Where To Park Your Emergency Fund At Vanguard?

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zimrod
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Where To Park Your Emergency Fund At Vanguard?

Post by zimrod » Sun Sep 03, 2017 5:33 pm

If you have want to park your emergency fund into a Vanguard fund, what do you think would be the best and safest choice? Personally, I keep my EF Vanguard Federal Money Market Fund VMFXX. I know Vanguard itself recommends the Prime Money Market Fund. Yet are there any other options consider with them? Just curios here.

aristotelian
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by aristotelian » Sun Sep 03, 2017 5:41 pm

I have ours in Prime MM, with the next tier in Short Term Corporate ETF (VCSH) as well as my state muni bond fund (VOHIX). I am contemplating getting rid of the VCSH and splitting it into Prime MM and VOHIX. I know a lot of people like the security of FDIC savings accounts, but I like the convenience of everything together at VG.

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aramv
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by aramv » Sun Sep 03, 2017 6:24 pm

Generally speaking, people don't usually need their emergency fund all at once. I have 2 months expenses in CASH and 10 months expenses in Betterment 40/60 .

MJW
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by MJW » Sun Sep 03, 2017 6:43 pm

You might want to check out this post here: viewtopic.php?f=1&t=225741&p=3493959#p3493715 to read the many, many threads started by another forum member on this subject and all of the responses he received.

I think it could be very helpful to you, as you and he have a lot in common: same age, same state of residence, same tax bracket, same tax filing status, same investment allocations and other misc. financial info. Looks like you joined the forum on the same day he was "outed," so you might have just missed him. But hopefully he has already done the difficult work for you, and you can reap the benefits of the generosity from those that took the time to try to help him.

zimrod
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by zimrod » Sun Sep 03, 2017 10:29 pm

MJW wrote:
Sun Sep 03, 2017 6:43 pm
You might want to check out this post here: viewtopic.php?f=1&t=225741&p=3493959#p3493715 to read the many, many threads started by another forum member on this subject and all of the responses he received.

I think it could be very helpful to you, as you and he have a lot in common: same age, same state of residence, same tax bracket, same tax filing status, same investment allocations and other misc. financial info. Looks like you joined the forum on the same day he was "outed," so you might have just missed him. But hopefully he has already done the difficult work for you, and you can reap the benefits of the generosity from those that took the time to try to help him.
No, this isn't for me. I am just want to hear what people have to say is all.

wassabi
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by wassabi » Mon Sep 04, 2017 7:19 am

zimrod wrote:
Sun Sep 03, 2017 10:29 pm
MJW wrote:
Sun Sep 03, 2017 6:43 pm
You might want to check out this post here: viewtopic.php?f=1&t=225741&p=3493959#p3493715 to read the many, many threads started by another forum member on this subject and all of the responses he received.

I think it could be very helpful to you, as you and he have a lot in common: same age, same state of residence, same tax bracket, same tax filing status, same investment allocations and other misc. financial info. Looks like you joined the forum on the same day he was "outed," so you might have just missed him. But hopefully he has already done the difficult work for you, and you can reap the benefits of the generosity from those that took the time to try to help him.
No, this isn't for me. I am just want to hear what people have to say is all.
The link MJW gives you many answers to the question you asked.

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abuss368
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by abuss368 » Mon Sep 04, 2017 7:57 am

zimrod wrote:
Sun Sep 03, 2017 5:33 pm
If you have want to park your emergency fund into a Vanguard fund, what do you think would be the best and safest choice? Personally, I keep my EF Vanguard Federal Money Market Fund VMFXX. I know Vanguard itself recommends the Prime Money Market Fund. Yet are there any other options consider with them? Just curios here.
Hi zimrod -

We have cash invested in the Vanguard Prime Money Market fund in a separate account. We do not use a tier or ladder approach but rather prefer to keep it simple. I understand the money market fund is not FDIC insured. I have no problem with having a simple bank savings account, and did for years, however the interest paid was essentially next to nothing.

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

lostdog
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by lostdog » Mon Sep 04, 2017 8:10 am

We have it in the short term corporate bond index. The yield is 2% which is on part with inflation.
"Our life is frittered away by detail. Simplify, simplify." -Thoreau | Vanguard Total World Index

Porter01
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by Porter01 » Mon Sep 04, 2017 8:14 am

Tax free municipal bonds for me.

zimrod
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by zimrod » Mon Sep 04, 2017 11:52 am

lostdog wrote:
Mon Sep 04, 2017 8:10 am
We have it in the short term corporate bond index. The yield is 2% which is on part with inflation.
How's that working out for you? Doesn't the NAV price fluctuate a lot more than say the Vanguard Short-term Bond fund?

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welderwannabe
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by welderwannabe » Mon Sep 04, 2017 12:04 pm

zimrod wrote:
Mon Sep 04, 2017 11:52 am
How's that working out for you? Doesn't the NAV price fluctuate a lot more than say the Vanguard Short-term Bond fund?
The NAV on that short term corporate has only varied 2% over the last 12 months. That is +/- $100 on a $10K investment. That is nothing in the scheme of things.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Taylor Larimore
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by Taylor Larimore » Mon Sep 04, 2017 12:58 pm

zimrod wrote:
Sun Sep 03, 2017 5:33 pm
If you have want to park your emergency fund into a Vanguard fund, what do you think would be the best and safest choice? Personally, I keep my EF Vanguard Federal Money Market Fund VMFXX. I know Vanguard itself recommends the Prime Money Market Fund. Yet are there any other options consider with them? Just curios here.
zimrod:

I do not have a separate low-yielding "emergency fund" that I may never need.

