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Posted: 2/22/2021 11:59:14 AM EDT
[#1]
Quote HistoryQuoted: @SpudCrushr Tax implications? I have a couple of brokerage accounts, and thought of putting it in an ETF, but was concerned with tax issues. ETA: I'm OK risking the money in an investment. One of the advantages of ETFs over mutual funds is lower taxes. Another is lower annual fees. I would recommend a broadly held, widely diversified index ETF fund and to read "The Truth About Money" which is a very casual-to-read book that provides stand-alone chapters of basic financial education.  I like Vanguards offerings: VOO = S&P 500 and VTI = Total market. If you want less risk and less interest BND = bonds. |
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Posted: 2/22/2021 12:00:15 PM EDT
[#2]
Quote HistoryQuoted:best advice in this thread, great opportunity to buy today too Worst advice in this thread. Bitcoin is gambling, not investing. |
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Posted: 2/22/2021 12:01:24 PM EDT
[#3]
Quote HistoryQuoted: But the OP themselves qualified their question with this: ETA: I'm OK risking the money in an investment. Quote HistoryQuoted: Quoted: Quoted: Unless someone has a better money market fund or high yield savings recommendation, you are already doing the right thing OP. People recommending you invest your EMERGENCY FUND in stocks or crypto are either high or illiterate. ^^^^^^^^^^^^^ We have a winner The people who consider the equity market as a place to park emergency funds are foolish. But the OP themselves qualified their question with this: ETA: I'm OK risking the money in an investment. "My wife and I have a sizeable emergency fund" Actually, this is what they said. They said they want ideas on how to invest an emergency fund. An emergency fund is the antithesis of risk capital. The terms "emergency fund" and "risk" should not be used in the same sentence. In addition, one should consider whether 3 months is an adequate period to finance. Bear markets can last for years, possibly a decade. Having to sell shares into a bear market is a recipe for going insolvent. |
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Posted: 2/22/2021 12:02:40 PM EDT
[#4]
Quote HistoryQuoted: Following. Right now I have it broken up into several limited high interest savings accounts, but there has to be a better way. I hope you don't have several savings accounts because they touch the $250K limits. 
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Posted: 2/22/2021 12:03:29 PM EDT
[#5]
Quote HistoryQuoted: @SpudCrushr Tax implications? I have a couple of brokerage accounts, and thought of putting it in an ETF, but was concerned with tax issues. ETA: I'm OK risking the money in an investment. Worry of taxes on investments is overblown. As stated, you are only taxed upon gains. Additionally, short term cap gains are at the same rate as earned income. You get the benefit of a lower rate if you've held for more than a year. So that's better, but the rate for short term isn't like they are penalizing you any more than they do for you showing up to work. |
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Posted: 2/22/2021 12:04:52 PM EDT
[#6]
Quote HistoryQuoted:T-Mobile is 4% for the first 3,000 and 1% for everything after. AMEX was good for awhile, but has steadily declined. I have mine spread between multiple accounts like T-Mobile to maximize the interest even if it's only for 3k at a time. OK. I would encourage you to buy some index ETFs and see how they do for you. Mine have returned 13.4 to 14.5% average over the last 10-years. Past performance ... blah blah blah. |
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Posted: 2/22/2021 12:06:02 PM EDT
[#7]
Three months of expenses? I'd not only leave it right where it's at, I'd add to it. Investing is important, but ready cash has a value all its own.
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Posted: 2/22/2021 12:07:18 PM EDT
[#8]
I think I Bonds are a good choice for money you can't risk. The fixed rate is really low but they pay a variable rate tied to inflation. They aren't taxed until you cash them and that can be 30 years from now.
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Posted: 2/22/2021 12:07:31 PM EDT
[#9]
Quote HistoryQuoted: Everybody wants a high return with no risk.  But the fact is, all/any return is a function of one thing: risk. Pretty simple. And some point it goes from investing to gambling. |
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Posted: 2/22/2021 12:11:37 PM EDT
[#10]
I took some GD advice several years ago with some funds sitting idle in an ira from an old job. I split it up using the 3 fund portfolio method and I'm up probably 40% from what otherwise would have not changed a cent.
