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Posted: 3/9/2024 12:16:43 PM EDT
Most of my money is invested in s&p500 funds or investment real estate. I also have a chunk of emergency cash. Where should I put that cash so that it does not lose value but I can also get to it in case I need it fast? I have zero intention of touching the other investment money especially during a recession. Or is it really better to just hold on to the cash and add to it and accept the loss to inflation?
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SIC SEMPER TYRANNIS
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[#1]
Money market fund. Earning over 5% now. May be coming down this year, but nice for parked, liquid funds
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[#2]
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[#3]
I keep my extra cash in a Fidelty Money Market.
Incredibly easy to transfer back to bank account if needed. Earning close to 5 percent lately. |
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[#4]
Straightforward advice. Thanks.
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SIC SEMPER TYRANNIS
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[#5]
Mine is in amex high interest savings. this is just my liquid "emergency fund"
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[Last Edit: FALARAK]
[#6]
Fidelity Brokerage account in the core Money Market Fund, such as SPAXX (or Vanguard's VMFXX). (Currently paying 5% - 5.27%)
Linked to your bank account, you can have it transferred in 1-3 days. If that is not fast enough, then you can add checkwriting to any non-retirement brokerage account at Fidelity and write checks directly from your brokerage account with money market funds in it. |
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[#7]
Originally Posted By FALARAK: Fidelity Brokerage account in the core Money Market Fund, such as SPAXX (or Vanguard's VMFXX). (Currently paying 5% - 5.27%) Linked to your bank account, you can have it transferred in 1-3 days. If that is not fast enough, then you can add checkwriting to any non-retirement brokerage account at Fidelity and write checks directly from your brokerage account with money market funds in it. View Quote I currently have a fidelity account. I will look into this. Thanks |
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SIC SEMPER TYRANNIS
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[#9]
It was thanks to this forum and its members that I learned about doing my own research and investing.
I had money just sitting in checking doing nothing and from this forum and reading I learned about opening my own Fidelity account and I started by parking my cash in SPAXX and earning some interest. More and more reading and I moved it to FDLXX Money Market for some tax advantages. Just wanted to say thanks to this forum and its members. It truly is the best place on the internet. |
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[#10]
In what scenario would you need to have this CASH available?
I can't come up with any so keep very little CASH around un-invested. Any emergency expense can be paid with a credit card. Funds moved around, investments sold ASAP to pay off when the bill comes. I think big emergency funds/savings accounts are stupid. Change my mind. |
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"What have you given us Mr. Franklin?" "A Republic, if you can keep it."
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[Last Edit: FALARAK]
[#11]
Originally Posted By cjk: In what scenario would you need to have this CASH available? I can't come up with any so keep very little CASH around un-invested. Any emergency expense can be paid with a credit card. Funds moved around, investments sold ASAP to pay off when the bill comes. I think big emergency funds/savings accounts are stupid. Change my mind. View Quote Cash at home is for emergencies that minute or day. Like grab your stuff and get out of town. Also helpful when I get low on cash in the wallet, just go get some without having to make a trip. Also for helping family in an emergency. We had that happen once. The crazy scenario is all credit card machines are down/major power outage. It is rare, and not something we ever expect to need, but that’s why it’s an emergency plan. Cash in the bank is an emergency fund for job loss protection. My industry has layoffs every year. Several of my friends got laid off in July last year and in my area of specialty I am one of the only ones left. The cash will be used to pay bills and expenses while I am seeking a job. In my industry, it is common to take six months to find a comparable position. Additionally, that same emergency fund could be used to purchase a vehicle if needed, if one of ours was totaled or had a major life ending issue. We don’t finance vehicles. We don’t use credit cards as a means of emergency if we cannot pay the balance in full at the end of the month. Period. Lastly, our cash is not uninvested as you say. Our cash is invested in a money market fund that currently pays 5% guaranteed. |
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[#12]
I keep an emergency fund in a well protected spot: not a bank, credit union or any other like institution. That when the power goes out or the SHTF I can retrieve it ASAP. Other then that I keep my investments in accounts mentioned in prior posts in this message.
ModelABob "To Ride, Shoot Straight and Speak the Truth" - J. Cooper "Freedom is not just another dirty word" - MAB |
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[#13]
You can do CD's at your local bank. If you need cash, you can have it as soon as you get there during business hours.
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Seriously, a tractor dealer from Possum Trot, KY has to explain this to you, a lawyer? - JPL
WTB: Glock 17 gen 2. SN CAF 895 Win if you can, lose if you must, but always look good for the crowd. |
[Last Edit: cjk]
[#14]
Originally Posted By FALARAK: Cash at home is for emergencies that minute or day. Like grab your stuff and get out of town. Also helpful when I get low on cash in the wallet, just go get some without having to make a trip. Also for helping family in an emergency. We had that happen once. The crazy scenario is all credit card machines are down/major power outage. It is rare, and not something we ever expect to need, but that’s why it’s an emergency plan. This makes sense. A few K in cash at home. Cash in the bank is an emergency fund for job loss protection. My industry has layoffs every year. Several of my friends got laid off in July last year and in my area of specialty I am one of the only ones left. The cash will be used to pay bills and expenses while I am seeking a job. In my industry, it is common to take six months to find a comparable position. I don't get this. In a week I can sell some investments and have the money transferred to my checkbook. Additionally, that same emergency fund could be used to purchase a vehicle if needed, if one of ours was totaled or had a major life ending issue. We don’t finance vehicles. We don’t use credit cards as a means of emergency if we cannot pay the balance in full at the end of the month. Period. Again, funds could be transferred in a week to pay any vehicle needs or pay off credit cards. Lastly, our cash is not uninvested as you say. Our cash is invested in a money market fund that currently pays 5% guaranteed. View Quote Comment above in color. I guess 5% is decent but is pretty recent. Why not let it ride in an S&P fund making 11%? |
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"What have you given us Mr. Franklin?" "A Republic, if you can keep it."