It is hard to imagine an emergency that requires a large amount of immediate cash, but if it happens I can obtain cash from my ATM, my credit card, my portfolio, a bank loan, family loan, etc.

It is a myth that everyone should have a separate "emergency fund."

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

indexonlyplease
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by indexonlyplease » Mon Sep 04, 2017 2:04 pm

Ally Bank has a 5 yr cd paying 2.25%. Penalty 5 months. I would think you could put money there that you don't want to put in the market. 5 months go by you can cash out at anytime. If some emergency occurred. Then just put some savings in Vanguard Prime Money Market paying 1.10%

I would also think this is part of your fixed income??

zimrod
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by zimrod » Mon Sep 04, 2017 11:48 pm

indexonlyplease wrote:
Mon Sep 04, 2017 2:04 pm
Ally Bank has a 5 yr cd paying 2.25%. Penalty 5 months. I would think you could put money there that you don't want to put in the market. 5 months go by you can cash out at anytime. If some emergency occurred. Then just put some savings in Vanguard Prime Money Market paying 1.10%

I would also think this is part of your fixed income??
Isn't there a lot of risk in terms of red tape (trying to get your money out ASAP) when it comes into putting your EF into a CD like this?

mega317
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by mega317 » Tue Sep 05, 2017 1:47 am

zimrod wrote:
Mon Sep 04, 2017 11:48 pm
indexonlyplease wrote:
Mon Sep 04, 2017 2:04 pm
Ally Bank has a 5 yr cd paying 2.25%. Penalty 5 months. I would think you could put money there that you don't want to put in the market. 5 months go by you can cash out at anytime. If some emergency occurred. Then just put some savings in Vanguard Prime Money Market paying 1.10%

I would also think this is part of your fixed income??
Isn't there a lot of risk in terms of red tape (trying to get your money out ASAP) when it comes into putting your EF into a CD like this?
I wouldn't worry about the speed with which you can get the money out. Again you are not going to need the whole thing at once. Some have cited the risk of a bank not letting you close a CD early which is possible. But if risks at this level worry you then your only option is FDIC insured savings accounts.

But the OP's question was limited to Vanguard. I'd recommend federal over prime because OP is worried about tiny risks.

DireStraits
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by DireStraits » Wed Sep 06, 2017 7:20 am

Taylor Larimore wrote:
Mon Sep 04, 2017 12:58 pm
zimrod wrote:
Sun Sep 03, 2017 5:33 pm
If you have want to park your emergency fund into a Vanguard fund, what do you think would be the best and safest choice? Personally, I keep my EF Vanguard Federal Money Market Fund VMFXX. I know Vanguard itself recommends the Prime Money Market Fund. Yet are there any other options consider with them? Just curios here.
zimrod:

I do not have a separate low-yielding "emergency fund" that I may never need.

It is hard to imagine an emergency that requires a large amount of immediate cash, but if it happens I can obtain cash from my ATM, my credit card, my portfolio, a bank loan, family loan, etc.

It is a myth that everyone should have a separate "emergency fund."

Best wishes.
Taylor
Glad I'm not the only one who has questioned this logic.

Thanks for posting Taylor.

Cheers,
Rodney

AlbertEinstein
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by AlbertEinstein » Mon Sep 11, 2017 10:08 am

zimrod wrote:
Sun Sep 03, 2017 5:33 pm
If you have want to park your emergency fund into a Vanguard fund, what do you think would be the best and safest choice? Personally, I keep my EF Vanguard Federal Money Market Fund VMFXX. I know Vanguard itself recommends the Prime Money Market Fund. Yet are there any other options consider with them? Just curios here.
I think you need to distinguish between an "emergency" fund where you need to access the whole thing in a short period of time, i.e. 30 days, and a "foul weather" fund intended to fund you living expenses during a prolonged market decline (let's assume multiple asset classes decline like in 2008).

CantPassAgain
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Re: Where To Park Your Emergency Fund At Vanguard?

Post by CantPassAgain » Mon Sep 11, 2017 1:43 pm

MJW wrote:
Sun Sep 03, 2017 6:43 pm
You might want to check out this post here: viewtopic.php?f=1&t=225741&p=3493959#p3493715 to read the many, many threads started by another forum member on this subject and all of the responses he received.

I think it could be very helpful to you, as you and he have a lot in common: same age, same state of residence, same tax bracket, same tax filing status, same investment allocations and other misc. financial info. Looks like you joined the forum on the same day he was "outed," so you might have just missed him. But hopefully he has already done the difficult work for you, and you can reap the benefits of the generosity from those that took the time to try to help him.
As someone who actually made an effort and spent time trying to help this person, I would hope it would start to dawn on them how others would be annoyed to see that their efforts were completely wasted.

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