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Message
re: Emergency Fund
Posted on 3/20/14 at 12:06 pm to Volvagia
Posted on 3/20/14 at 12:06 pm to Volvagia
quote:
If you invest as part of your emergency fund it is very important that it be by itself, and not just a part of a larger pot.
Great point. Doesn't seem to get brought up in these discussions much.
This post was edited on 3/20/14 at 12:07 pm
2
Posted on 3/20/14 at 1:00 pm to GoCrazyAuburn
My concern with this line of thinking is not whether or not you will have access to the funds, it is what the fund balance will be.
An emergency fund is a pot of money that can be tapped in an emergency. It doesn't do a tremendous amount of good - the way I look at it - to have it subject to the risk of the market.
So, if you were going to invest your emergency fund, I would reccomend a very safe plain vanilla investment - something not likely to have large swings in value. Of course, something like that won't have much of a payout. Plus, you would want to find an account/investment with little or no fees and charges.
An emergency fund is a pot of money that can be tapped in an emergency. It doesn't do a tremendous amount of good - the way I look at it - to have it subject to the risk of the market.
So, if you were going to invest your emergency fund, I would reccomend a very safe plain vanilla investment - something not likely to have large swings in value. Of course, something like that won't have much of a payout. Plus, you would want to find an account/investment with little or no fees and charges.
Posted on 3/20/14 at 1:30 pm to GoCrazyAuburn
quote:
Great point. Doesn't seem to get brought up in these discussions much.
Doesn't seem like that big a deal. You can just separate it out by buying into a different fund than the rest of your holdings. A holding that I imagine has a healthy bond allocation for stability.
For example, if you retirement accounts are all Index ETFs (VTI, VWO, VEA, VXUS, VSS, etc), you can "mix" your emergency fund in there with STAR, Wellesley or whatever else people like.
This post was edited on 3/20/14 at 1:32 pm
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