investing

[jmjj215]

Re: investing

I don't think it would be good to have an emergency fund in a CD. One of the purposes of the efund is to have the money accessible w/in a reasonable amount of time. (For me that's 3-5 days).

[lovingyoualways]

Re: investing

I agree. Cd's are only really good if you need the money in 2-3 years and in some books they recommend this as a way to save for a down payment for a large purchase. But definately not for a emergency fund since the majority have a early withdrawl fee.

[baselle]

Re: investing

I agree. Cd's are only really good if you need the money in 2-3 years and in some books they recommend this as a way to save for a down payment for a large purchase. But definately not for a emergency fund since the majority have a early withdrawl fee.

One of the tricks of investing with CDs, even to fund an emergency fund, is to ladder them up. Works best if you have most of the emergency fund. You put one month of living expenses in a 6 month CD. Do the same thing next month, then the next. By the 5th month, your 6th month CD can be taken out if needed or renewed if you don't have an emergency. Then you keep going, round and round.

When the long term rates start picking up, you lengthen the rungs of the ladder. Instead of 1 month every 6 months, stretch it to every two months to a year.

[rchiang]

Re: investing

Mark Cuban put up an excellent blog post on "What's an Investor?" at:

http://www.blogmaverick.com/entry/1234000660060351/

I think he sums it up far better than I ever could.

-Ray