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Originally Posted by ThaVirus
I have probably like three year's worth of my current bills sitting in savings. I'm a super safe kind of guy, but even I can recognize that that's not doing me much good. I think my money market account gains something abysmal like .00025% interest.
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That's too much. 6 months is the most you probably need.
I could probably do less too given my career stability is very good. If I got laid off tomorrow I could find a job the same day. If you won't lose your source of income for long, you can get away with less in emergency savings.
I also believe in keeping an standard emergency fund, not in stocks, because I don't believe in short term disability and will never pay for it. It's a waste of money for people who have a standard emergency savings plan.
Quote:
Originally Posted by Hog's Gone Fishin
If you can make 25% on your stocks and not need the money for 2 years you can take a 50% market crash and still be even. People hold these emergency funds for years and it's a waste. There's basically no emergency you can't use a credit card for to buy time until you liquidate an investment.
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Having an emergency take you into debt is the reason for an emergency savings plan. Job layoff, injured on the job, or a huge home maintenance issue isn't something I want to take on interest debt for if I didn't have the funds to cover it.
Are you really suggesting that you can easily get 25% gains on your stocks every year? Many new investors who started in 2021 are currently negative YTD with risky stock plays.