Emergency fund, where should you put it?

[TDave]

Everyone risk threshold is different based on many factors. Keep in mind that CD money isn't making you anything once taxes and inflation are factored. More of a lock box if even that. As mentioned, "money makeover" from Ramsey is a great read and first start. "Cash is king" is paramount in this industry and many others.
In a condensed version, this is what we do. Not advise per se but how we approach investment. Some previously posted in other threads.
I typically work the opposite sides of a market. Literally for years actually. In the simplistic sense, if the market is low, that is when I buy. With expediting, when it tanks, that is when I invest in equipment typically. Happened the beginning of this year. lol.
Same with agriculture. I make heavy investments when the commodity market tanks. As mentioned, expediting no different.
To expand from that, same line of thinking I use in real estate purchases. When things tanked in 08/09, what did I do? Bought property that was in distress direct from banks that wanted to unload it just for the paper.
As mentioned, stock market works the same way. Buy when the market is low.
My advice for borrowing,is never unless the borrowing money actually produces a stream of revenue.
I always ask myself when people buy a new car. Do they realize they just bought a depreciating asset? Well no. They are chasing Pokémon. lol.

Yeah I'm not making anything really on the 6 month cds, although on the taxes part I'm not really paying much either.

It also depends on individual situations. For me I don't have really any bills. No house payment and no kids that I know of but the idea of saving has always been there. Not too many people I have met have a lot in savings.(or save anything) Its amazing actually, a lot of people don't save and if you just put a little away from your check each week lets say 25 to 50 a week that adds up over time. You just have to have the discipline not too touch it and to stick with it.

 

[Mailer]

What's an emergency fund? To me it's a paid off credit card. But, I did manage to pay off my mortgage in June.

Congrats!

No more mortgage payments, it's a great feeling to be able to free up that $500-3000 a month and put it in the right place.

 

[Mailer]

.....Not too many people I have met have a lot in savings.(or save anything) Its amazing actually, a lot of people don't save and if you just put a little away from your check each week lets say 25 to 50 a week that adds up over time. You just have to have the discipline not too touch it and to stick with it.

So true. For us who have the financial discipline, found the habit of savings rewarding. We are on the auto pilot. Good for us.

My thought. A good habit can take time to develope because most of the time it doesn't provide the immediate rewards. So most of people dropped out before it developed.

A bad habit, on the other hand, provides the instant rewards and gratifications...Oh yeah, if it feels good, do it. Lol...

Apparently for most, savings doesn't provide the instant rewards. It's a long term thing.

There's a free app called Digit, it suppose to help people subconsciously establish the savings habit. It's pretty cool and I've been on it. I used it for the Christmas account.

 

[jjoerger]

Congrats!

No more mortgage payments, it's a great feeling to be able to free up that $500-3000 a month and put it in the right place.

And to know my wife and daughter will always have a place to live. We live in an 18800 square foot horse barn. We built a 2200 square foot 5 bedroom 2 1/2 bath home inside. Have 7 acre's of land and live way in the country.

 

[BigStickJr]

I remember one night my ex-wife found two $100 bills in my wallet.
She thought it be nice to go to dinner and a movie.
I explained that I would be going by the bank in the morning to place them in our emergency fund.
If I remember correctly, she told me " Where to put our emergency funds " that evening.

 

[TeamCaffee]

Luckily for us we have a good financial adviser that has kept us making money and not putting needed funds where we might lose...

Mailer thanks for sharing as I liked your plan for a reserve to the reserve plan. My emergency fund is kept where I can get to it fast when needed. I then budget to put other money back that I know will not be needed for awhile in more conservative funds but with a better return then savings at a bank.

We learned this lesson a long time ago when we sold our house in Kansas as the housing market was high and I was going to invest the money... Luckily for me we were told nope if going to buy in the next ten years put the money in a savings and wait. Sure enough the market crashed when we were ready to purchase and we had our very nice down payment. If I had invested in the market we would not have had enough for a down payment.

 

[OntarioVanMan]

I remember one night my ex-wife found two $100 bills in my wallet.
She thought it be nice to go to dinner and a movie.
I explained that I would be going by the bank in the morning to place them in our emergency fund.
If I remember correctly, she told me " Where to put our emergency funds " that evening.

I guess that is partly why she is an EX wife....LOL

 

[OntarioVanMan]

Buying Canadian currency....if one had of known you could be better then a 30% profit at the rate of exchange now...

 

[BigStickJr]

I guess that is partly why she is an EX wife....LOL

You have a future as a detective, sir.

 

[OntarioVanMan]

You have a future as a detective, sir.

no...my reading comprehension meds have kicked in....lol

 

[Ragman]

Buying Canadian currency....if one had of known you could be better then a 30% profit at the rate of exchange now...

 

[CintVan]

The emergency fund is exactly that a emergency fund ...you should not be concerned on the rate of return but the ability to get at it quickly....you never want to tie it up in anything you pay to remove it on....

 

[Mailer]

The emergency fund is exactly that a emergency fund ...you should not be concerned on the rate of return but the ability to get at it quickly....you never want to tie it up in anything you pay to remove it on....

Very true.
Though, I like to have it tied to something. Sometimes emergency are not a true emergency. By having it tied up in a special account it gives me a bit more time to look for other options first and to really evaluate the emergency. From my past experiences, most of the time it is not a true emergency.