(Lack of) Emergency Fund - Are We Crazy?

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dabretty
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(Lack of) Emergency Fund - Are We Crazy?

Post by dabretty » Fri Mar 28, 2014 10:27 am

Hello all -

I thought I'd ask this question here as you guys were mighty helpful on another topic I posted a few weeks ago (re: Backdoor Roth).

My wife and I - both early 30s - have never really set up an "emergency fund". Meaning, we don't have a savings account loaded up with 6-9 months salary (or whatever the current advice is). Instead, we have just gone full-speed into investments. Sure, the lion's share of our money is in 401k and Roth accounts, but we still have about $70k sitting in a taxable brokerage account (TDAmeritrade, all invested in SPY), and we're still contributing each year to that account (after 401k, after IRA-Roth conversions for the year, and after our lone child's 529 plan). We also have wills and life insurance policies, hopefully making things quite comfortable for our son should something happen to us. Oh, and we always have a couple grand sitting around in our two checking accounts, but not that much as I like to keep on the focus on these other priorities.

My rationale is that, if we were to have an "emergency" and need access to money, my first target would be to close as much of the position in the aforementioned taxable account as needed, and perform an electronic funds transfer back into our bank. We've had good luck and never needed to do this (knock on wood), but I believe that I can get it all done within 3 or so business days. We also have access to credit cards (we carry no debt, but have a cumulative credit limit in plastic of about $55k), which to me makes the notion of having an "emergency" stash in a savings account seem more and more arcane.

This argument with an emergency fund, to me, boils down to "degree of emergency." I am an electrical engineer, and my wife a physician assistant, and we would be fine if we had to live on one salary for a while (say, due to injury, etc). At the same time I think the odds are near zero that both of us would find ourselves without work (and searching) at the same time, but even so, the previous paragraph sums up the plan I would execute if it came down to meeting our mortgage next month. If the emergency were worse - global economic meltdown, for example - then I think we have much bigger problems than what some (probably worthless) US currency in our hands can do.

What do you think? Are we crazy?

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bottlecap
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by bottlecap » Fri Mar 28, 2014 10:30 am

Just realize that your $70,000 might be $30,000 when you need it. Then selling and spending it locks in a $40,000 loss. The point of the emergency fund is to avoid buying high and selling low.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by The Wizard » Fri Mar 28, 2014 10:36 am

So long as both of you are gainfully employed with good job prospects and excess income, you should be fine.
This means possibly living on one salary for 4-6 weeks while the other one gets a new decently paying job.

I would still keep a modest cash buffer of $5000 or more to cover unexpected expenses, not true EMERGENCIES. This assumes you have good insurance in all the usual places so that if one car is totalled, you're covered, for example...
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by sunnyday » Fri Mar 28, 2014 10:37 am

dabretty wrote:
What do you think? Are we crazy?
I agree -- no need for an emergency fund. Definitely not crazy.

Great cash flow + two steady well paying jobs + large taxable account = no need for emergency fund

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by livesoft » Fri Mar 28, 2014 10:40 am

bottlecap wrote:Just realize that your $70,000 might be $30,000 when you need it. Then selling and spending it locks in a $40,000 loss. The point of the emergency fund is to avoid buying high and selling low.

JT
That's probably not quite true. I'll guess that whatever amount of SPY they sell, they could then exchange from a bond fund into an S&P500 index fund in their 401(k) & Roths.

Basically, the OP is doing the Placing Cash Needs in a Tax-Advantaged Account thing.
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dabretty
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by dabretty » Fri Mar 28, 2014 10:44 am

Cool, thanks for the responses. That has always been my thought, but I think it's hearing the tireless drone of "establish an emergency fund!" that made me question if we were being crazy.
bottlecap wrote:Just realize that your $70,000 might be $30,000 when you need it. Then selling and spending it locks in a $40,000 loss. The point of the emergency fund is to avoid buying high and selling low.
I understand what you're saying here, but the opportunity cost of say, sitting on $40k (in a savings account) starting two years ago versus having invested it into the S&P 500 index is immense. Sure, hindsight is 20/20, but I can't see sacrificing long-term (30 year) growth potential to cover for what would seem to be a low-probability event of us suddenly really needing it.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Angelus359 » Fri Mar 28, 2014 12:03 pm

I'd recommend getting 6 months of your life into a municipal bond fund in taxable
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by FelixTheCat » Fri Mar 28, 2014 12:12 pm

I say it's what makes you feel fine with your finances. Personally, I have 2 1/2 years of emergency funds.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by TareNeko » Fri Mar 28, 2014 12:17 pm