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Posted: 2/22/2021 12:13:53 PM EDT
[#11]
S&P500 index funds like VTI
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Posted: 2/22/2021 12:18:50 PM EDT
[#12]
Quote HistoryQuoted: Your emergency fund needs to be left exactly where it is, or placed in a money market account with check writing privileges. Anything else goes against entirely what an emergency fun is supposed to be. Or get a HELOC set up just in case for true emergencies. |
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Posted: 2/22/2021 12:21:48 PM EDT
[#13]
First off, I appreciate the replies and responses.
I'm hearing a lot of folks suggesting I need more capital, and that I shouldn't invest it, etc. I will clarify a few things. 1. This savings account is NOT the only savings I have. I have $3k set aside for vacations, which obviously can be used for emergencies as well. 2. I have over $20k in cash in the safe. 3. I have over $18k in another bank account I've been saving to finish my basement. 4. We have no debt other than the house. My 457B is fully funded, as well as a fully funded SIMPLE IRA through my training company. 5. I have about $50k in guns and ammo I could sell if I HAD TO. Since the money can be pulled out of a brokerage account without tax penalty (at least the initial investment), it would seem to be smart to have it earning something in a S&P Index Fund or other similar ETF with a low expense ratio (not in some volatile stock obviously). I was more curious if others are doing this vs. leaving it in a savings/money market account earning 1% (losing 2% to inflation). I understand there is risk to investing it, even in a stable Index Fund. Either way, I appreciate the input and advice. |
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Posted: 2/22/2021 12:23:51 PM EDT
[#14]
Crypto.
Voyager will pay 5.5% interest on as little as 0.01 BTC. Or as much as 8.5% on USDC stable coin ($100 deposit required). There is an app and it’s linked to your bank account for transfers. |
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Posted: 2/22/2021 12:25:28 PM EDT
[#15]
Quote HistoryQuoted: I’m dealing with mid-sixes so...  In a safe, insured, completely liquid account? Which one? |
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Posted: 2/22/2021 12:26:06 PM EDT
[#16]
Quote HistoryQuoted: I hope you don't have several savings accounts because they touch the $250K limits. I'm unsure what you mean by this. |
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Posted: 2/22/2021 12:37:14 PM EDT
[#17]
Quote HistoryQuoted: I'm unsure what you mean by this. Quote HistoryQuoted: Quoted: I hope you don't have several savings accounts because they touch the $250K limits. I'm unsure what you mean by this. |
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Posted: 2/22/2021 12:37:24 PM EDT
[#18]
Take it and put it all into VOO. It’s safe, has a dividend, and will beat your returns by a very big amount.
I did this back in March when the market crashed. No regrets. |
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Posted: 2/22/2021 12:38:33 PM EDT
[#19]
Quote HistoryQuoted: Risk tolerance? Stock market is fairly liquid (couple business days to sell and move the money). You could put it in a fund or blue chip stocks. Fairly safe, modest returns. Semi-protected against inflation. The problem is risk is rewarded. If there was a risk-free way to get 6% on your money, everyone would do it. The higher the return, the more risk you must take on, generally. Most utility companies are paying 3.5 to 4.5% |
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Posted: 2/22/2021 12:45:35 PM EDT
[#20]
Bitcoin is the new savings account
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Posted: 2/22/2021 12:45:47 PM EDT
[#21]
