Author Topic: Where to Stash the ER Monies?  (Read 3653 times)

Todd

  • 5 O'Clock Shadow
  • *
  • Posts: 18
Where to Stash the ER Monies?
« on: June 22, 2015, 06:46:34 AM »
Hello, All ~

I'm watching my ER stash (~$20k) in my savings account at the "Horse & Buggy" earn, like, 0.37c / year in interest.

Where do you guys put your ER funds? To date, we've only (barely) tapped into them once previously. I'd like to:

1) Let those little green soldiers work harder than they are now
2) Still have relative access if we have an, "Uh-Oh" (job loss, house fall-in, etc)
3) Allow our ER funds to sit - out of sight, out of mind - and (hopefully) prosper

Your thoughts?

Thank you all, in advance ~

Todd

notoriusjt2

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: Where to Stash the ER Monies?
« Reply #1 on: June 22, 2015, 07:01:04 AM »
I put my EF in a credit union savings account. While the interest rate is nothing spectacular, it certainly yields more than $0.37 per year and I only currently have about $8K in there.

GGNoob

  • Pencil Stache
  • ****
  • Posts: 725
  • Age: 32
  • Location: Colorado
Re: Where to Stash the ER Monies?
« Reply #2 on: June 22, 2015, 07:15:37 AM »
You can get up to around 1% in online savings accounts: http://www.nerdwallet.com/blog/banking/nerdwallets-best-savings-accounts/

Otherwise you could always invest in a conservative balanced fund like the Lifestategy Conservative (or moderate) Growth Fund. Otherwise the Wellesley Income Fund could be a good choice. Betterment could also work as it allows you a little more flexibility to withdraw/add funds as needed without the short term trading restrictions that mutual funds have (my personal choice).


Sent from my iPhone using Tapatalk

forummm

  • Walrus Stache
  • *******
  • Posts: 7355
  • Senior Mustachian
Re: Where to Stash the ER Monies?
« Reply #3 on: June 22, 2015, 08:45:08 AM »
A lot of us don't have large emergency funds sitting in cash. For me, I have a few grand in checking accounts (paying about zero), 2 very reliable incomes (our salaries), a bunch of empty credit cards, low expenses, and a bunch of Vanguard funds (which could be turned into cash in my checking account in 2 days). I finance unexpected things from cash flow. If for some reason we both lost our jobs suddenly, we'd turn to longer term savings and put the brakes on spending.

We just had to replace an AC last week for $3600. I wrote checks from 2 of our checking accounts and shut off our automatic investment with Vanguard for a bit to replenish the accounts. No sweat. I could also have put it on our CC, giving me another month to come up with the cash, but that would have cost me 2.5% as a convenience fee from the HVAC firm.

SpareChange

  • Bristles
  • ***
  • Posts: 420
Re: Where to Stash the ER Monies?
« Reply #4 on: June 22, 2015, 12:17:34 PM »
A lot of us don't have large emergency funds sitting in cash. For me, I have a few grand in checking accounts (paying about zero), 2 very reliable incomes (our salaries), a bunch of empty credit cards, low expenses, and a bunch of Vanguard funds (which could be turned into cash in my checking account in 2 days). I finance unexpected things from cash flow. If for some reason we both lost our jobs suddenly, we'd turn to longer term savings and put the brakes on spending.

Pretty much all of this. I would add my PTO account as well, as I can cash some of it out, or in case the emergency shows a strong interest in draining time away from work, such as a hospital stay.

Heckler

  • Handlebar Stache
  • *****
  • Posts: 1346
Re: Where to Stash the ER Monies?
« Reply #5 on: June 22, 2015, 12:30:28 PM »
Pretty much what forummm said, but I hold 70% short term bonds (VSB) and 30% Canadian Equity (VCN) in my TFSA of about the same value as your cash EF. Hope to never use it until FI, but its there if needed.  Conservatively, in OK with the medium risk income.

