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WOW!! Personal emerg fund complete TOMORROW--any higher rate options?

March 13th, 2014 at 01:58 pm

Hi guys

Added $1287 more to the personal emergency fund.., got approximately $500 left to go to reach $18000 and then that goal is REACHED!! I get paid tomorrow and per my projections will have the cash.. so finishing it up tomorrow.

(jumping up and down)

So.. if I get the ok for the job contract renewal in the next week or so..are there any higher rate options for this for 6 months or a year (will find out term of renewal too). Any ideas.

It is currently at Barclays at .9

I would not have been so motivated (and CONVICTED) without you guys. Thanks!!

Rachael

10 Responses to “WOW!! Personal emerg fund complete TOMORROW--any higher rate options?”

  1. Looking Forward Says:

    That seemed fast! Big Grin

  2. Another Reader Says:

    Since it is an emergency fund, it needs to be in cash or cash equivalents. High yield savings/money market accounts make the most sense, and 0.9 to 0.95 percent is about the best you will do.

  3. snafu Says:

    Congratulations for meeting a target. Good on you. I'll risk being 'flamed' because 0.9% is abysmal and you are actually losing to buying power. You need to examine Your risk tolerance as 'sleep at night' parameters. I see costs going up, up up for the expenses I would fund from emergency savings. To that end I've been DCA . I expect the value to change a bit and am more terrified of interest rate products like Certificates of Deposit or Bonds. An ETF is very liquid, cashed in two business days in segments of my choosing. I think we need to assess risk

    Even if it were to support unemployment, I'd only cash what was needed month to month. In our case, we have other set aside funds for maintenance/home improvement that would be re-directed to higher need.

  4. creditcardfree Says:

    I'm going to disagree a bit snafu. Racheal is in a very risky situation as it is with these rental properties. She needs cash on hand that will not go down AT ALL. This is the only thing that will save her if there issue with the properties.

  5. MonkeyMama Says:

    Awesome! 0.9% is excellent, and I would certainly keep it in cash.

  6. Rachael777 Says:

    Guys. THANKS FOR THE WONDERFUL THOUGHTS. Here is the plan. as creditcardfree mentioned I have all these rentals and right now the '6 homes' part of them is not stable and I have not finished building my rental emergency fund ... so I will keep this at Barclays for now.. but I will reevaluate putting some in higher rate but safe (unclear what??thoughts??) if the renewal works out and will put more in higher rate after I get my $36k for the rental emergency fund built up. 'Only $26k left to go".. GROAN!! but the tax refund (if it ever shows up should be a huge help, and this guy who owes me $6k and still need to ask Aunt for the $7k she said she would give if I got the house.. Been afraid/emotional to ask her. I AM TOO emotional sometimes. Thanks guys. Smile.. When I have the 36k I will basically feel safe w the homes (and thsi new property manager) and will start saving and moving on w no restrictions. Althought .9 is one of the better saving rates out there it is still pretty much nothing..so I will definately look to move it asap (as soon as I have my rental fund built). I am only gettting $162 a year w that.

  7. Rachael777 Says:

    Snafu. would you share more on what DCA means and what an ETF is and more recommendations. Trying to learn. Smile

  8. Another Reader Says:

    DCA is "dollar cost averaging." The idea is to put money into the market over time instead of all at once. You buy more shares when prices are low and fewer shares when prices are high.

    ETF is an "exchange traded fund." It's like a mutual fund, except the shares are traded throughout the day like stocks. The selling prices may be at a discount or premium to the underlying net asset value.

    There is nothing that is "safe" except FDIC insured deposits or short term US treasury paper. Everything else has downside risks. Emergency funds should not be invested. You can ladder CD's along with high yielding savings and money market accounts, but there is not much benefit to that right now because interest rates are so low.

    "Savings," especially emergency savings, should be distinguished from "investments." Savings are funds which you may need to use. Investments are made with funds you intend to leave alone for many years. In both cases, the earliest you anticipate needing the funds should determine where you put the money.

    In your shoes, I would check out some basic investing books from the library and read the referenced web sites. You will learn the terminology and most of your questions will be answered.

    While you are at this, have a look at where your money is in your 401k and IRA. These are investments, and you want to get the best return over time at the lowest cost.

  9. scfr Says:

    Your current rate of 0.9% is very good. The only savings account with a better rate that I am aware of is Smarty Pig at 1% and that bank has some unique features that makes it a bit more cumbersome to deal with and so I think Smarty Pig is better as an "extra savings bank" and not your primary one. It probably makes the most sense to stick with Barclay.

    You may want to follow the DepositAccounts.com web site to see if better savings opportunities come up, or if you want to pursue accounts with bonuses, but really for now I think you've got your savings in a good place.

    So glad creditcardfree spoke up about the "risk" issue. I agree with her 100%. I always find it interesting when people gloss over the risk involved in owning a business or properties. Indeed, the argument could be made that your "portfolio" is overly risky since it is so heavily reliant on the real estate market, but it sounds like owning properties is your "thing" and you know a lot about it and have made a real career of it, so ... so be it! Good for you for making such steady progress towards your EF goals!

  10. Rachael777 Says:

    Thanks for the feedback scfr.. agree portfolio is heavily reliant on real estate right now and I am looking to change that balance and saving investing as much as I can (after building the emergency funds). Onward. I will feel better once I am more into this 5 year payment plan and when the emergency fund is built.. thanks guys. Smile

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