I generally believe 12 months of cash equivalents. That would allow you to ride out all but the most brutal of downturns without having to sell a single stock to pay your bills.
Yeah, I started at 3/6 months which was what my grandfathers yardstick for such things was. Right now my cash equivalents is hovering around 15 months. If I also consider my "play fund" of crypto that bolsters it up to around 22-24 months. Which I could squeeze further by tightening spending more if an emergency did happen. Past that I add in 1/2 the available credit lines I have on credit cards for "really extreme emergency where I have to live off cards" and it stretches to a bit past 40 months.
I have thoughts on this and in no way am I saying that I’m right. But knowing that my dollars are just melting value inside a bank account is too much for me to bear. So I keep about 6 months of mortgage payments in a CD plus my checking account. I put my “savings” into a mix of SPMO/VGT and some cc income funds that pay me about $500/month that I DRIP but could collect in a pinch. If that’s too risky, throw it in a yield or dividend fund like VYM or DGRO. I also have $150k in gold and silver (purchased in 2019ish for $40k). If I deplete my CD, I’ll sell an ounce of gold or a few shares of VGT to cover. Even if the market crashes, so be it, I’ve made far more money and sharing a few shares in an emergency won’t kill me, but let my cash rot in a bank, fuck that. I had this very conversation with myself when I bought my gold in 2019. I asked myself, do I trust gold to go up more or do I trust dollars to go up more? Once I recognized that the gold was a way better emergency fund and just like channeling fiat into an asset…the easier and less scared I got about downturns. I made the right choice. If nothing else, at least park some of your fiat in some physical gold or silver. It may fluctuate but I doubt you’d take a bath unless you did the panic buying that was going on. 5-10 ounces of gold is never a bad idea and easily liquidated. And if you’re that concerned about selling in a downturn, get a HELOC until you ride out the downturn.
This was almost my exact exercise. How long could I live off of credit/HELOC/gold/etc without having to sell something at a loss. I used to keep much larger balances before 2019 but not anymore. My accounts are large enough and old enough, that as you said, even if I have to sell at 30% off from today, I’d still be in the green. Get some gold, even if it goes down 10-20% from here, it’s a nice thing to hold on to.
I don't know anyone would live other wise. I keep 6 months of expenses in savings and another 6 months in a 6 month cd. Also usually have another few months in my checking account just because.
How dare you criticize my CD! However you make a really valid point about just parking it in SPAXX.
See RE thread I'm pushing back towards RE to bridge the gap between now and being able to access retirement accounts. Stocks for current income are just so inefficient with taxes. Use to work better before reducing dividends and increasing buybacks became the standard.
This is why I stress cash equivalents. Rotating 3/6 month treasuries, money markets, etc. Something you can easily convert to cash without penalty to avoid selling stonks at a downturn.
Inflation is a hell of a drug. At the chipotle near me the cost of just a chicken burrito nothing else has gone up 100% over 7-8 years all the while portion size has gotten smaller.
miss? There are no operations of note. All that will matter is what he says.
