Where to Invest Money Right Now?

[Danno]

First make sure you have 6-12 months expenses in an emergency fund kept in a money market account,

That's the conventional wisdom, but I've always thought that leaves a lot of money on the table. Because putting that money in a more risky (but still conservative) mutual fund will bring lots more in returns. And the risk of losing, say, 5-10% in a huge downtown isn't likely to screw up the money's purpose as an emergency fund. Plus, the people smart enough to have this emergency fund are not very likely to need it, and certainly not need all of it. Having $50k or whatever earning money market rates seems like a loss of income (because there are plenty of conservative mutual funds that routinely bring in way more than that, and are still completely liquid).

[sirbumpsalot]

6-12 months is not necessary in an emergency fund unless you own a business that you rely on to pay the bills or are an independent contractor (consultant, musician, etc). Even then, it is way overkill in almost every instance.

Never mind it is probably unattainable for 80-90% of Americans in the first place.

Step away from bogleheads.org, that place isn't real life.

Emergency fund expenses will still pay you 3.25% to store...

[AdironRider]

I don't disagree on what a money market account will pay out right now, it is just way over conservative to keep 6-12 months in a money market account in all but a few, very specific situations.

[goldenboy]

Emergency funds really depend on your situation and comfort level. Work for yourself with a variable income and mouths to feed? Probably best to keep a sizeable amount around, even if it only makes 3% or whatever right now.

Sent from my SM-G996U1 using Tapatalk

[old goat]

4% in an insured account seems like a good deal right now. It's not going to keep up with inflation but is anything that's low risk?

[Cono Este]

Some nice yields out there. I like MMM or Walgreens/boots.

[Name Redacted]

Yeah, there’s always folks that argue against the EF. It was nice when the Covid shutdown hit to not really worry about it. If your a 6 month EF is too much for you to save up then maybe investing shouldn’t be your first priority anyway.

[sirbumpsalot]

Yeah, there’s always folks that argue against the EF. It was nice when the Covid shutdown hit to not really worry about it. If your a 6 month EF is too much for you to save up then maybe investing shouldn’t be your first priority anyway.

Given most of you all are middle aged and/or elderly dentists...and you are doing it right, a 6-12 month EF is noise and thus the lost opportunity cost is minuscule

[byates1]

Buy a 89 suburban, tell your wife to go fuck herself, clean out all the bank accounts, hit the road.

Get blackout drunk almost daily. Smoke cigs, ski, barely shower.

[Timberridge]

Buy a 89 suburban, tell your wife to go fuck herself, clean out all the bank accounts, hit the road.

Get blackout drunk almost daily. Smoke cigs, ski, barely shower.

This ain’t the Bitcoin thread.

[byates1]

I know Sally

There is untold adventure and excitement investing in a life on the road. The most important investment you can make is in yourself.

[Bunion 2020]

Yeah cause shitting in a bucket or a gas station bathroom and showering every 3 days is sooooo exciting.

Whateves, if it works for you that is wonderful.

Kinda like an ex-boss who at 68 years old transitioned from Bob to Cindy.

[dunfree]

Given most of you all are middle aged and/or elderly dentists...and you are doing it right, a 6-12 month EF is noise and thus the lost opportunity cost is minuscule

Lol. The more the money amount is “noise” the less efficient it is. If you are a dentist burning 6-figures a year, you could do more. If you are driving a used suburban showering at truck stops the number is a bit smaller.

[byates1]

Yeah cause shitting in a bucket or a gas station bathroom and showering every 3 days is sooooo exciting.

Whateves, if it works for you that is wonderful.

Kinda like an ex-boss who at 68 years old transitioned from Bob to Cindy.

Is was humor. A bit of levity. Lighten up nance.

[Conundrum]

Is it just me or do gas station bathrooms seem a lot nicer these days?

[Danno]

Is it just me or do gas station bathrooms seem a lot nicer these days?

Gas station coffee is also orders of magnitude better than it was 30 years ago.

[AdironRider]

Yeah, there’s always folks that argue against the EF. It was nice when the Covid shutdown hit to not really worry about it. If your a 6 month EF is too much for you to save up then maybe investing shouldn’t be your first priority anyway.

To be clear, I'm not anti emergency fund, but a year is way overkill. 3 months is more realistic.

Even for the plebes, where the average household income is in the 70k range, that is like 15-20k.

