lose more money than selling low.
I agree what you say makes sense. I'll reconsider my position. I hate losing to inflation too.

digit8
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Re: Where To Put My Emergency Fund?

Post by digit8 » Sat Aug 12, 2017 5:54 pm

I love the idea of Ibonds....but moved my emergency fund over to a CD which takes additional deposits and has a small penalty for breaking it,held in the same credit union as my checking. Just decided the tradeoff of possibly losing some inflation protection for a simpler way to track everything was worth it.

Backstopping that, I've got Vanguard with target fund Roth, taxable VMFXX and VTSMX.

Add in the necessary evil of my Fido 401k account, and I've got all my financial needs covered by by 5 accounts with 3 institutions, down to 2 at retirement. Boom, done.
"You can't latte yourself to bankruptcy. The bladder won't allow it." | -Katherine Porter

longinvest
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Re: Where To Put My Emergency Fund?

Post by longinvest » Sat Aug 12, 2017 6:58 pm

Taylor Larimore wrote:
Fri Aug 11, 2017 7:34 pm
I do not have a separate, low-yielding, "emergency fund" that may never be used.

In the event I should need cash in hurry, I know I can get it from my bank account, credit card, portfolio, bank loan, family, etc..
I've adopted Taylor's simple approach.

He is right. I don't see any money need that I couldn't cover using either a credit card, money in my bank account, my next paycheck, or a portfolio withdrawal.
Bogleheads investment philosophy | Lifelong Portfolio: 25% each of (domestic/international)stocks/(nominal/inflation-indexed)bonds | VCN/VXC/VAB/ZRR

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