OP: I'm doing pretty much what you are doing at I think it is fine. Only recommendation is to keep 5-10k in your savings account for piece of mind.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Jack FFR1846 » Fri Mar 28, 2014 12:17 pm

It isn't the most conservative way to go, but if 50% of that money would hold you over for 6 months, then there's your emergency fund. Mine is in iBonds, but I've used iBonds for everything from a new car fund to a vacation fund. I've got them going back over 10 years, so can pull them out as I wish, paying only federal tax. I avoid my state tax. Mine are all paper (including my fed refund this year). With the problems of using treasury direct, I guess I'll have to soon find something beyond my credit union's 0.85% limited withdrawl account.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Easy Rhino » Fri Mar 28, 2014 12:40 pm

I'd maybe keep a few more grand around in case of an expensive car repair, or a medium sized home repair, just because it would be a pain to sell the stock and deal with capital gains.

But you're not being reckless. if you need money within 2 weeks you can get it and you have a buffer in the event of unemployment.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by grap0013 » Fri Mar 28, 2014 12:52 pm

Easy Rhino wrote:I'd maybe keep a few more grand around in case of an expensive car repair, or a medium sized home repair, just because it would be a pain to sell the stock and deal with capital gains.

But you're not being reckless. if you need money within 2 weeks you can get it and you have a buffer in the event of unemployment.
Yeah, but keeping it in stocks makes it more likely to go up.

Woud you rather?

Put 10K into savings and then withdraw 10K for home repair.

OR

Put 10K into SPY turn it into 12K by the time of said repair and then pay capital gains on the 2K profit?

Worrying a lot about capital gains is like saying I don't want to make 500K per year because the taxes would be terrible.

OP, your strategy looks good.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by cflannagan » Fri Mar 28, 2014 12:58 pm

Definitely not crazy. We have not had emergency fund for years, and had a couple of emergencies arise and we still covered those with no issues.

This is because we have several ways to handle emergencies: If the amount is sufficiently small (like a couple thousand or so), we just put it on CC, which we autopay every month anyway.

We also have I-Bonds (more than 3 years old) that we can sell off if needed, but never had to.

We have considerable amount in taxable account (invested into stocks). Even if this amount were to lose 50% value, it still is more than 6 months worth of living expenses.

Thus, we would rather have any amount of money doing some work for us (ie: be invested), than sitting idle.

But this does not mean it is right for everyone. For people just starting out (not much net worth, and not invested), emergency funds probably should not go into stocks yet.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Calm Man » Fri Mar 28, 2014 1:11 pm

I think you are fine. I think the concept of an emergency fund is more for a Suzy Orman type audience where she is concerned that these people will actually have no money available if needed.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by berntson » Fri Mar 28, 2014 1:15 pm

Another idea is to setup a bond barbell. This lets you cash on hand while having that cash do real work in your portfolio. So, for example, suppose that you would normally have $40,000 in intermediate bonds. Using a barbell, you could instead have $20,000 in long-term bonds and $20,000 in a savings account. As long as the average duration is the same, you'll get approximately the same returns with approximately the same risk. And you'll have $20,000 in an easily accessible account.

Of course, this only works if you have bonds in your portfolio and those bonds are not already long-term bonds.
Last edited by berntson on Fri Mar 28, 2014 1:16 pm, edited 1 time in total.

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rob
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by rob » Fri Mar 28, 2014 1:16 pm

Concept is not an issue but...... Keep in mind there is a delay selling stock before you can get cash in your hand...... I would suggest some account that is more liquid with a little in cash you need it quickly then fall back to the stock which you can convert into cash in say 3-5 days.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by jackholloway » Fri Mar 28, 2014 1:27 pm

The Wizard wrote:So long as both of you are gainfully employed with good job prospects and excess income, you should be fine.
This means possibly living on one salary for 4-6 weeks while the other one gets a new decently paying job.

I would still keep a modest cash buffer of $5000 or more to cover unexpected expenses, not true EMERGENCIES. This assumes you have good insurance in all the usual places so that if one car is totalled, you're covered, for example...
I had relations that were on the beach for a year after the defense drawdown of 1989, people I worked with who were out for 12-15 months in 2001, and people in my field that were looking for work for almost two years after 2008. Some of those friends lost both jobs at the same time.

Having two incomes makes it easier to plan, as your most likely catastrophe is a large expense followed by loss of a single income during a market downturn. Loss of both is less likely, unless you are mid-job-change just before, or your emergency is something that loses one of the two jobs. Since job losses are correlated with economic downturns, having an emergency followed by downturn and job loss are not a completely unreasonable scenario.