Quote HistoryQuoted: First off, I appreciate the replies and responses. I'm hearing a lot of folks suggesting I need more capital, and that I shouldn't invest it, etc. I will clarify a few things. 1. This savings account is NOT the only savings I have. I have $3k set aside for vacations, which obviously can be used for emergencies as well. 2. I have over $20k in cash in the safe. 3. I have over $18k in another bank account I've been saving to finish my basement. 4. We have no debt other than the house. My 457B is fully funded, as well as a fully funded SIMPLE IRA through my training company. 5. I have about $50k in guns and ammo I could sell if I HAD TO. Since the money can be pulled out of a brokerage account without tax penalty (at least the initial investment), it would seem to be smart to have it earning something in a S&P Index Fund or other similar ETF with a low expense ratio (not in some volatile stock obviously). I was more curious if others are doing this vs. leaving it in a savings/money market account earning 1% (losing 2% to inflation). I understand there is risk to investing it, even in a stable Index Fund. Either way, I appreciate the input and advice. So what's the point of your " emergency fund" if you have $20k cash sitting in a safe not making any interest at all? Why not just bump up the cash in the safe to 3 month's of expenses, and take your emergency fund and invest it in whatever your normal investments are? |
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Posted: 2/22/2021 12:49:12 PM EDT
[#22]
Quote HistoryQuoted: I suspect the $250K limit being referred to is the coverage provided by FDIC insurance. Ahhh. This is my emergency savings. It's not 250k |
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Posted: 2/22/2021 12:50:06 PM EDT
[#23]
Quote HistoryQuoted: So what's the point of your " emergency fund" if you have $20k cash sitting in a safe not making any interest at all? Why not just bump up the cash in the safe to 3 month's of expenses, and take your emergency fund and invest it in whatever your normal investments are? It has a different purpose. Like all of my savings accounts. |
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Posted: 2/22/2021 12:52:51 PM EDT
[#24]
Quote HistoryQuoted: So what's the point of your " emergency fund" if you have $20k cash sitting in a safe not making any interest at all? Why not just bump up the cash in the safe to 3 month's of expenses, and take your emergency fund and invest it in whatever your normal investments are? Quote HistoryQuoted: Quoted: First off, I appreciate the replies and responses. I'm hearing a lot of folks suggesting I need more capital, and that I shouldn't invest it, etc. I will clarify a few things. 1. This savings account is NOT the only savings I have. I have $3k set aside for vacations, which obviously can be used for emergencies as well. 2. I have over $20k in cash in the safe. 3. I have over $18k in another bank account I've been saving to finish my basement. 4. We have no debt other than the house. My 457B is fully funded, as well as a fully funded SIMPLE IRA through my training company. 5. I have about $50k in guns and ammo I could sell if I HAD TO. Since the money can be pulled out of a brokerage account without tax penalty (at least the initial investment), it would seem to be smart to have it earning something in a S&P Index Fund or other similar ETF with a low expense ratio (not in some volatile stock obviously). I was more curious if others are doing this vs. leaving it in a savings/money market account earning 1% (losing 2% to inflation). I understand there is risk to investing it, even in a stable Index Fund. Either way, I appreciate the input and advice. So what's the point of your " emergency fund" if you have $20k cash sitting in a safe not making any interest at all? Why not just bump up the cash in the safe to 3 month's of expenses, and take your emergency fund and invest it in whatever your normal investments are? Good god man. 30 dudes went down 30 rabbit holes only to find out that your facts on the ground made your original question at best irrelevant. |
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Posted: 2/22/2021 12:54:19 PM EDT
[#25]
Emergency fund. 3 months. Sounds like you should leave it in the savings account.
