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Brokerage Account as Part of Emergency Account
Posted on 8/5/14 at 6:52 pm
Posted on 8/5/14 at 6:52 pm
Ive been doing this for a while now and wonder if anyone else does. I have read through some other post on here discussing the use of a roth and other types of accounts. Ive been putting about 1/3 of our emergency fund in my brokerage account buying commission free etfs. Most of it goes into USMV. A minimum volatility large cap etf. I also put some in SHY and TIP, a 1-3 year treasury etf and a tips bond etf. The money is fairly liquid. We put about 400 a month in the emergency fund, so about 130 goes into these etfs on average every month although some months Ill put more or less depending on what the prices are at. As long as the shares I would sell if an emergency came up would also be commission free since they have been held for over 30 days as is the policy for my brokerage account.
The other 2/3 go into a standard savings account connected to our checking.
Im thinking about starting to put about half instead of 1/3 from here on out now that the wife found a position.
Just wondering if anyone does the same thing or has any opinions on this practice.
Thanks.
The other 2/3 go into a standard savings account connected to our checking.
Im thinking about starting to put about half instead of 1/3 from here on out now that the wife found a position.
Just wondering if anyone does the same thing or has any opinions on this practice.
Thanks.
Posted on 8/5/14 at 8:54 pm to ragacamps
Personally I have almost nothing in my checking account. I don't have a savings account.
Just me, but if your brokerage account is liquid, and you get immediate ACH transfers to your checking account, why not?
Just me, but if your brokerage account is liquid, and you get immediate ACH transfers to your checking account, why not?
Posted on 8/5/14 at 9:19 pm to Iowa Golfer
Thats what Im thinking. The funds may take a day or two at most and without having to worry about commission, I see it as smart place to tuck away some extra cash in case an emergency arises.
Posted on 8/5/14 at 9:55 pm to ragacamps
As long as the money is relatively "safe", it really doesn't matter. Instant transfers are a huge plus to this arrangement, but not really necessary IMO.
Only thing to possibly be careful of is if you make frequent trades, your brokerage may put restrictions on your account. I use Sharebuilder for some investments, tried to make some plays around election time, and got my account partially frozen for some time.
Only thing to possibly be careful of is if you make frequent trades, your brokerage may put restrictions on your account. I use Sharebuilder for some investments, tried to make some plays around election time, and got my account partially frozen for some time.
Posted on 8/5/14 at 10:18 pm to ragacamps
Do you use Ameritrade?
(doesn't seem like a terrible idea IMO)
(doesn't seem like a terrible idea IMO)
Posted on 8/6/14 at 9:16 am to ragacamps
I have a low-interest line of credit attached to my brokerage account. I can leave the investments in place and borrow against them at around 4% if I need money in a pinch.
Posted on 8/6/14 at 9:30 am to jeepfreak
I have a fidelity brokerage account. I buy 3 of the 65 no commission etfs offered. Most goes into USMV.
Posted on 8/12/14 at 6:03 am to ragacamps
Thinking of using some corporate and muni etfs along with the other etfs
Posted on 8/12/14 at 6:20 am to ragacamps
quote:
The funds may take a day or two at most and without having to worry about commission
This is why I keep some bucks in my bank's savings account.
When our son was 3 months old I found out his health insurance had been dropped due to an administrative f up. They said it would take a week before he was put back on it. At that point I realized if a serious accident happened I would need to have funds at my disposal to pay cash at the hospital.
I also live in NOLA so that means I'm subject to arrest at any time for looking at a cop wrong and may need bail money.
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