All Forum Posts by: Kevin Coggins

@Brad Schultheiss It's just 10 months of fixed expenses - I'd guess I could truly live off of it for about 6 months. Always ways to get the money that I need, but the ideal goal is to be in a position to not have to take any sort of loss to get that money. Maybe I am being overly conservative on my emergency + reserve, but it'd really such to have to pull money at a 20% loss when I was chasing 8% returns. 

Somebody above mentioned how safe Utilities are, but I owned the ETF and had it down over 20% at one point. Granted, I sold it and made over 20% return, nothing is really "safe". I also own NRG stock and had it down 60% at one point....

@Ernest Chamblee This money would be separate from anything I'd be using to invest in a deal, unless of course it grew into $15k then I'd move it around a bit. I have other money tied to the stock market that I'm slowly selling/can sell to fund a deal. Then there's always a 401k loan that I could do if necessary...and my wife is about to get back to work so her pay minus daycare costs should bring some solid money in to invest.

As far as going for higher returns, since I have my emergency fund, plus a reserve account, I'm thinking my $250/mo I can be more aggressive with.

I don't really follow the "have access to cash 24/7" - since with credit/debit cards access to my money have never been an issue. Outside of having a couple hundred bucks cash, I'm not really a fan of storing thousands at my house - I'd rather have it FDIC Insured and making me 1% at least.

This guy e-mailed me who is a Nigerian Prince, if you wire him $5k he will send $20k...

Would you wire this guy $5k? It seems silly, but people seriously do this. You're in the same situation, don't get burned over the thought of "making" $2k!

@Brad Schultheiss My emergency fund can cover about 10 months of fixed expenses, so I have enough in there to cover the 2k. So anything over my emergency fund, you would just invest?

@Mark S. I'm guessing both of those have minimums + stipulations? I currently have a bank that I get 5% on up to $5k, but there is stipulations for the 5% rate. 

Would I not always have a reserves account for my house and cars? I don't only need reserves for two years...yes, the money is needed in short term, but it would always be needed in the short term. Just because it's not millions of dollars doesn't make it any less important. Over the 30 years, my measly $2,000 at 1% would be $2,700. However, at 8% that $2,000 would be over $18,000.

But like I said, I will keep the $2k in my reserves account, and the $250/mo I'm putting in monthly, I will go ahead and invest. When I need to use the $2k, I will replenish the account with my $250/mo. Anything over $2k, if my investment is down, I can easily cover with the $2k + a portion of my emergency fund.

 Well, over a 30 year period, the money truly would be significant...and I have $250/mo going into the account. But I'll keep the $2k in a reserves account getting 1% and invest the $250/mo.

You could always get a quote to replace the roof then ask for a credit for that amount off the purchase price. Assuming this is an investment property, as long as the numbers make sense with that cost included, I don't think it's a deal breaker at all.

@Robert Leonard In original post, I meant to specify this is for major repairs/maintenance on cars/house, since I already have a primary residence and own vehicles. This is just a reserve account for when major costs come up. Leaning towards keeping $2k in that account, then using the $250/mo I deposit to invest for better returns.

@Robert Leonard So am I just overthinking this/thinking about it wrong? 

My emergency fund will always sit in a savings account, then I have my checking account that combine for roughly six months of expenses (about 10 months of fixed expenses). The money I'm questioning what to do with, would be on top of that - and I was thinking I can always use my emergency money for immediate expenses. However, I also don't want to run into a situation where say I have to pay the deductible on my home insurance + major car repairs (granted, my emergency fund would cover both or even a used car purchase - I'm frugal). A 1% return on the money isn't ideal, but granted my risks in a savings account are virtually zero, it's not too bad either.