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Posted: 2/22/2021 1:53:35 PM EDT
[#26]
Quote HistoryQuoted: Good god man. 30 dudes went down 30 rabbit holes only to find out that your facts on the ground made your original question at best irrelevant. Quote HistoryQuoted: Quoted: Quoted: First off, I appreciate the replies and responses. I'm hearing a lot of folks suggesting I need more capital, and that I shouldn't invest it, etc. I will clarify a few things. 1. This savings account is NOT the only savings I have. I have $3k set aside for vacations, which obviously can be used for emergencies as well. 2. I have over $20k in cash in the safe. 3. I have over $18k in another bank account I've been saving to finish my basement. 4. We have no debt other than the house. My 457B is fully funded, as well as a fully funded SIMPLE IRA through my training company. 5. I have about $50k in guns and ammo I could sell if I HAD TO. Since the money can be pulled out of a brokerage account without tax penalty (at least the initial investment), it would seem to be smart to have it earning something in a S&P Index Fund or other similar ETF with a low expense ratio (not in some volatile stock obviously). I was more curious if others are doing this vs. leaving it in a savings/money market account earning 1% (losing 2% to inflation). I understand there is risk to investing it, even in a stable Index Fund. Either way, I appreciate the input and advice. So what's the point of your " emergency fund" if you have $20k cash sitting in a safe not making any interest at all? Why not just bump up the cash in the safe to 3 month's of expenses, and take your emergency fund and invest it in whatever your normal investments are? Good god man. 30 dudes went down 30 rabbit holes only to find out that your facts on the ground made your original question at best irrelevant. What is the actual 3 months of personal household expenses since there's no mortgage? #1: you have dedicated savings accounts yet none of those dedicated accounts has enough for dedicated things so you feel poor. Even though the total would more than cover it. #2: you don't want to touch that because reasons. If you had to use it for an emergency, no longer is there $20k in the safe. So what's the point if you can't ever touch it? #3: what's the timeframe? Look into T-bills or CDs that mature out to that timeframe IF they pay better than your MM account; if not, leave it there. #4: Don't include Business expenses as they shouldn't be part of your personal finances. #5: if forced to liquidate some, probably get less than you think because that's just how it works everyone wants your Unobtanium PG-17 Model A Mark 3 when ya don't want to sell it, crickets when ya do  |
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Posted: 2/22/2021 1:56:48 PM EDT
[#27]
Quote HistoryQuoted: THIS. What is the actual 3 months of personal household expenses since there's no mortgage? #1: you have dedicated savings accounts yet none of those dedicated accounts has enough for dedicated things so you feel poor. Even though the total would more than cover it. #2: you don't want to touch that because reasons. If you had to use it for an emergency, no longer is there $20k in the safe. So what's the point if you can't ever touch it? #3: what's the timeframe? Look into T-bills or CDs that mature out to that timeframe IF they pay better than your MM account; if not, leave it there. #4: Don't include Business expenses as they shouldn't be part of your personal finances. #5: if forced to liquidate some, probably get less than you think because that's just how it works everyone wants your Unobtanium PG-17 Model A Mark 3 when ya don't want to sell it, crickets when ya do You guys should try it sometime. Gotta love GD. |
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Posted: 2/22/2021 2:05:19 PM EDT
[#28]
Quote HistoryQuoted: Reading comprehension is a thing. You guys should try it sometime. Gotta love GD. Clearly, you are smarter than the rest of us here, and you should be telling us all how to manage money rather than asking opinions. |
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Posted: 2/22/2021 2:13:32 PM EDT
[#29]
In the last month I bought quite a bit of airline stock figuring that the demand is going to be huge with Covid fading away.
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Posted: 2/22/2021 2:19:23 PM EDT
[#30]
Quote HistoryQuoted: @SpudCrushr Tax implications? I have a couple of brokerage accounts, and thought of putting it in an ETF, but was concerned with tax issues. ETA: I'm OK risking the money in an investment. Quote HistoryQuoted: Quoted: Risk tolerance? Stock market is fairly liquid (couple business days to sell and move the money). You could put it in a fund or blue chip stocks. Fairly safe, modest returns. Tax implications? I have a couple of brokerage accounts, and thought of putting it in an ETF, but was concerned with tax issues. ETA: I'm OK risking the money in an investment. Making money and having to pay some taxes on it beats the alternative. |
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Posted: 2/22/2021 2:20:15 PM EDT
[#31]
OP - it sounds like you are simply looking for a place to park the money with the best chances for asset preservation. Stay the course with the money market fund but shop around for the best rate. Also, bump that emergency fund up to at least six months.