There are very few emergencies in life where 20 grand won't get you out of that pinch, especially if you are a dual income household (as in it is very unlikely you both are unemployed at the same time) and have health insurance. 1) If you lost your job your expenses will decrease (daycare, commuting, etc). 2) You will probably eliminate bigger ticket items like home improvements or vacations during that time. 3) You can always get a job doing something slightly less than your career aspirations to pay the bills temporarily. I know this is TGR and the dentists wouldn't like to entertain that but most people will when push comes to shove.

Statements like "you must have six months liquid cash or don't even bother investing" is more bullshit class division than anything helpful. If anything, one should be putting the 10-15% into a 401k then relying on a credit card for emergencies than building a massive cash reserve first.

And in terms of gas station coffee, the mid-atlantic seems to have it dialed. You can grocery shop at those places even so you can get some TP for the epic shit that will arrive after your gas station coffee.

[Name Redacted]

To be clear, I'm not anti emergency fund, but a year is way overkill. 3 months is more realistic.

Even for the plebes, where the average household income is in the 70k range, that is like 15-20k.

There are very few emergencies in life where 20 grand won't get you out of that pinch, especially if you are a dual income household (as in it is very unlikely you both are unemployed at the same time) and have health insurance. 1) If you lost your job your expenses will decrease (daycare, commuting, etc). 2) You will probably eliminate bigger ticket items like home improvements or vacations during that time. 3) You can always get a job doing something slightly less than your career aspirations to pay the bills temporarily. I know this is TGR and the dentists wouldn't like to entertain that but most people will when push comes to shove.

Statements like "you must have six months liquid cash or don't even bother investing" is more bullshit class division than anything helpful.

And in terms of gas station coffee, the mid-atlantic seems to have it dialed. You can grocery shop at those places even so you can get some TP for the epic shit that will arrive after your gas station coffee.

Part of it is about saving up the 6 months EF before investing. Not some class warfare BS. Just financial diligence required to do it. If you are going to save for retirement, the EF should be a drop in the bucket anyway. And while it definitely depends on what you do for a living, and many other factors, like what kind of support network you have etc.

The whole point is to not have to touch your investments when something bad happens. Remember 2008? Imagine if you broke your leg in a ski crash during that time. Your investments where all of your savings are, are all way down, you can't do your job, you have medical bills piling up, and your home value is down 25% and banks aren't loaning money to anyone. Where are you going to pull money from? Your stock market investments that just took a dive? Those credit cards with 20% interest rates?

Look, I didn't make this shit up, some other people did and I just follow it, or try to, with what little money I do have. You do you and I hope it works for you. This EF just helps me sleep at night. Some people are more risk takers with money. I've been broke as shit most of my life as a ski bum, and I'm trying to not be back there again.

[Bunion 2020]

Different strokes and all that but I am with you. And IMO investing (not gambling) is about slow and steady over a long span of time gradually racking up the savings, 20-40 years.

[detrusor]

So D. was quitting your job? Hookers, blow and ski everyday for the win. Can’t put a price on experience….or STD’s


Sent from my iPhone using TGR Forums

[oldnew_guy]

If you are going to hold a huge EF, at least consider ways other than a money market fund to store it. By definition you probably don’t need it all on day one of your crisis.

[Name Redacted]

If you are going to hold a huge EF, at least consider ways other than a money market fund to store it. By definition you probably don’t need it all on day one of your crisis.

Examples?

[Timberridge]

Bitcoin. You'd be up 3% today.

[oldnew_guy]

Some combination of short term t bills, i bonds, CDs, etc.

[Name Redacted]

Some combination of short term t bills, i bonds, CDs, etc.

CDs are about >1% more than the rate on a MM account right now. And you don’t have access without paying the penalty. Lowest you can get is 6 months. Kinda defeats the purpose unless you want to develop a CD ladder.

I have i bonds outside of my EF. They are rarely a great investment. Only recently have they become attractive and hopefully that doesn’t last.

Maybe the TBills but once again, the payoff isn’t much more than the MM and they are more variable than the MM, until recently they were sub 1%.

And once again, this being a drop in the bucket compared to your retirement saving means that you are doing a lot of thinking about a very small part of your portfolio when you should be more focused on the bigger nest egg. Say you are shooting for a $1m retirement and your 6months is $50k. Why are you even thinking about that EF? It is 1/20th of your overall goal. Just set it and forget it.