Good balance between savings and investing?

[quizbiz]

I barely have any money in my savings account. It is either in my checking or in an online broker. Within the broker, I do keep cash, but much of it is invested.

How dangerous is this?

[disneysteve]

Your question doesn't entirely make sense. If money is invested with your broker, meaning in equities, it isn't "cash".

Money in checking is just as good as money in savings except for the possibility that the checking acct. doesn't pay interest. Your emergency fund should be in a high yield savings account or possibly in laddered CDs. Money invested in stocks should not be counted in your EF.

[soninokla]

How many months of expenses do you have saved up, whether in a savings account, checking account, or brokerage account? The number of months should be dependent on your own personal circumstances, but you'd want a mimimum of 3-6 months. Do you have that much? You would want enough where you can sleep at night.

[Adirondak]

Your question doesn't entirely make sense. If money is invested with your broker, meaning in equities, it isn't "cash".

Money in checking is just as good as money in savings except for the possibility that the checking acct. doesn't pay interest. Your emergency fund should be in a high yield savings account or possibly in laddered CDs. Money invested in stocks should not be counted in your EF.

I don't think an emergency fund should ever be in a laddered cd. It's not immediately accessible in the case of an emergency, therefore defeating its purpose.

[Like2Plan]

Your question doesn't entirely make sense. If money is invested with your broker, meaning in equities, it isn't "cash".
.

Could the OP be referring to cash money in a sweep account ?

[disneysteve]

I don't think an emergency fund should ever be in a laddered cd. It's not immediately accessible in the case of an emergency, therefore defeating its purpose.

It would be quite rare, if ever, that you would need access to your entire EF at one time. For example, if I lost my job, had to fix my car or had a major repair in the house, I'd only need a portion of my EF.

Some of your EF should be instantly available. The rest could be spread out between, perhaps, 3 CDs maturing 1 month apart.

[maat55]

I'm comfortable with having my EF and Car fund in a high yield savings account.

We monthly add funds to our equity investments and our car fund. Since we pay cash for consumer products, we set aside money for our future wants.

As mentioned above, you should have and EF. You can choose to set aside a misc. fund for other wants. Do not just leave yourself unprepared for an emergency. Other than matching any 401k contributions from your employer, you should prioritize your EF, in a high yield savings account.

[reptile411]

I treat my savings like an investment. I put as much as I can away every 2 weeks in a high interest savings account then I match it in long term investments in my brokerage account. I get a steady stream of interest and dividend income every month. I do however reinvest all dividends and leave the interest in the account so my riches are always growing very fast. If I want money to play with I will day trade for it. Usually works out great for me but is highly risky.

[Johansen8]

I still think Dave Ramsey is the easiest to understand.

We are using Ramsey's plan and I have read both The Total Money Makeover and Financial Peace Revisited. Since this time, I have started to read Suze Orman's book 9 steps to financial freedom. I don't agree with her use of credit and always talking about FICO but she does define more of the investing items. However, I think her book is far more dry and is taking me a while to read it (I am a very avid, fast reader). But I am absorbing more terms.

Good luck and keep striving to be debt free and self sufficient!!

[FrugalIII]

I listen to/read both Ramsey and Orman. I like Ramsey's approach but don't agree with him that you should have NO credit cards. I am very responsible with debt but I do have credit cards to use only in emergency situations. I have a considerable savings too but don't like carrying cash when I travel. For people who are not responsible with credit, maybe Ramsey's theory is good. I'm getting irritated with Orman's tv show though. She seems a little too wierd in her "acting" when it comes to the "can I afford it" segment.