Remember everything is liquid in a sense - the only caveat is the price at which the underlying asset can be liquidated regardless of timing albeit during a market rally or severe sell off. Any monetary asset can be liquidated fairly quick - you just might not get the value you want. |
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Posted: 2/22/2021 2:23:52 PM EDT
[#32]
Crypto is not necessarily "liquid". For those who want to buy crypto, there's only three legitimate exchanges to choose from: Coinbase, Kraken, and another one. Coinbase is by far the most popular and secure, but when purchasing bitcoin or another alternate from them directly they hold your money (even after having your account fully confirmed and when purchased via ACH transaction) for a minimum of two weeks. There's even commentary from others on different sites (most notably Reddit) where people claimed Coinbase held their money for up to two months. During that holding period, you cannot withdraw your crypto to your linked bank account (you can only buy, sell, or exchange within Coinbase). No one really talks about that, so be aware that it isn't a "same day" kind of deal with Coinbase.
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Posted: 2/22/2021 2:52:04 PM EDT
[#33]
Couple things...
For my household expenses 3 months is about 10k. Is chasing rate of return even worth messing around with considering the amount of funds your dealing with. Is it an emergency fund or an investment? For me emergency encompasses everything from job loss to home repair to shtf. One step with zero 3rd party interaction is the primary concern. You can always deposit money but can you always take it out and how long does that take? ETA: didn’t read far enough to see OP’s update. You are in a good spot IMO. You really have 38k emergency fund right now until you pull the trigger on the basement. I personally would be ok with keeping the 20k in the safe and not worrying about it. That’s exactly our six month emergency fund and how we store it. It sounds like you have a good amount of discretionary spending every month. Why not keep your 3 month or increase to 6 in cash then just start another account investing x/month in something that’s worth chasing the return on? |
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Posted: 2/22/2021 2:53:12 PM EDT
[#34]
BTC
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Posted: 2/22/2021 2:54:20 PM EDT
[#35]
how did you manage to get "sizeable savings" and not know what to do with it?
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Posted: 2/23/2021 10:26:38 AM EDT
[#36]
Quote HistoryQuoted: Or get a HELOC set up just in case for true emergencies. Quote HistoryQuoted: Quoted: Your emergency fund needs to be left exactly where it is, or placed in a money market account with check writing privileges. Anything else goes against entirely what an emergency fun is supposed to be. Or get a HELOC set up just in case for true emergencies. I wished you hadn’t quoted my post and suggested this. That’s terrible advice. Sure, You can treat you house like an ATM, but why? Taking an appreciating asset and converting to cash for the purpose of emergency is downright folly. Definitely a poor mans move..... |
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Posted: 2/23/2021 10:27:42 AM EDT
[#37]
Liquid, low risk, decent return.
You only get to pick two. |
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Posted: 2/23/2021 10:29:38 AM EDT
[#38]
Dude, you have cash in the safe.....there’s your emergency fund.....
Holy shit if 20k doesn’t cover 3-6 months, you must have a king air on standby....... good hell....... |
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Posted: 2/23/2021 10:44:10 AM EDT
[#39]
I have a really good financial guy. My IRA made 14% for the year last year and his track record over a few decades is amazing. I started helping with my grandmothers finances a few years ago and the first quarterly review I sat through I was highly impressed. Way better than my current guy(s) were doing.
That being said, I am slowly moving my money into the same fund as my IRA. I will have to pay taxes yearly on the money made. I would rather pay taxes on that 14% to 21% than only make 1% leaving it in a bank. The downside is it may take 3 business days to get in my checking account if something bad happens. That is what CC's are for though! |
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Posted: 2/23/2021 10:45:39 AM EDT
[#40]
Quote HistoryQuoted: You can buy Bitcoin and sell it the same day. Is that liquid enough. Ride it to $100k and then sell. Just don't use an app like RobinHood to do so... their "unsettled funds" bullshit will have you waiting a week on either side and potentially fuck you out of profit. |
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Posted: 2/23/2021 11:05:07 AM EDT
[#41]
Quote HistoryQuoted: In a safe, insured, completely liquid account? Which one? Yep, fdic insured savings accounts. There’s lots of deals providing a higher yield but, they tend to have restrictions ($25k limits ect) on them. It doesn’t do you much good to pursue these deals (if you have a larger amount of cash) unless you’re willing to open up and manage 20 different savings accounts. How much hassle are you willing to take for an extra $1000 a year in interest? |
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