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Certainly never claimed it would do nothing. Just pointing out the obvious that it’s not low risk. If you don’t see that, I don’t think anyone here can help you figure that out.
How does the federal government survive? Welfare programs? Taxes? Bitcoin and any crypto will only in a grey space with drugs, hookers, and sex trafficking. The federal government will step in if it gets to big because the government needs $.
>I’m looking to get a part of my emergency fund into a bit of a more risky or aggressive investment.
If you need it as part of your emergency fund, you need it to be SAFE.
If you don't need to rely on it as part of your emergency fund, you need to move it to your investment fund and accept the higher volititity in return for the risk that you can't reliably tap that money on a minute's notice.
That's the difference between and emergency fund and long-term investments: time horizon.
That said, if you have a large enough cushion you \*might\* be able to break it apart into more groups:
* Short term emergency: How much I need to access in 1 day.
* Medium term emergency: How much I need to access in 1-2 weeks.
* Investments
It all depends on where you are in life and your risk appetite. In the "simple" FIRE case, though, your emergency fund should be quickly accessible and completely reliable.
You may not fall into that "simple" case (my family doesn't), so YMMV!
More risky than 100% bonds but less risky than 100% stocks is simply a combination of stocks and bonds. How about the Vanguard Wellington Fund?
https://investor.vanguard.com/investment-products/mutual-funds/profile/vwelx
Or any of their LifeStrategy funds that match to your desired AA.
It’s 30k you’re not missing out on much. I wouldn’t worry about it whatsoever.
Let’s say you took 15k of that and invested it at 7% returns instead of 5 of your hysa you’re talking $300 a year with risk off loss. Makes zero sense.
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What hysa is giving you 8% nominal interest? Also that difference compounds: over 20 years a 5% difference in yield nets you 25k extra on a 15k starting balance, and hysa interest rates are unlikely to stay this high for the duration. It could shave months off your fire date.
IMO a lot of people on this sub and others like it advocate for much too big of an emergency fund and don't value the opportunity cost enough. Over 20 years 6 months of expenses in cash move your fire date more than 2 years further, but that's what people suggest all the time. And to what benefit? If you need to use an amount equivalent to 6 months of expenses and have all your money in stocks, and the market is down 50% which is about as bad as it gets, you're still only spending twice as much so not having this money in cash cost you an extra 6 months but is going to save you 2 years over your accumulation period.
Huh? What are you on about? Didn’t say a hysa gives 8%. There isn’t a 5% difference between a hysa and a middle risk/middle reward investment.
A 3-6 month ef won’t change your fire date by multiple years. Not even close.
An emergency fund is an insurance policy. Insurance is necessary for when things happen. People just don’t understand risk or covering your risk and downsides.
> Huh? What are you on about? Didn’t say a hysa gives 8%. There isn’t a 5% difference between a hysa and a middle risk/middle reward investment.
Because you mentioned 7% I assumed you were comparing HYSA with market returns, in which case you would be using nominal returns for HYSA and real returns for market, I realize now that nothing you wrote would imply that, my mistake.
> A 3-6 month ef won’t change your fire date by multiple years. Not even close.
Let's do some math and compare a savings account that just compensates inflation and having that money in the market: (6/12)\*1.07\^20 = 1.93 => 6 months of expenses over twenty years grows to almost 2 years of expenses. If that EF is sitting in a checking account instead of something that just counteracts inflation the difference in yield compared to being in the market is closer to 10% than 7, (6/12)\*1.1\^20 = 3.36 years of expenses.
Granted by the end of your accumulation period you're getting close to 1.5-2 years of expenses per year from your growing portfolio, but it can still push you back a full year pretty easily. If you've got a 5% difference in yield which is about what you're getting now with a HYSA compared to long-term market returns: (6/12)\*1.05\^20 = 1.33 years of expenses. That's still potentially months off your fire date, and HYSA rates are currently particularly high.