Consider too that over the long run, your 40k would not on average have grown to 52 over a year. It would have grown to 42k. That is your cost of insurance.

As long as you can weather that kind of storm, you are fine however you do it. Many people are buying i-bonds for this, while others use Roth or 401k loans, and a vocal minority seem to be using HELOCs (though many of those have surprise call provisions). If you have enough to survive in a taxable fund, then while you may lock in a loss, you are not likely to have your house foreclosed, nor to actually starve.

One approach some of my friends are using is to have a larger FI allocation than their risk tolerance requires, which then gives them "safer" money, but that has risks of its own.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by letsgobobby » Fri Mar 28, 2014 1:41 pm

not crazy, but as others have said for emergency purposes you only have a $35k taxable account. That's what a TSM portfolio will do in a downturn, when you are most likely to have an emergency. If $35k meets your emergency needs, then you're good.

Although I understand the rationale for your approach, and livesoft's, I have never fully embraced it. We hang out around 3 months spending in cash despite adequate taxable investments. It's probably irrational, and thus there is a cost to being human, but I sleep better with that money in a checking account rather than the $100 or $1000 that some do.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by sunnyday » Fri Mar 28, 2014 1:49 pm

Here's an interesting poll showing how rarely emergency funds used: http://www.bogleheads.org/forum/viewtop ... =2&t=93438

jackholloway wrote:
Consider too that over the long run, your 40k would not on average have grown to 52 over a year. It would have grown to 42k. That is your cost of insurance.
$2k per year is a lot for insurance. That's more than what my family pays for auto, home and umbrella insurance combined. People in excellent financial health (2 solid jobs, great cash flow, large taxable) don't need that insurance.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Clearly_Irrational » Fri Mar 28, 2014 1:59 pm

Taxable investments and roth principal are both acceptable forms of emergency funds, however due to their higher risk and somewhat lower liquidity I'd want at least some funds in bank deposits instead. Additionally, funds in the market should only be counted at half value. I wouldn't feel comfortable without at least 1.5 months worth of bank deposits. (The half month is because your account will be varying throughout the month as income comes in and payments go out, that way you always have at least one months worth even at the low point) Of course, I'm also the kind of person who doesn't keep all my cash at one bank (I keep about a months worth at a credit union) and keeps some actual physical cash in the safe in case there is a "bank holiday".

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by dratkinson » Fri Mar 28, 2014 2:14 pm

Under the "many road to Dublin" concept, your idea is okay.

But I don't like the idea of thinking of any tax-advantaged account as an emergency fund. Yes, you can take the money out, but you can not refill the account afterwards. I believe an emergency fund should be refillable.

Therefore I believe it would be wise to extend your investing with liquid, low-volatility funds in a refillable account. This means the account will be taxable. This means the funds will be bonds. And in your probably-higher 2-income tax bracket the bond fund should be tax-exempt. (Consider a state-specific TE bond fund if appropriate for your state.)

If you can withstand the volatility of stock funds as an EF, then you will love the reduced volatility of bond funds as an EF.

You need bonds anyway, so above TE bonds become a part of your bond allocation (or total bond allocation if you like), and your 1st-tier emergency fund. Plan to tap these bonds before you tap any tax-advantaged account. The effect should be the same as taping bonds in tax-advantaged, just this account will be refillable.

This method also supports the advice of those who say we should "shoot for the moon" in our retirement accounts, meaning: no bonds in our retirement accounts.

Bottom line. Your EF method will work and is advocated by many. But I believe you can accomplish the same goal with reduced risk to your retirement accounts by using a refillable account containing TE bonds as your first- (if you don't have savings/MMkt/CDs/savings bonds) or second-tier EF.



Full disclosure: My only bonds are in taxable: TE bonds and savings bonds. They are my total bond allocation and 2nd-tier emergency funds (after: savings/MMkt/CDs). I use national funds VWLUX (LT TE) and VWIUX (IT TE).
Last edited by dratkinson on Fri Mar 28, 2014 3:15 pm, edited 1 time in total.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Leif » Fri Mar 28, 2014 2:20 pm

The emergency could be something other than a job loss. Any sudden emergency need. Most could be handled via a credit card for a while. However, car break down, roof leaking, major appliance fails, extended family needs, etc. However, it is what you can sleep with after considering what could happen.

