Investment/Savings Advice thread (non-morons only)

[Rams]

you should do whatever makes you and her feel most comfortable/happy. do you both really like the idea of having several thousand dollars in a bank down the street? does it feel good and make you feel good and safe, etc? because if so then do that. but maybe you both hate the idea of having several thousand dollars sitting in the bank getting .3% interest when you could be investing every penny in an attempt to grow it? if so then you should invest it.

because at the end of the day we aren't talking about enough of a difference either way to make you guys force yourselves to make the decision that you would be less comfortable with or that would bring you less joy, etc.

/thread

open thread back up, because that crap is stupid.  this "do whatever feels good, man" idea ignores the fact that these are highly divergent choices that make a significant impact on your finances.  unless 30 yr old kk hates 80 yr old kk, he should think long and hard about whether he wants to indulge his emotions or think rationally about his choices.

it's not stupid. it's not like we're telling him to use it for kindling. assuming he's in his 30's, he has plenty of time to save more for retirement and invest that money. it's the same with paying off your mortgage when rates are this low. if you sleep better at night, do it. if not, great, invest it instead. there's no right or wrong answer.

[EMAWmeister]

I don't need an emergency fund because if there were an emergency I would just call that company with montell jordan and stuff.

[sys]

it's not stupid. it's not like we're telling him to use it for kindling. assuming he's in his 30's, he has plenty of time to save more for retirement and invest that money. it's the same with paying off your mortgage when rates are this low. if you sleep better at night, do it. if not, great, invest it instead. there's no right or wrong answer.

that's exactly what you're telling him to do with it.  you're not telling him to the use the money for something else.  he's already set the parameters - he wants 2.5 months in reserve for the rest of his life for whatever reason.  the question is just whether to let the money make money while it waits for an emergency, or whether to have it hunker down at the local bank and depreciate out of paranoia of having to use it at some point when the market is down, or when you need it within 72 hours or god knows what the logic is.

if you assume even highly conservative returns, we're talking about a difference of hundreds of thousands of dollars for 80 year old kk.  it's not a coin flip, either decision is right question.  these are highly divergent results.

[jtksu]

I don't need an emergency fund because if there were an emergency I would just call that company with montell jordan and stuff.

I'd probably go with the Native American company. Mostly just for the Indian Giver jokes.

[Dr Rick Daris]

it's not stupid. it's not like we're telling him to use it for kindling. assuming he's in his 30's, he has plenty of time to save more for retirement and invest that money. it's the same with paying off your mortgage when rates are this low. if you sleep better at night, do it. if not, great, invest it instead. there's no right or wrong answer.

that's exactly what you're telling him to do with it.  you're not telling him to the use the money for something else.  he's already set the parameters - he wants 2.5 months in reserve for the rest of his life for whatever reason.  the question is just whether to let the money make money while it waits for an emergency, or whether to have it hunker down at the local bank and depreciate out of paranoia of having to use it at some point when the market is down, or when you need it within 72 hours or god knows what the logic is.

if you assume even highly conservative returns, we're talking about a difference of hundreds of thousands of dollars for 80 year old kk.  it's not a coin flip, either decision is right question.  these are highly divergent results.

Keep it in your checking account for liquidity for something of that size. Any better potential for gain is offset by the costs and potential for loss given you can't wait out fluctuations in the market if you need it.

That makes sense.

no it doesn't.  i mean, it does if you're talking about you want to buy something in 6 months and you don't know what to do with the money till then.  but if you're talking about keeping a permanent emergency fund in perpetuity, then that's absolutely Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!).  you're foregoing income off of that money for like 50 years.  on the off chance that you might have to sell at a loss at some point?  that's just playing to your Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!) loss avoidance bias.  yes it will cause you psychological pain if you ever have to sell at a loss.  and yes, you don't feel the same pain when you decide to not participate in market gains for the rest of your life.  but you're far more likely to lose far more money the first way.  be smarter than your emotions.

i went back and read the thread and it seems like you "got it" on the first page, so i quoted it and bolded part. i could be wrong but i don't think discussion is just about what would give a hypothetical 80 year old kk the most hypothetical money. i'm pretty sure he already knows that.

it's a cost/benefit thing or whatever and he absolutely should let his emotions on the subject play into what he does and have it affect his decisions. humans as it is are laughably horrible at trying to guess what will make their future selves happy in the first place and jmo, but life is too short too worry about what you may or may not think or need when you are 80 (if you live that long) to make choices that will make you less happy when you are 30. also, telling him to "be smarter than his emotions" is stupid talk.

[treysolid]

I don't need an emergency fund because if there were an emergency I would just call that company with montell jordan and stuff.

[Stupid Fitz]

Sys is killing it in this thread.

I'll split it down the middle. Take half and buy the S and P 500 index fund and get the most interest you can with the other half.

[puniraptor]

Invest all your real money in high return crap and if you need emergency funds in a hurry just accept one of the 15 credit card special offers that come every week.

[Johnny Wichita]

Gamble.  A lot.