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2nd year associate here—I’m very risk tolerant and over-invest so I rarely have more than an extra 2-3k that isn’t allocated to spending or investing. The way I see it is that in the event something goes wrong I can dip into my investments and prefer to tolerate the risk for the return.
Mentor
I’m a fifth year and do this as well - I’ll have max $5K in cash and everything else gets invested (or spent 😉)
At the end of each month my husband and I make sure we individually have $10k in our checking, $5k in our joint checking to cover household expenses a month, the rest in savings so that’s probably about $70k in a HY savings. Already bought a house so this is just savings for us. We have financial meetings each month where we move the money 🤣
Mentor
150k, I have a problem
Subject Expert
For those of us (like me) who cannot do anything without an overwhelming amount of research where even picking some market matching ETFs is too much, another super easy method is dumping your cash into a robo investor (e.g., Wealthfront, betterment, SoFi). All you have to do is open an account and answer a few questions for them to come up with a risk profile (most of us should be at 10 most aggressive if we’re 20/30/40 years from retirement) and they’ll pick some market matching funds for you. Wealthfront has a small fee but more than makes up for it with automatic tax loss harvesting. Easy to DCA by setting up a recurring deposit. I have it set to small daily deposits.
Isn’t the rule of thumb 3-6 months living expenses in an emergency fund before investing or is that now out-of-date?
C1 but for many mortgage and property taxes alone might be 5k a month, which is 30k just for that, let alone any other basics like utilities or food.
I am unsure why you not consider high yield part of your checking and savings account umbrella (assuming it is a typical HYSA like Marcus). You can pull cash from those on short notice (even if not immediately), and with our jobs you presumably have access to lines of credit that can cover any same-day emergencies expenses if the rare occasion arises (e.g., at ER and need to pay right then; emergency car repair).
I keep 3 months in cash and 6 months in a betterment safety net account that has equity and bond exposure.
I try to have around $26k
Lol
Not an associate but I’m a partner at a smaller firm so make around what you likely do. I keep 3-6 months expenses + my deductibles + any other major purchases I plan to make in the next couple of years (e.g. house renovation, car down payment, etc). Right now we have about $100k, but planning a $30k house project.
Coach
Around $100k (pretty much all in a HYSA)
Used to be a lot less but now with a kid and a mortgage I’m risk adverse AF
Mentor
20k with 80k in high yield waiting to nuke my debt.
Mentor
1.65
$60k
Subject Expert
$30k-$60k which is a vague estimate of 3-6 month emergency fund for me.
Mentor
$15k for emergency fund (around 4 months of expenses, Texas is cheap). $10k in sinking fund - trying to save for a house down payment. Keep around $2-3k in a savings account at my bank (the others are in a HYSA) for an unexpected emergency or if I want to treat myself after a bad stretch at work.
I have a ton in a taxable brokerage that I’d be willing to dip into at a loss if I HAD to. I prefer that risk to get the return.
$280k…but mostly because my wife (also in a high paying job) didn’t invest a dime before we got married. Trying to DCA it in the market to get closer to $150k. For me, that feels like the right amount. About 1 year of cushion to pay the mortgage and bills if we both lost our jobs. Maybe it’s on the conservative side, but I also like the idea of having some dry powder if and when the market takes another bath.
Mentor
About $35K. $15K always in savings. Checking fluctuates a little after bills are paid.
30-60k. Usually 20ish in checking and rest in HY savings. We do also have 60k in I-bonds that we will eventually view as cash equivalent once the holding period is up.
200k..need to sink it in a fund but last month’s market comeback was not helpful. Someone, please tell me to stop trying to time the market.
Mentor
Look at the studies that say trying to time the market decreases your returns dramatically. Now, is it worth having a cash reserve to go in on market drops? Totally. But that’s a sideshow to the core strategy.
For all you market savvy folks - I have an old 401k from a previous big law job that I haven’t rolled over yet, what should I do with it right now to make the best of it? How best do I utilize my HSA?
Thanks but how does one roll into Roth lol sorry I’m a noob
Usually 70-90k in my checking. I’m risk averse and don’t know anything about personal finance.
About $400k between HYS and checking accounts. Probably time to transfer a nice chunk into my investment account, but I have been investing in real estate with syndicators so I occasionally do need to send $25-100k wires.