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[Last Edit: FALARAK]
[#15]
Originally Posted By cjk: Comment above in color. I guess 5% is decent but is pretty recent. Why not let it ride in an S&P fund making 11%? View Quote View All Quotes View All Quotes Originally Posted By cjk: Originally Posted By FALARAK: Cash at home is for emergencies that minute or day. Like grab your stuff and get out of town. Also helpful when I get low on cash in the wallet, just go get some without having to make a trip. Also for helping family in an emergency. We had that happen once. The crazy scenario is all credit card machines are down/major power outage. It is rare, and not something we ever expect to need, but that’s why it’s an emergency plan. This makes sense. A few K in cash at home. Cash in the bank is an emergency fund for job loss protection. My industry has layoffs every year. Several of my friends got laid off in July last year and in my area of specialty I am one of the only ones left. The cash will be used to pay bills and expenses while I am seeking a job. In my industry, it is common to take six months to find a comparable position. I don't get this. In a week I can sell some investments and have the money transferred to my checkbook. Additionally, that same emergency fund could be used to purchase a vehicle if needed, if one of ours was totaled or had a major life ending issue. We don’t finance vehicles. We don’t use credit cards as a means of emergency if we cannot pay the balance in full at the end of the month. Period. Again, funds could be transferred in a week to pay any vehicle needs or pay off credit cards. Lastly, our cash is not uninvested as you say. Our cash is invested in a money market fund that currently pays 5% guaranteed. Comment above in color. I guess 5% is decent but is pretty recent. Why not let it ride in an S&P fund making 11%? If you S&P made 11% every year like clockwork, you'd be right. But I'd never want to be forced to sell an index fund when it was in a bear market. Additionally, if I sell an investment with gains, I now have additional taxes to deal with. 6 months of expenses is such a small part of an overall net worth, not having this invested in equities is just not a big deal. But it's fine to invest it in a taxable account and plan to use that as your emergency fund. I just recall the last big layoffs that impacted my friends and family were all in 2001-2002, and 2009-2010, when markets were cut almost in half. Long term, I think you could make a solid argument either way. At my age, I already have a fairly large percentage of my asset allocation in bond funds and fixed income assets (like cash since it is earning 5% at the moment) so this is a non-issue. For a much younger person, with a much smaller net worth, I could see your argument. As long as you are prepared to lock in some losses, as the most likely time you'd need it is in a very bad market. |
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[#16]
Originally Posted By FALARAK: If you S&P made 11% every year like clockwork, you'd be right. But I'd never want to be forced to sell an index fund when it was in a bear market. Additionally, if I sell an investment with gains, I now have additional taxes to deal with. 6 months of expenses is such a small part of an overall net worth, not having this invested in equities is just not a big deal. But it's fine to invest it in a taxable account and plan to use that as your emergency fund. I just recall the last big layoffs that impacted my friends and family were all in 2001-2002, and 2009-2010, when markets were cut almost in half. Long term, I think you could make a solid argument either way. At my age, I already have a fairly large percentage of my asset allocation in bond funds and fixed income assets (like cash since it is earning 5% at the moment) so this is a non-issue. For a much younger person, with a much smaller net worth, I could see your argument. As long as you are prepared to lock in some losses, as the most likely time you'd need it is in a very bad market. View Quote Good points. I appreciate the comments. Ive been pretty aggressive investing and it's worked out OK. Im eligible to retire next year so may have to rethink this a bit. Thanks |
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"What have you given us Mr. Franklin?" "A Republic, if you can keep it."
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[#17]
As a guy just starting to read and educate myself, this thread is exactly what I was about to post.
I'm 59, plan to work till 65 or 67. I was considering cd's and roth at my local bank for excess monthly cash. 401k is covered, cash on hand and in savings is covered. Depending on how the month goes, I have anywhere from $200-600 left over that I want fairly quick acess to should something major come up. Tossing it in the safe or savings is ok but looking to make some interest ?? |
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"I got this. We'll skip the dicks" DK-Prof 12/7/21
Fuck sugar |
[#18]
I just received a large bonus for 2023. I parked it in FDRXX at Fidelity. We are planning a yard "transformation" over the next year so a lot of it will go to that.
But I am tempted to put it in FXAIX as the returns have been pretty good but who knows what this year will entail. |
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[#19]
Originally Posted By WrightP: I just received a large bonus for 2023. I parked it in FDRXX at Fidelity. We are planning a yard "transformation" over the next year so a lot of it will go to that. But I am tempted to put it in FXAIX as the returns have been pretty good but who knows what this year will entail. View Quote Short term cash needs generally should not be invested in equities, especially not an S&P500 index fund, because you could easily be forced to lock in losses in the short term. That's speculation, not investing. |
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