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Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 1:47 pm
by bck63
I'm just wondering if anyone has experience with using the Betterment Safety Net for an emergency fund. If so, has it worked for you?

For my emergency fund I use a separate Fidelity cash management account, and have cash/short-term treasury index fund/15% S&P 500 index fund. Does anyone do anything similar?

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 1:50 pm
by KlangFool
bck63 wrote: Sun Jun 14, 2020 1:47 pm I'm just wondering if anyone has experience with using the Betterment Safety Net for an emergency fund. If so, has it worked for you?

For my emergency fund I use a separate Fidelity cash management account, and have cash/short-term treasury index fund/15% S&P 500 index fund. Does anyone do anything similar?
Not me. Only CASH/Checking Account/MMF qualifies for me as an emergency fund. Anything that the nominal value can drop below $1 does not work for me.

KlangFool

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 2:32 pm
by puc_ytpme
bck63 wrote: Sun Jun 14, 2020 1:47 pm I'm just wondering if anyone has experience with using the Betterment Safety Net for an emergency fund. If so, has it worked for you?

For my emergency fund I use a separate Fidelity cash management account, and have cash/short-term treasury index fund/15% S&P 500 index fund. Does anyone do anything similar?
I do it & understand that it is apart of my overall portfolio even though I don’t view it as such(mental accounting). It is held separately at a different brokerage from my main account. Both are taxable accounts & I kept in mind not to use etfs that I would
Tax Loss Harvest with in my main account. Yet still provided diversification

I went 50/50 AA split.
Vone-35%
Efav-15%
Ief-35%
Gsy-15%

It has worked out for me. YMMV, based on one’s tolerance, perspective & emotional behavior. Experience & time will let you know if it has worked out for you. In reality, what I’ve experienced is, simplicity more often than not beats complexity. Smarter not harder!

Best regards

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 2:35 pm
by puc_ytpme
viewtopic.php?t=285783

If you get a few

Best regards

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 2:40 pm
by Triple digit golfer
It is just mental accounting. Holding a larger emergency fund but taking more risk is silly to me. See my post here:

viewtopic.php?f=10&t=309472&start=50#p5133698

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 3:29 pm
by bck63
Triple digit golfer wrote: Sun Jun 14, 2020 2:40 pm It is just mental accounting. Holding a larger emergency fund but taking more risk is silly to me. See my post here:

viewtopic.php?f=10&t=309472&start=50#p5133698
I hear you. Thanks for the link. I spend hours thinking about this stuff, which is a waste of time. But at least I'm not selling stocks.

Here's my other idea. Instead of using just the Fidelity Treasury MMF at .42% ER, I can make the "cash" portion of my emergency fund half the MMF and half the short-term Treasury index fund (FUMBX, ER .03%). That make the total ER 0.225% with an average duration of only 1.33 years (FUMBX duration is 2.66 years).

Now that one might be a good idea. I hate paying .42% for a Fidelity MMF.

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 3:36 pm
by anon_investor
bck63 wrote: Sun Jun 14, 2020 3:29 pm
Triple digit golfer wrote: Sun Jun 14, 2020 2:40 pm It is just mental accounting. Holding a larger emergency fund but taking more risk is silly to me. See my post here:

viewtopic.php?f=10&t=309472&start=50#p5133698
I hear you. Thanks for the link. I spend hours thinking about this stuff, which is a waste of time. But at least I'm not selling stocks.

Here's my other idea. Instead of using just the Fidelity Treasury MMF at .42% ER, I can make the "cash" portion of my emergency fund half the MMF and half the short-term Treasury index fund (FUMBX, ER .03%). That make the total ER 0.225% with an average duration of only 1.33 years (FUMBX duration is 2.66 years).

Now that one might be a good idea. I hate paying .42% for a Fidelity MMF.
Why not use not penalty CDs? You can find them at Ally, Marcus and CIT all earning over 1% with FDIC insurance. I have been using no penalty CDs at Ally (where I also have checking and savings) for my emergency fund.

Re: Betterment Safety Net for Emergency Fund?

Posted: Sun Jun 14, 2020 8:33 pm
by nix4me
The betterment safety net is 13 ETFs - for a 15/85 mix of Stocks/Bonds.

You can easily replicate it with 15/85 mix of any SP500 or total stock ETF like VOO and any short term bond/treasury fund(s).

Re: Betterment Safety Net for Emergency Fund?

Posted: Wed Jun 17, 2020 11:17 am
by Cam_949
nix4me wrote: Sun Jun 14, 2020 8:33 pm The betterment safety net is 13 ETFs - for a 15/85 mix of Stocks/Bonds.

You can easily replicate it with 15/85 mix of any SP500 or total stock ETF like VOO and any short term bond/treasury fund(s).
Just an FYI that the new Betterment Safety Net is 15/85 but the old is a 60/40 (Bonds/Equities). The account has performed just over 5% the last few years but might suggest just using a high savings account such as Ally or Capital One. Less risk and no need to liquidate if you need the cash.