7 comments

  1. I like this post because I do not have an emergency fund either. I don’t necessary need to have cash sitting idle in a savings account for emergency purposes. God-forbid there is a need, I’ll access cash in my highly liquid investment accounts or cash value life insurance where my my dollars are hard at work.

    Nice take on emergency funds, I enjoyed reading!

    1. Glad you enjoyed the read. Just like you, I’m not a fan of having cash sitting in idle (even if making 1.25% APY). That is why I’ve adopted an “unconventional” approach for handling emergencies (god forbid) whenever they show up. Thanks for stopping by and leaving a comment!

  2. A refreshing perspective! I also do not have a bunch of money sitting around in cash equivalents. Insurance, a line of credit, borrowing off your 401(k) – strategies for savvy investors that work in case of an emergency. I know this is sacrilege to many in the FI community, but STOP stashing funds in a money market account and accelerating the pay down of your home mortgage when you are in your prime earning years and could be making that tied-up money work much harder for you. No guts, no glory FIRE seekers!

    1. Hi Kat, glad you enjoyed the read. I agree with you, even within the PF world, not having an emergency fund or having one that doesn’t follow the typical option of using an online savings account is considered a sin. I think it all boils down to peace of mind so as long as you have that then everything should be fine. In my case, my strategy does exactly that so life is good.

      1. After noticing that I’m out of sync with the PF world in a few areas, I’m realizing that it’s likely due to my heavy investment in real estate. There is a push/pull of growing a rental portfolio – knowing you are investing in your future by taking bigger financial risks in the present. Few real estate investors can bypass a big chunk of liquid change (like an emergency fund) when its time to make their next purchase. So, RE investors (& other aggressive, growth-oriented investors) are particularly interested in strategies (like those in your post) for handling financial emergencies that do not involve money “sitting on the sidelines.” Thanks again for providing a nuanced approach.

        1. I wouldn’t necessarily call it “out of sync”, remember what the “P” stands for in PF!. Funny you mentioned real estate because I’m also into REI. Not the biggest part of my portfolio but I enjoy it. I have 3 properties and I’m currently looking for a 4th one. Having said that I agree with you, having money you can’t touch because it’s for an “emergency” is a tough one for me. Heck, not having the liquidity to capitalize on a deal could be considered an emergency itself :).

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