What’s the best thing to do with your reserves ?

[Kelson Alexander]

Hello BP family, is it a good idea to keep my reserves in the stock market or some other investing vehicles (when I could get some kind of return on it) instead of having it seating in a savings account doing nothing?

[Erik W.]

@Kelson Alexander, hi and welcome to BP!

Put your emergency/reserve funds into a boring money market or savings account and only draw on them when you need them.  Reserves do not exist to MAKE you money; rather, they exist to cover emergencies and keep you from having to sell an asset or borrow money at the worst possible times.

C-19 caused the stock market to plummet about 30% back in March .  How would you have felt if you had $50,000 in reserves in the stock market on February 28th and you had to replace an HVAC unit on March 30th after losing $15K?