I do believe that Murphy was a wild eyed optimist.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by dstac » Fri Mar 28, 2014 2:24 pm

Clearly_Irrational wrote:Taxable investments and roth principal are both acceptable forms of emergency funds, however due to their higher risk and somewhat lower liquidity I'd want at least some funds in bank deposits instead. Additionally, funds in the market should only be counted at half value. I wouldn't feel comfortable without at least 1.5 months worth of bank deposits. (The half month is because your account will be varying throughout the month as income comes in and payments go out, that way you always have at least one months worth even at the low point) Of course, I'm also the kind of person who doesn't keep all my cash at one bank (I keep about a months worth at a credit union) and keeps some actual physical cash in the safe in case there is a "bank holiday".
That's our general aim: minimum of 1mo expenses in checking, typically closer to 2mos. Just makes day-to-day cash management that much less stressful. Besides there are always "minor emergencies" that an extra month's expenses covers - think medical, transportation, repairs, unplanned travel. We do put everything on credit cards that are paid off each month so in theory that is our secondary back-up.

Like most financially aware people we have tiers of safety. Going down those tiers comes ibonds and Roth IRA before getting to other loans & unleveraged assets. I think the idea of a specific emergency fund indeed becomes more archaic, but not over time, but rather as you move up the wealth ladder. You can have more stashes of funds as you have more funds.

I do think the tiers of safety are also related to taking on risk in other areas of life. I have separate set-asides for other business needs independent of personal needs (also known as a reserve fund despite the business being tied only to me). But that's probably just me choosing to limit risk in cash management so I can take it on with other ventures.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Phineas J. Whoopee » Mon Mar 31, 2014 5:26 pm

As long as you never encounter a very serious emergency, no.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by MathWizard » Mon Mar 31, 2014 5:45 pm

No, you are not crazy. You will likely take a big loss at some time, but you will likely be up enough
so that even with the loss, you may be ahead of using a savings account. Just think of
the emergency fund being about half the size that it really is, so that you can withstand a 50% market
drop along with layoffs and CC's and lines of credit being cancelled as happened in 2008/2009.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Clearly_Irrational » Mon Mar 31, 2014 5:49 pm

MathWizard wrote:Just think of
the emergency fund being about half the size that it really is, so that you can withstand a 50% market
drop along with layoffs and CC's and lines of credit being cancelled as happened in 2008/2009.
I count CC's and lines of credit at zero value since they can be canceled at any time. Sure, they're useful, but they won't be available when you actually need them. For good or ill you can only borrow money if you don't need it.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Leif » Mon Mar 31, 2014 7:11 pm

MathWizard wrote:...CC's and lines of credit being cancelled as happened in 2008/2009.
I heard of HELOCs being cut, but I had not heard of CC limits being reduced/cancelled. It did not happen to me in 2008-9, but I guess that does not mean it will never happen to me. Perhaps since I pay them off each month I was not hit.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by dublin » Mon Mar 31, 2014 8:10 pm

I do something similar, so I don't think you're crazy, although my version is a bit more conservative - I have around $1k in my checking account, $1k in a savings account, and otherwise I just keep my bond allocation in my Roth IRA and sleep fine at night knowing I can withdraw a substantial amount of money if needed, and since it's in bonds, I'm not so worried about the market crashing at the same time as my hypothetical personal emergency. I'm much happier knowing that my money continues to work for me in the scenario where in fact I'm lucky enough not to need a massive amount of cash in a true emergency. Although I will say that I decided to have a slightly higher bond allocation (15% vs. 10%) in part due to using this strategy and needing to make sure there was a sufficient dollar amount of bonds in the Roth.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by travellight » Mon Mar 31, 2014 8:36 pm

I also don't have an EF. I have two helocs as my EF, and probably 70-90k of cc access.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by bvp » Mon Mar 31, 2014 9:11 pm

Stock market is up, I guess.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by billern » Mon Mar 31, 2014 9:19 pm

I do this but don't have a mortgage or dependents. I'd like to think I'd have a less aggressive position if I had large fixed monthly costs and/or people who rely on me. It would lower the stress and potential issues substantially which is worth something.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by technovelist » Mon Mar 31, 2014 10:05 pm

rob wrote:Concept is not an issue but...... Keep in mind there is a delay selling stock before you can get cash in your hand...... I would suggest some account that is more liquid with a little in cash you need it quickly then fall back to the stock which you can convert into cash in say 3-5 days.
If you have a margin account you can get money out almost immediately if it isn't more than the margin limits. So if you have a $50k account and need $10k-$20k right away, you can sell and transfer the money the same day, paying only a small amount of interest until the trade settles.

