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Is this really meant for just bank accounts (ie. checking+savings)? If so, I don't understand how anyone is answering more than $10,000. Nearly all your assets
by morgante 13y ago
Is this really meant for just bank accounts (ie. checking+savings)? If so, I don't understand how anyone is answering more than $10,000. Nearly all your assets should be invested, with just enough cash to handle immediate expenses.
- _dark_matter_ 13y agoWell that's a recipe for disaster. Emergency funds should be able to hand 3-6 months of expenses, sometimes more.
- josephmc5 13y agoCompletely agree. This is one of those "it isn't important until you need it" things.
- 16bytes 13y agoYour emergency funds don't need to be cash in low interest savings/checking. For example, home-equity line of credit is great for just sitting there most of the time unless you really need it. That frees up capital that you'd otherwise tie up in liquid cash that doesn't do anything.
- morgante 13y agoSure. But there's absolutely no reason your entire emergency fund has to be in cash. Sure, keep the first month or two in cash but anything beyond that could easily be kept in an investment and liquidated when necessary.
- cryptoz 13y agoThere are many immediate expenses that significantly exceed $10k if you're wealthy. Also, "should" is a personal preference / strategy and certainly does not apply to everyone.
- wcchandler 13y agoAgreed. I wonder if percentages would be more appropriate.
- peterwwillis 13y agoWhat is this "investment" you speak of? I'm 29 and the only asset I have is a very meager amount of cash (after taking debt into account) and the car I finally just paid off, which is worth about %10 of its original value.
- morgante 13y agoThen you aren't marking $150,000+.