How many months of expenses do you guys keep on hand? I’m trying to decide if I’m being too conservative or not. I keep between 10 and 12 months.
I consider myself conservative and 10-12 months is where i’m at.
6 months is my general rule. Will probably grow when I have more to worry about than just myself and hopefully attain full BSD status. Always making principal payments on debt and maxing out contributions etc. though.
What about actual cash money (paper bills)? Maybe Turd is getting to me, but I feel like I should have some currency around the house when the deep state takes over our electronic accounts and steals all of our money.
I have like 1 month of cash on hand at the moment… in addition to HSA and credit cards. Presumably, I should be able to sell stock if I get in trouble, especially with the new t+2 cycle…
6-12 months, im pretty conservative so closer to 12
i don’t buy into the convention wisdom. i have no cash on hand ever. maybe i’ll accumulate a couple grand if i foresee a major expense like new roof, car, etc. i have insurance to cover health related risks and will cover any other additional emergency needs with lines of credit. you should have disability insurance anyway as one year of emergency funds won’t help you if you can’t work forever.
why would i lock in a major cash drag for my entire life when i can insure against the risk of losing earning power and access cheap credit only when i need it? if i kept a one year month cash drag until retirement, assuming a very conservative real net return of 4% from now until age 65, i’d be leaving ~$420,000 in today’s dollars on the table. is keeping an emergency fund just in cash you need an obscene amount of money despite not being detrimentally injured really worth giving up ~$420,000 in today’s dollars. that’s a house for a kid. even if i had two year-long periods where i had to draw a year’s worth of salary from my lines of credit from now until age 65, the savings are ~$400,000. that’s a decent house for one of my kids, paid-in-full.
the way i see it. emergency funds are only for those who have no access to capital/credit.
is your leverage from a loan shark?
Credit tends to freeze when my profession is also having trouble. I understand the drag but also understand the correlations. I thought you worked in finance as well? Perhaps the wealth management field is a little less volatile.
Too much…
No specific EF, but my down payment is in cash for god knows how long…
$10k in my bug out bag.
Wait, how did you come to $400k in cost?
down payment for what?
isn’t a down payment one initial payment
I should do 6 but it’s really about 3. I have a shit ton of money in qualified accounts. If I really need it, I’ll take the penalty and raid that.
Housing. I wouldn’t use all of it, so part of it is EF. I’ll prob limit it to 9 months afterwards
I’m pretty conservative and I think 10-12 months is too conservative. Inflation will eat into all of that cash, and I’m assuming you’re too young to have such a large allocation to cash. I have used VCSH as a place to park cash in recent years – its a short-term, high-grade corporate bond fund that is very stable and will get you >2%. Not taking much market or i-rate risk with that if that is what you’re worried about.
I have a couple months of cash but most of my liquid assets are in preferreds and other income producing securities which I have tried to diversify.
Yeah I keep 1 mo cash, pretty short, so only like $100K
i keep about 10k in checking as well. i have an extra 25k in contribution on my roth i can withdraw penalty free. about 15k in cash.
in terms of cash allocation, i prolly do 10% of net worth in cash. i have no bond positions. mostly equities, 2/3rd in mutual funds, 1/3rd in specific equities. when i leave my job. imma roll my 401k to an ira and go all out stock picking.
i wonder if the dudes / dudettes on the higher end of the scale are older or married with kids etc.
I’m 27 - savings zero - i should try and patch together some money to tide over a month at least since i may have turned up drunk today and i think they noticed lol
Thanks for the ssuggestion. I used to keep a lot of mine in LendingClub, but the rise in defaults on a lower credit grades meant I had to stop growing the portfolio (the tax laws only allow a specified dollar threshold of deductions on a taxable account from charge offs, hopefully IRS will fix this someday). I’ll look into that fund you mentioned, thanks!