My wife (29) and I (32) are both steadily employed and just spend the last 2 years aggressively paying off debt (about 90k) and saving up an emergency fund. Today our monthly expenses are about $4,500 (rent, car payments, bills). For simple math, let's say this emergency fund is about $40,000. I also like to keep about $10,000 in my checking for day to day padding. My current credit union offers 2.5% interest on the first 25k of our savings...which isn't bad...but I was thinking I could take that money and place it in a low-volatility index fund (VOO or similar) and collect a 15% return. I know the point of an emergency fund is to have the cash readily available but I figured between our checking and I could afford to float a few expenses on my credit card (I never carry a balance and have $50,000 of available credit) while I withdraw from the brokerage fund, if I had to. I know it could take up to two weeks to withdrawal the funds but that is where the credit card would come in.
What are your thoughts on this? I don't particularly like the idea of that kind of money sitting around and only earning 2.5% but I am curious as if anyone has seen the downside of my proposed strategy.
Any input is appreciated and thanks in advance.
Submitted September 07, 2017 at 09:49AM by neverstandstill http://ift.tt/2xRO6hE