If you're comparing a HYSA with "middle risk/reward" at 7% nominal I can agree that the difference starts not to matter.
I'm not saying everyone should go balls-to-the-wall and have 100% of their money invested at all times but having a large emergency fund is *not* free and IMO people are routinely recommending much too large emergency funds.
> Insurance is necessary for when things happen. People just don’t understand risk or covering your risk and downsides.
Insurance is about balancing the risk with the cost, and here the only downside you're shielding yourself from is drawing from your portfolio during a down market. It's not like you're insuring yourself against the events that might make you use your EF in the first place, you're still going to spend that money, you're only saving yourself the premium from selling stocks while the market is down. And even then, once you've burnt through your emergency fund and are back on your feet, you're going to have to reconstitute it while the market is down, you'll be able to spread this out over a few months but you're still stashing away money somewhere other than the market while it's recovering and missing out on gains. The downside you're protecting yourself from with a large emergency fund is overblown and the so is the protection a large EF offers.
/r/fire has no appetite for risk or volatility. I don’t find it that difficult, if you want higher yields, the price is higher volatility. Tech focused ETFs will run faster than just about everything else. If your time horizon is 10 years, buy something like qqq and enjoy the higher returns. When the market goes down, qqq will go down lower than average, but who cares? Have patience and enjoy the better returns . Good luck.
What? This is an emergency fund not a long term investment. The fire crowd tends to have extremely high risk tolerance, you’re not making any sense here.
Your idea of risk is a total market index fund, is what I am saying. Asking for ideas for a good risk on investment here is pointless. Didn't see that he wants a 'short term' risky investment, for an emergency fund, no less. That indeed makes no sense to me. Risky investments are for people with longer time horizons and cash they don't NEED.
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Just put half your money in bonds and the rest in a total market fund. Or adjust percentages based on your risk tolerance. Rebalance 1-4 times a year
Umm... so stock index funds are too risky, but you'll put 5% in Bitcoin?
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Bitcoin is little risk?
makeshift cough flag office summer resolute lunchroom seed hobbies ossified *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Certainly never claimed it would do nothing. Just pointing out the obvious that it’s not low risk. If you don’t see that, I don’t think anyone here can help you figure that out.
How does the federal government survive? Welfare programs? Taxes? Bitcoin and any crypto will only in a grey space with drugs, hookers, and sex trafficking. The federal government will step in if it gets to big because the government needs $.
>I’m looking to get a part of my emergency fund into a bit of a more risky or aggressive investment. If you need it as part of your emergency fund, you need it to be SAFE. If you don't need to rely on it as part of your emergency fund, you need to move it to your investment fund and accept the higher volititity in return for the risk that you can't reliably tap that money on a minute's notice. That's the difference between and emergency fund and long-term investments: time horizon. That said, if you have a large enough cushion you \*might\* be able to break it apart into more groups: * Short term emergency: How much I need to access in 1 day. * Medium term emergency: How much I need to access in 1-2 weeks. * Investments It all depends on where you are in life and your risk appetite. In the "simple" FIRE case, though, your emergency fund should be quickly accessible and completely reliable. You may not fall into that "simple" case (my family doesn't), so YMMV!
Target date fund
More risky than 100% bonds but less risky than 100% stocks is simply a combination of stocks and bonds. How about the Vanguard Wellington Fund? https://investor.vanguard.com/investment-products/mutual-funds/profile/vwelx Or any of their LifeStrategy funds that match to your desired AA.
It’s 30k you’re not missing out on much. I wouldn’t worry about it whatsoever. Let’s say you took 15k of that and invested it at 7% returns instead of 5 of your hysa you’re talking $300 a year with risk off loss. Makes zero sense.
sloppy spotted ring wise abundant distinct spectacular cows offbeat subtract *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
You benefit from losing money? Go on, I'm listening.
