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Investing in crypto is fun again :)
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I feel that way too bud
I can’t help it. Love me for who I am.
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Pro
Conversation Starter
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I do the same. I have 2-3 months in my bank and the rest I keep invested.
It would take me 3-5 days to access the money if I really needed too. Though we are exposed to more risk.
OP - keep it invested. You’ll do far better in the long run having that money in the market. Odds are that even if you have to withdraw during a dip you’ll still have made gains from putting that cash in the market over time. Also, it’s much more likely that you’ll need to tap into your emergency fund during a market expansion than a retraction.
Conversation Starter
I second that
Pro
I would base your decision on your risk tolerance, likelihood of things going really south, and your alternative options.
Someone with a spouse and 3 kids, a mortgage, chronic illness requiring expensive monthly medication, and ailing parents who can't afford retirement is in a very different position than a single person in their 20s who is renting and can move back home or get a loan from their parents.
I will just say, don't underestimate the emergencies that may come up. Plenty of high earners found themselves unemployed and underemployed for looong stretches on time after 2008. And don't forget how expensive health insurance is if you don't have a decent employer plan or if you get really sick.
If you're investing the money, then you should be planning for your future emergency without it. If you could make do, fine.
Let’s assume I’m talking about adding another 6+ months of living expenses from high yield savings into VOO. Holding long term and reinvesting dividends. Would keep little, probably like several thousand, in my HYS.
Obviously my risk tolerance is a bit higher than some.
I have 3 months in VUBFX and 3 months in VFINX. 2 weeks pay in both savings and checking. I've also been laid off a couple times and don't trust things to work out.
Rising Star
This has been my philosophy too. I have somewhere on the order of 8 months expenses of VTI (maybe more if I really cut expenses.). My concern is more around what happens if the whole economy tanks and that fund loses a huge part of its value right when I need it,
I thought about my emergency fund. Basically, you’d want the money to be as liquid as possible. Say if you needed it in 2 days... do you want to be selling stocks at a loss if you can help it?
Rising Star
Agree the issue is not really liquidity, it's being required to sell equity at what may be a bad time in the market.
Conversation Starter
I kind of agree to the above philosophy, emergency funds are for emergency which might not occur. So keeping it invested in safer, less volatile securities/ETF could be a good option. I am also contemplating it, just need to figure out a safe ETF which has some upside and very little downside risk.