The risk of a margin call in this situation is miniscule, although not completely impossible, because your position would have to go down below the margin limits before the trade settles, which is three days. But even in that case you would have more money than you would have had without selling.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Clearly_Irrational » Mon Mar 31, 2014 10:52 pm

travellight wrote:I also don't have an EF. I have two helocs as my EF, and probably 70-90k of cc access.
Just FYI, during the last crash my heloc credit was recinded. My credit was excellent and this was before the house went down in value, they just wanted to limit their exposure.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by travellight » Mon Mar 31, 2014 11:15 pm

Yes, I would not feel comfortable with just one typical heloc either. That is why I have two and the second one is a unique loan that resembles a heloc but isn't that exactly.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Bounca » Tue Apr 01, 2014 6:15 am

Personally, I have 2 1/2 years of emergency funds.
Someones ready for a zombie apocolypse. :shock: :confused

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by kaudrey » Tue Apr 01, 2014 7:32 am

I keep between $5K and $15K in our savings account, and then invest the rest in taxable. Between a HELOC and our credit cards, if we were in a true emergency and we needed money today, those could cover it. I keep the smallish amount of cash in savings because I don't want to have to sell high if I don't have to, as others have noted. Bad for taxes! But, the money is there if we need it.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by IMD801 » Tue Apr 01, 2014 7:35 am

Our approach: what's the largest potential expense for which we don't have insurance? Emergency fund = that $ amount.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Longtimelurker » Tue Apr 01, 2014 8:08 am

OP - you have an Emergency Fund. You simply refuse to call it such, and accept more volatility than most.

I don't have a separate Emergency Fund, but I do have about 3 years of expenses in iBonds and Brokerage. This assumes 0 income for myself and my wife - including an assumption of no unemployment insurance.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by investingdad » Tue Apr 01, 2014 8:20 am

dabretty wrote:I am an electrical engineer, and my wife a physician assistant, and we would be fine if we had to live on one salary for a while (say, due to injury, etc). At the same time I think the odds are near zero that both of us would find ourselves without work (and searching) at the same time,

What do you think? Are we crazy?
I think if you truly believe the chances of you both being out of work at the same time are "near zero" you may be fooling yourselves. It's also a lot easier to fool yourselves when cash flows are positive to your bank account and markets are up.

Is your plan workable? Probably.

But let's say you're a magical investor that can get 10% a year, every year. On a 10K cash account that's $850 in lost income (gotta pay taxes on your 10% yearly gain). Is an $850 premium really to much money for an insurance policy on your liquidity if things go south? Only you know the answer to that.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by DFWinvestor » Tue Apr 01, 2014 9:17 am

I've got a money market earning just 0.7%, with enough for us to get by for six months. It's been sitting there for several years and I have been considering putting it all into my taxable account in municipal bonds.

Seems like a reasonable approach to me.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by MnD » Tue Apr 01, 2014 9:38 am

dabretty wrote:Cool, thanks for the responses. That has always been my thought, but I think it's hearing the tireless drone of "establish an emergency fund!" that made me question if we were being crazy.
We have similar job security and in 30 years have never had a cash emergency fund. What we've earned in a near 100% equity taxable account over 30 years is very substantial. Account is larger than it's ever been and a portion of earnings has been used to purchase new vehicles, substantial chunks of college education and significant remodels.

When we've tapped the taxable account we simultaneously buy equities in other accounts so the concern expressed about "selling at the bottom" is not a real one assuming you have other larger accounts you can adjust with. And we have no shortage of credit lines with grace periods for very short-term needs. And other less liquid accounts are now many multiples of the taxable account.

The median US household has $3000 in retirement savings (and many households have a ton of debt) so the tireless drone of establishing this huge cash emergency fund is not bad general advice. But you need to consider your own individual circumstances.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by SC Hoosier » Tue Apr 01, 2014 10:20 am

I found a benefit of having an emergency fund that is difficult to quantify: My wife feels safer and more secure with it. When she is happier, I'm happier.

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by Angelus359 » Tue Apr 01, 2014 11:34 am

I'd take 30k, and place it in a vanguard high yield municipal bond fund.
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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by poker27 » Tue Apr 01, 2014 1:13 pm

All depends on your comfort level. I have a 3ish tier of Emergency funds. Online savings account, I Bonds (which I just got into late last year), and taxable bonds. They would get raided in that order. I might keep more then I need and sacraifce future returns, but I have a potentially risky income, and if I were to ever lose my job (knock on wood) I would probably want to spend some coin and travel

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Re: (Lack of) Emergency Fund - Are We Crazy?

Post by IlliniDave » Tue Apr 01, 2014 2:34 pm

What you're doing seems okay to me. It's not something I'd be comfortable with for myself, mostly because I like to have a first level of backup cash I can access "today" with a backup tier invested in bonds. Beyond that I do have taxable equities (all assets are the emergency fund at some level, just a matter of how deep the emergency takes me).
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