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What do I do with $55,000 sitting in my savings account? I've gone through some life struggles, but finally back on my feet. I fortunately have my 401k intact, and this money is more a rainy day, so it needs to be accessible within 2-3 weeks as cash. Any advice? I'm getting 1.2% right now on it with Discover, but I don't know if I can do better. I know it's not alot, but if I could get even an extra 1% per year, that enough to take a little trip.
If you think this is more money then about 6 months of rainy then invest it elsewhere.
Life is so difficult these days. We all work very hard to make a living, and keep saving money.
A couple years ago, we were told "cash is king", but now, the world is flooded with cash injected by the governments, and we have to figure out with something better than cash.
Somehow, our financial enemy is our own government.
Life is so difficult these days. We all work very hard to make a living, and keep saving money.
A couple years ago, we were told "cash is king", but now, the world is flooded with cash injected by the governments, and we have to figure out with something better than cash.
Somehow, our financial enemy is our own government.
Work on improving your income and cut down expenses.
The advice of 6 to 9 months of an emergency fund is a real generic statement and individual situations should be looked at more than the latest advice from Suze Orman. Remember she is giving advice to the masses.
First, you need to consider what is the emergency for? Is it to continue to pay towards your house that you owe $50,000 on? If so, eliminate the emergency and then rebuild your savings. You will also be receiving around 4.5% (depending on your mortgage rate) with that method.
Another way to eliminate the need for an emergency fund is to use your savings to produce income that sticks with you. For example, investments in bonds can pay you income regardless of your situation at work. There are even options that can stage your investments to pay you monthly. Honestly with $55,000 in savings and the need of $2,000 a month to cover your overhead, you do not have quite enough money for that option. However, with discretionary income of nearly $35k annually you could have a portfolio within 10-15 years that produces enough income to cover your current overhead.
1.2% in no good. If you want something safe and liquid buy 10 year treasuries paying around 3.25% and they are exempt from local and state taxes. There are of course additional risks associated with bonds. Also based upon what you have stated, $55k sounds like too much for your emergency fund. Sounds like you need to talk to a financial advisor.
The easiest thing to do is cut down expenses. You don't need special skills, experience and a degree to do that. I have done it myself. Do you follow Dave Ramsey?
The advice of 6 to 9 months of an emergency fund is a real generic statement and individual situations should be looked at more than the latest advice from Suze Orman. Remember she is giving advice to the masses.
First, you need to consider what is the emergency for? Is it to continue to pay towards your house that you owe $50,000 on? If so, eliminate the emergency and then rebuild your savings. You will also be receiving around 4.5% (depending on your mortgage rate) with that method.
Another way to eliminate the need for an emergency fund is to use your savings to produce income that sticks with you. For example, investments in bonds can pay you income regardless of your situation at work. There are even options that can stage your investments to pay you monthly. Honestly with $55,000 in savings and the need of $2,000 a month to cover your overhead, you do not have quite enough money for that option. However, with discretionary income of nearly $35k annually you could have a portfolio within 10-15 years that produces enough income to cover your current overhead.
1.2% in no good. If you want something safe and liquid buy 10 year treasuries paying around 3.25% and they are exempt from local and state taxes. There are of course additional risks associated with bonds. Also based upon what you have stated, $55k sounds like too much for your emergency fund. Sounds like you need to talk to a financial advisor.
So there are 'risks' with Bonds. This isn't a safe haven liquid emergency fund.
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