Vanguard Short-Term Bond Index For Emergency Fund?

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rattlenap
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Vanguard Short-Term Bond Index For Emergency Fund?

Post by rattlenap » Tue Aug 15, 2017 12:29 pm

What are your thoughts on someone using the Vanguard Short-Term Bond Index Fund (VBIRX) for parking their Emergency Fund in a taxable account? Do any of you do this?

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friar1610
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by friar1610 » Tue Aug 15, 2017 12:37 pm

I have a "first level" and a "second level" emergency fund. First level is in a CU MM account. Second level is in VG Short-Term Bond Index. First level would be used for a true emergency; second level would be, for example, for a new car in a year or so.
Friar1610

Big Dog
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by Big Dog » Tue Aug 15, 2017 12:44 pm

for taxable, I use the Vanguard California tax-exempt bond fund.

chevca
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by chevca » Tue Aug 15, 2017 12:48 pm

Sounds fine. But, why? Looks like the fund has a SEC yield of 1.57%. An online savings account gives about 1.15% APY. I'm not worried about making money on my EF enough to concern myself with that difference. Unless one keeps an abnormally large EF, it's likely to make very little difference in earnings or growth on say, $15-20k. Keep it simple.

Rattle, you have made a couple post about this lately trying to maximize the EF. Maybe you don't want or need an EF, or don't like the minimal growth the safe places give? Maybe just invest according to your AA and if an emergency comes up withdraw from your investments?

mega317
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by mega317 » Tue Aug 15, 2017 12:51 pm

Rattlenap: you have posted multiple times about your emergency fund. Last week you specifically said VBIRX is too risky for you. What else do you want to hear?

What do you do for work? You might be able to make way WAY more money working one extra shift or a little overtime than you would by super-maximizing your emergency fund.

rkhusky
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by rkhusky » Tue Aug 15, 2017 12:56 pm

I use Vanguard's Short Term, Limited and Intermediate Tax Exempt funds for an emergency fund and as part of my asset allocation. If my marginal rate was lower, I would have little qualms about using Short Term Bond as part of my EF.


chevca
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by chevca » Tue Aug 15, 2017 1:07 pm

More than the couple I mentioned, huh? :happy

Rattle, quit overthinking this. There are certainly more important things to worry about in your finances than your EF. Pick something and move on.

I guess if they're down to worrying this much about the EF, maybe the rest of the finances are quite squared away though?

mega317
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by mega317 » Tue Aug 15, 2017 1:09 pm

Thank you for finding those old threads. That post is a service to the forum and maybe to the OP.

I haven't read all of those threads but I would be interested to hear OP's exact concern, and to see the numbers (size of EF, tax bracket) to show him/her how little it matters.

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weltschmerz
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by weltschmerz » Tue Aug 15, 2017 2:02 pm

goingup wrote:
Tue Aug 15, 2017 1:01 pm
rattlenap-
My advice is to reread the responses to all these threads you started about options for an Emergency Fund. Surely there is a answer therein that will suffice.
Wow that is a lot of threads started by rattlenap on the same topic! Perhaps they just want an updated view on what the best emergency fund is today, especially in light of the recent increases in interest rates. In that case, I would recommend just reviving the discussion in one of the most recent threads. No need to keep starting new threads asking the same question over and over.

As far as emergency funds go, I like the Treasury Money Market Fund (VUSXX). No fluctuation in the share price, no capital gains to track, no FDIC limits, and the yield is exempt from state taxes. Probably THE safest place to keep your money, but with that safety, you also get the lowest yields.

MJW
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by MJW » Tue Aug 15, 2017 3:29 pm

In this thread you indicated that you are already using a short term bond find, albeit a tax-exempt one: viewtopic.php?f=1&t=225664#p3492123

You appear to be struggling to make up your mind on some aspects of your investment philosophy and enjoy putting a lot of "stuff" out there for feedback to see how many different answers you'll get. There's nothing wrong with having questions or being unsure, but given the generosity of so many members of this forum in responding to posts, this approach seems disingenuous.

Valuethinker
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Re: Vanguard Short-Term Bond Index For Emergency Fund?

Post by Valuethinker » Tue Aug 15, 2017 5:09 pm

MJW wrote:
Tue Aug 15, 2017 3:29 pm
In this thread you indicated that you are already using a short term bond find, albeit a tax-exempt one: viewtopic.php?f=1&t=225664#p3492123

You appear to be struggling to make up your mind on some aspects of your investment philosophy and enjoy putting a lot of "stuff" out there for feedback to see how many different answers you'll get. There's nothing wrong with having questions or being unsure, but given the generosity of so many members of this forum in responding to posts, this approach seems disingenuous.
You are sir, a gentleman.

Most of us could not have managed to say such a thing in such a polite and measured way.

Vt tips his hat to you ;-).

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