Emergency fund advice

[Anonymous No.6857752]

I'd like to set up an emergency fund in case I lose my job or something. Most of the articles I read online say to keep 3-6 months of expenses in cash, but I'd like to keep some of that money invested. I hate the idea of having money laying around and losing value to inflation.

At the moment, my evil plan is to keep 3k in cash and put 15k in a taxable Vanguard account (invested in a balanced fund like VTMFX). What stock/bond ratio do you suggest? Do you know about a fund that I should consider?

[Anonymous No.6857833]

>>6857752

>taxable

I'd def open a Roth and max it out with 11k if you want to go all in an index fund. You could do $5,500 for 2017 (cutoff is 4/17/18) then another $5,500 for 2018. Do that before you go taxable

[Anonymous No.6858009]

>>6857752
Stay away from bonds, they are shit-tier investment and will continue to be so in the near future. The interest rate has been near 0 for the past decade and it'll continue to be near 0 for the next decade as well. This economy is running on easy money as the life blood and the life support isn't going to come off for too long before the economy tanks again.

>3-6 month expenses in cash in a meme. If you have assets you can take a loan on those assets if you really need that liquidity. Don't keep money in cash if you have access to any form of credit aside from payday loans.

As for a vanguard funds, I prefer the Vanguard High Dividend Yield Index Fund (VHDYX). The fee's aren't that low but the rate of return is rock solid even when taking into account recessions like 07-08. Since the fund gets rebalanced to only the companies paying t he most dividends, you know you're not holding a portfolio of shit.

[Anonymous No.6858482]

>>6857833
>open a Roth
Thanks for the advice. I'll need to do some more reading about early withdrawal penalties.

>>6858009
>Vanguard High Dividend Yield Index Fund (VHDYX)
I think I'll pass on this. It has slightly underperformed the S&P over the last 10 years and doesn't appear to be any less volatile.

[Anonymous No.6858608]

>>6858482
>I'll need to do some more reading about early withdrawal penalties.

You can take out your initial contributions at any time.

For example, you max out your Roth IRA with $5,500. You gain 10% and end up with $6,050.
You can withdraw the $5,500 at any point, no penalty. Your gains (the $550 left in the account) will be taxable and subject to penalty if you withdraw before you're 59.5 y.o. though.

Treat it as a long-term savings account that you shouldn't touch, but it's there if you really need.

[Anonymous No.6858698]

>>6857752
Just go with a total stock market fund

I have my a portion of my retirement accounts invested in that and my personal/taxed account in Wisebanyan. No fees, I just deposit money and I'm currently getting 41% returns.

[Anonymous No.6858742]

>>6857752
A Total Stock Market or S&P 500 index fund that are dirty cheap with a net expense ratio around 0.04%.

Also consider an Emerging Markets or Total International Stock Market kind of position. It has outperformed the S&P and diversifies you out of the US. Foreign stocks are cheaper valuation wise and are performing better.

[Anonymous No.6859292]

I have my emergency fund in a Safety Net portfolio with Betterment. Its a 60/40 bonds/stocks blend and it had been performing pretty well for me.

Rest of my funds are in Roth IRA, Traditional IRA, and Build Wealth allocation.

I know some will bash Betterment, out any other wealth management funds that aren't vanguard. It works for me.

Your mileage may vary.

[Anonymous No.6859312]

>>6858742
VXUS is another vanguard option (everything except US stocks)

[Anonymous No.6859368]

>>6858482
When you're looking at charts, especially those that provide a yield, you need to ensure that you're properly calculating the dividend distribution into the equation. I believe morningstar does this by default, but yahoo/google won't.

[Anonymous No.6859375]

>>6857752
Usually it's recommended to keep your emergency funds in accounts that are easily liquidable. You're not supposed to beat inflation with your emergency fund. Anything over your emergency fund you invest. How much is inflation on 3-6 month expenses in the long run?

Can we go back to crypto. This kiddie finance shit is boring.

[Anonymous No.6859437]

For your purposes crypto would probably be unstable. Id say put your savings youd want to invest in a reliable stock that pays a good dividend. Make sure its something thats established enough to not disapear overnight. Examples; Caterpillar, McDonalds.

[Anonymous No.6859577]

>>6859312
Yes, VXUS is solid for total international. Or IXUS for the iShares equivalent. These tilt toward more developed nations like Japan and UK.

For emerging markets, VWO (Vanguard) and IEMG (iShares) are what you would want. They tilt more towards China and second-world countries (China, Brazil, India).

I actually bought MCHI (iShares), which has a high expense ratio, but is purely a China only ETF. 60% 52-Week performance and smokes the S&P 500.

[Anonymous No.6859933]

>>6858482
Roths are pretty comfy because you can also take money out for certain approved expenses. Off hand, I think you're allowed to use money for a downpayment on a mortgage, tuition, and medical bills.

[Anonymous No.6860027]

>>6859577
VWO sounds cool. I'm mostly in Vanguard small cap funds. I would bet on China.

[Anonymous No.6860040]

>>6857752
Emergency funds are a WASTE of money, huge SCAMS designed by the (((bankers))) to keep your money rotting in a 0.0001% interest rate account while they lend it at a 10% reserve rate.

Just go ALL IN on stocks if you're too much of a pussy for crypto.

[Anonymous No.6860944]

>>6859933
its a roth. all distributions after 5 years are tax free