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Originally Posted by LivingAlmostLarge
I was thinking about emergency funds, and realized, that for DH and I, we invest our emergency funds in stocks. Wowsa, usually people suggest keeping 3-6 months of cash on hand.
But then I realized that part of the reason we do this is because we keep a lot of cash on hand in general. We have about $15k invested in a taxable account as our EF. We also have $15k cash on hand probably going to hit about $20k soon to pay DH's tuition bills which are $10k/semester = $30k/year.
So I always have a pretty large cash stash. Does this make sense? Do you keep your EF in cash? Is this a bad idea?
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We have 12k in Cds (CASH) right now, which is 3 months expenses.
We are in process of creating a "mortgage paydown fund" to increase the EF, but this additional money will be invested in a mutual fund (PRPFX) in an effort to beat the 5.75% rate we have on our first mortgage and 7.25% rate we have on our second.
The second part of this will need to reach 100k+, and I don't see the reason to keep that much in cash. In addition this fund could be used to pay bills if either spouse became unemployed for a significant period of time.