6/1 I've often heard you should keep 3-6 months of current expenses on hand
fo an emergency or if laid off. I could of course keep it in checking
but that earns under inflation. My broker's money market pays shit
too. What would the MOTD finance gurus suggest?
\_ Some cash is a good idea. I keep a few months' worth around--I
know I lose interest money on it, but I'm paying for the
convenience of having easily accessible money. -John
\_ I think having them in stocks and mutual funds is fine since these
can be easily converted into cash. of course don't have all your
money in one volatile stock. A diversified bunch of stocks and
funds should be good enough. I keep the money in my checking
and money market savings accounts to a minimum.
\_ Stocks and mutual funds are not fine for emergency expenses,
as the last thing you want is to be in an emergency situation
(just lost your job/had major medical expense) and have to
sell your assets at a significant loss (which can happen no
matter how diversified you are). -tom
\_ What's wrong with selling at a loss? I would be more
concerned with prematurely selling a stock that has
significant gains and thus taking a tax hit. Sure, if
you sold at the bottom of a cycle, you would miss
the run up, but if your asset is in cash, you would've
missed the run up (or several of them) anyway. I stand
by my recommendation. The important thing is not cash
per se, but more liquid assets that can be converted to
cash within a short time. I would much rather have
60K in stocks and mutual funds and minimal cash
than have 30K in cash. Unemployment insurance and
severance, if your company has it, would provide even
more room for maneuvre, so you don't really need to
sell everything at one go, just what you need for the
expenses of the coming month.
\_ Sorry, I didn't get any further than "what's wrong with
selling at a loss?" -tom
\_ it's okay, it's more for others than for you.
you obviously need more investing-fu to follow.
\_ ooh yeah, I haven't figured out the brilliant
strategy of selling stocks at a loss to cover
living expenses. -tom
\_ all other things being equal, it's better
than selling stocks with gains, but I
guess that's beyond you.
\_ Nice job deleting the discussion when you
were proven to be a moron. -tom
\_ huh? imagining things again?
\_ Yes, stupidity is beyond me. -tom
\_ feel free to let your money
rot in the bank, or just hide
it under your bed.
\_ Gee, my money's doing a lot better than
the stock market over the past 5 years.
And the point isn't that you should
put all your money in cash; it's that
you should have some reserve aside,
in cash, in case of emergencies.
If you had all your emergency cash in
stocks in March 2000, and you had an
emergency later that year (like, say,
you lost a job and couldn't get one
due to a flooded job market...gee, that
kind of thing never coincides with
a stock market downturn, right?) you
would have taken a bath. -tom
\_ Not true.
\_ <raising my hand> --scotsman
to my credit, the wash i took was
because of an idiotic and possibly
fraudulent accountant against whom
I probably would have had a case if
1) I had had money to pay a lawyer,
and 2) had any chance of getting
anything out of him.
\_ nobody said you should put all
all your money in tech stocks.
Even heard of bond funds and
value funds? Sorry to know
you took a bath on tech stocks
since Mar 2000. Do you even
know what diversification means?
\_ My portfolio is worth more than it
was in March 2000. Moron. -tom
\_ heh, you have pretty low
standards.
\_ you do know you only pay taxes on the gain portion
not the entire thing, gains are always better than losses
\_ yea, but sometimes you get lucky and holds a
stock with a 400% gain, with good prospects for
further gains. In such cases, you want to hold
and hold, instead of being forced to sell.
\_ just sell it, use the money for the
emergency and just invest the gains back into
the same stock since that is supposedly extra
money
\_ And this happened to you...when? and more than
once? You're really dumb in this area. Talk to
a professional.
\_ actually, if you are an above average
stock investor, it's not hard to get one or
two 5 baggers, and a bunch of doublers
every few years. as for "professionals",
most earn their keep by taking your money.
spend some time to learn to invest, don't
be a lazy arse.
\_ ING isn't bad. Pays about 3% and it's pretty quick to get your
money out. (about 3 days). Of course, I'm no finance guru.
\_ Netbank is 2.7%, and can be accessed by check or bank card,
no fee for 6 or fewer withdrawls per month.
\_ ING is very stable but keep in mind that even with a 3% payback
your money is still depreciating faster than ever due to the
weakening dollar and the rise of relative cost of living in the
United States. So far I've put 1/2 of my savings into ING and
1/2 into foreign money. Of the foreign money, 2/3 are in New
Zeland 3 month CD (+5% interest) and 1/3 are in Euro. They're
doing a lot better than ING. There's a reason why many people
are moving money out of US. Warren Buffet already moved +100
billion dollars out of US.
\_ I heard that 3-6 months is for during okay economy. In a bad
economy it should be 12 months if you have a mortgage.
\_ I keep 1/3 in a money market account and 2/3 split between
two 6-month CDs with maturity dates offset by 3 months.
That is, every three months one of the two CDs matures.
I like the balance of some money available right away
and the rest available soon yet earning some interest. |
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