Safe savings things

fris

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mod, feel free to merge if this doesn't deserve it's own thread

This has come up a few times in the investment thread, but might work better on it's own.

where are people keeping emergency funds? chunks of cash you don't intend to use for a few years?

I have some cash in a Make Wealth Your Own | Wealthfront account (0.1%, booo) and https://www.marcus.com/us/en (0.5%.. yay?).

Are CD's doing better than 0.5% right now? is it worth looking into Money Market accounts or bonds indexes?
 
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Jysin

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CDs at 0.5% .. yuck. I remember taking first contracting gig years back and nabbing a $20k 5yr CD for like 6% yield (2003/2004).

I used to park my emergency funds in Vanguard Short Term Bond index that used to yield around 2%. This was well before corona and whatever shenanigans are happening in bond markets these days.

There is a saying "TINA" (There is No Alternative (to market investing)) because inflation is killing cash / low yield accounts.

I honestly don't have an answer for you.
 

Haus

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I have a tiered approach.... This is for my "emergency"/stash liquidity pool.

I call this pool of assets overall my "liquid fund", meaning it's assets I can easily liquidate if needed. Right now it's heavily in crypto, but with stocks, "savings", an on hand cash fund, and a very small cache of silver bullion I picked up on a lark in the past. Categories are :
  1. Crypto - This is spread across the "heavies" being BTC and ETH, and speculative altcoin investments.
  2. Stocks - This is my "playing around" stock speculation area, balanced with around 50% of it being in more stable ETFs
  3. Savings - This is static savings in interest earning accounts. That is currently $DAI stablecoins making interest through Polycat finance. (Around 10.5% apy currently), combined with a small portion in a traditional savings account for quick access in case of emergency.
  4. Liquid - This is cash on hand stored in a safe location
  5. Silver - A small pile of silver rounds I picked up around 15 years ago.
Current distribution :
1629469988434.png
 

Hateyou

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The problem with calling that liquid pool Haus Haus is that most of it isn’t. If your crypto or stocks have an overnight black swan event you’re fucked. If something crashes severely and there’s no funds, it’s gone. Those can technically go to 0 overnight.

I have no answer for the OP (except don’t put it in fucking crypto). I think everything is at risk right now in the US, including cash. I pulled a huge chunk of stocks and sunk it into finishing my basement/patio. I figured house is kind of inflation proof and is still an investment. It really hurt pulling that much out of my investments but they’re something we can enjoy at least, and it’s safer if there’s a really bad market event.
 
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Haus

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Advising someone to put emergency cash funds into crypto is insane to me. Especially as we are coming back up to highs.

The way I see it I operate on a scale of how essential the money it. The stuff in cash/stable coins are the funds I know I need to always have stable and available (i.e. the true "emergency" fund). Above that I shift to less risk-averse storage as a means to try to grow that egg more.

Also note his definition of "chunks of money you don't intent to use for a few years". Look back over BTC pricing even and it's proven that if you're holding it multiple years you're going to for the most part be up on that investment even with it's volatility. I also see ETH somewhat is that same bucket now as it's maturing.

So if you want to boil it down to just exactly what the OP asked about being a place to store wholly stable funding I'll still stand by putting it in a stablecoin, then using a vault service to make interest on it.

1629472743264.png

That's on polycat.finance , but if you want a "less new" exchange you can find those but at a slightly lower return rate.
 

fris

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there's a larger consideration of what is your mix. i'm not comfortable with 70% crypto allocation :)

Haus Haus 's pie chart shows ~16% savings (8.2% savings + 2% liquid). i think this isn't far off for most of us. While for crypto, some would view crypto as too volatile for their taste, there's a thread to further discuss. I think for this discussion, having readily available funds to buy post-dip tends to push most to a more universally accepted reliable vehicle. his 8.2%, while in crypto, is in arguably the most stable part of crypto.
 

Haus

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I guess another question here would be how you define this "safe savings" as an amount. For me, I work off an extension of what I was taught by my grandfather growing up which was "Estimate what your total expenses for a month are, and ALWAYS have at least 6 months worth available to you". In his world that was quite literally stashing cash hidden around the house (he was post depression era and didn't trust banks in the least).

I've extended that to 12 months, and extended storage to places I can earn returns on it to try to outpace inflation.
 

swayze22

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I have an "emergency fund" worth of cash sitting in Voyager in USDC collecting 9% APR. If you are worried about stablecoins then I'd keep a chunk in one of those extremely low interest savings right now. I have one for larger short term non-recurring expenses coming up, e.g. within next month. I don't see a need for some of the historical vehicles such as CDs or money market or "high yield" savings because the rates are shit
 

Flobee

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'Safe' is going to be relative to what you see coming around the corner. I don't think its unreasonable to see institutional collapse as a possibility, even if remote. In such circumstance bail-ins are not unheard of so having funds in bank custody may not be as safe as we're accustomed to. From that lens holding crypto in a sovereign held wallet could be considered more safe.

I hold some cash in a bank, some in a custodial service (Blockfi) earning interest as stablecoins, and some on a wallet that I have the private keys for. Investment spread uses a similar approach. I don't think there is anything safe right now from a traditional perspective. I find Bitcoin to be the safest asset so thats where I put my long term investment money generally.

If you're looking for yield on cash then there is no option outside of crypto that will yield over 1% that I'm aware of.
 
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