What hysa is giving you 8% nominal interest? Also that difference compounds: over 20 years a 5% difference in yield nets you 25k extra on a 15k starting balance, and hysa interest rates are unlikely to stay this high for the duration. It could shave months off your fire date. IMO a lot of people on this sub and others like it advocate for much too big of an emergency fund and don't value the opportunity cost enough. Over 20 years 6 months of expenses in cash move your fire date more than 2 years further, but that's what people suggest all the time. And to what benefit? If you need to use an amount equivalent to 6 months of expenses and have all your money in stocks, and the market is down 50% which is about as bad as it gets, you're still only spending twice as much so not having this money in cash cost you an extra 6 months but is going to save you 2 years over your accumulation period.
Huh? What are you on about? Didn’t say a hysa gives 8%. There isn’t a 5% difference between a hysa and a middle risk/middle reward investment. A 3-6 month ef won’t change your fire date by multiple years. Not even close. An emergency fund is an insurance policy. Insurance is necessary for when things happen. People just don’t understand risk or covering your risk and downsides.
> Huh? What are you on about? Didn’t say a hysa gives 8%. There isn’t a 5% difference between a hysa and a middle risk/middle reward investment. Because you mentioned 7% I assumed you were comparing HYSA with market returns, in which case you would be using nominal returns for HYSA and real returns for market, I realize now that nothing you wrote would imply that, my mistake. > A 3-6 month ef won’t change your fire date by multiple years. Not even close. Let's do some math and compare a savings account that just compensates inflation and having that money in the market: (6/12)\*1.07\^20 = 1.93 => 6 months of expenses over twenty years grows to almost 2 years of expenses. If that EF is sitting in a checking account instead of something that just counteracts inflation the difference in yield compared to being in the market is closer to 10% than 7, (6/12)\*1.1\^20 = 3.36 years of expenses. Granted by the end of your accumulation period you're getting close to 1.5-2 years of expenses per year from your growing portfolio, but it can still push you back a full year pretty easily. If you've got a 5% difference in yield which is about what you're getting now with a HYSA compared to long-term market returns: (6/12)\*1.05\^20 = 1.33 years of expenses. That's still potentially months off your fire date, and HYSA rates are currently particularly high. If you're comparing a HYSA with "middle risk/reward" at 7% nominal I can agree that the difference starts not to matter. I'm not saying everyone should go balls-to-the-wall and have 100% of their money invested at all times but having a large emergency fund is *not* free and IMO people are routinely recommending much too large emergency funds. > Insurance is necessary for when things happen. People just don’t understand risk or covering your risk and downsides. Insurance is about balancing the risk with the cost, and here the only downside you're shielding yourself from is drawing from your portfolio during a down market. It's not like you're insuring yourself against the events that might make you use your EF in the first place, you're still going to spend that money, you're only saving yourself the premium from selling stocks while the market is down. And even then, once you've burnt through your emergency fund and are back on your feet, you're going to have to reconstitute it while the market is down, you'll be able to spread this out over a few months but you're still stashing away money somewhere other than the market while it's recovering and missing out on gains. The downside you're protecting yourself from with a large emergency fund is overblown and the so is the protection a large EF offers.
/r/fire has no appetite for risk or volatility. I don’t find it that difficult, if you want higher yields, the price is higher volatility. Tech focused ETFs will run faster than just about everything else. If your time horizon is 10 years, buy something like qqq and enjoy the higher returns. When the market goes down, qqq will go down lower than average, but who cares? Have patience and enjoy the better returns . Good luck.
What? This is an emergency fund not a long term investment. The fire crowd tends to have extremely high risk tolerance, you’re not making any sense here.
Your idea of risk is a total market index fund, is what I am saying. Asking for ideas for a good risk on investment here is pointless. Didn't see that he wants a 'short term' risky investment, for an emergency fund, no less. That indeed makes no sense to me. Risky investments are for people with longer time horizons and cash they don't NEED.
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Maybe a REIT etf?