PARedbeard

  • Stubble
  • **
  • Posts: 152
  • Location: Pennsylvania
Re: Where to Stash the ER Monies?
« Reply #6 on: June 22, 2015, 12:37:13 PM »
We have a couple thousand in a checking account and a few more in a savings account. Apart from that, I throw money into ROTH and taxable (dividend aristocrat stocks) accounts. In an absolute emergency (all my taxable/checking/savings is wiped) I could also dip into that ROTH.

brooklynguy

  • Handlebar Stache
  • *****
  • Posts: 2207
  • Age: 38
Re: Where to Stash the ER Monies?
« Reply #7 on: June 22, 2015, 12:49:53 PM »
Hopefully the previous responses were correct in interpreting the OP's question to mean "where do you put your emergency fund?" (ER = emergency reserve?).

Todd, your use of MMM catch-phrases like "little green soldiers" and your prior posting history lead me to believe the above interpretation was correct and you probably already know the following, but, in the off chance you were actually asking "where do you put your early retirement fund" (which, in my view, is really another way of saying "your life savings" or "all of your money"), then the answer is definitely not "a 0.0000185% savings account," and the responses you'd get would significantly differ from those appearing in this thread so far.

Alternatively, maybe it's the case that your taxable accounts "only" have ~$20k in them right now (in which case you might view the entire contents of those taxable accounts as your "emergency fund"), but if and when those accounts accumulate enough to exceed what you view as your "emergency fund," then your investment strategy for those dollars will need to reflect the fact that you intend to live off of them (plus the amounts in your tax-deferred accounts) for the rest of your life, post-retirement.

PowerMustache

  • Stubble
  • **
  • Posts: 129
  • Age: 34
  • Location: Seattle
Re: Where to Stash the ER Monies?
« Reply #8 on: June 22, 2015, 01:07:49 PM »
Hopefully the previous responses were correct in interpreting the OP's question to mean "where do you put your emergency fund?" (ER = emergency reserve?).

Todd, your use of MMM catch-phrases like "little green soldiers" and your prior posting history lead me to believe the above interpretation was correct and you probably already know the following, but, in the off chance you were actually asking "where do you put your early retirement fund" (which, in my view, is really another way of saying "your life savings" or "all of your money"), then the answer is definitely not "a 0.0000185% savings account," and the responses you'd get would significantly differ from those appearing in this thread so far.

Alternatively, maybe it's the case that your taxable accounts "only" have ~$20k in them right now (in which case you might view the entire contents of those taxable accounts as your "emergency fund"), but if and when those accounts accumulate enough to exceed what you view as your "emergency fund," then your investment strategy for those dollars will need to reflect the fact that you intend to live off of them (plus the amounts in your tax-deferred accounts) for the rest of your life, post-retirement.

Thank you brooklynguy, I read the thread thinking that the posters before you were misinterpreting OPs question.

OP, can you clarify whether by 'ER' you meant 'Emergency Reserve' or 'Early Retirement'?

forummm

  • Walrus Stache
  • *******
  • Posts: 7355
  • Senior Mustachian
Re: Where to Stash the ER Monies?
« Reply #9 on: June 22, 2015, 01:11:23 PM »
I thought this was OP's fund to spend on urgent medical care and/or memorabilia from the hit NBC show.

kendallf

  • Handlebar Stache
  • *****
  • Posts: 1030
  • Age: 52
  • Location: Jacksonville, FL
Re: Where to Stash the ER Monies?
« Reply #10 on: June 22, 2015, 01:24:04 PM »
I thought this was OP's fund to spend on urgent medical care and/or memorabilia from the hit NBC show.

Winner!  Wait, you mean there was an actual "ER" show and you're not talking about Grey's Anatomy?

Todd

  • 5 O'Clock Shadow
  • *
  • Posts: 18
Re: Where to Stash the ER Monies?
« Reply #11 on: June 24, 2015, 01:13:26 PM »
Everyone, thank you so much, especially for the tongue-in-cheek humor!

The "ER" funds definitely refer to my "Emergency Reserve". (Thanks Brooklynguy & Powermustache for seeking clarity / expounding on BOTH variations of "ER" in my question).

Forummm, your situation sounds similar to mine: reliable income, empty credit cards, etc. And these funds are earmarked for, "Oh, $#! situations".  I'm grateful to have a back-up plan but I do get rankled at the minuscule interest / return on my safety net.

Thank you, everyone.

~ Todd