With the high-yield crypto accounts coming to crash with the stories about FTX and Celsius problems, many of us are looking for other high yield investments that keep our money liquid.
I’m just thinking out loud and sharing what I’m doing now.
I am motivated to get my money(full 3-6 months of expenses emergency fund) into some investment that pays well.
My goal, and the goal of many, is to have an emergency fund:
- Liquid – easily accessible.
- Earning money – to prevent inflation from eroding its buying power.
I understand this is technically a ‘savings’ account for rainy days, and recall the quote:
Savers Are Losers.
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But if I find a location that yields high enough interest rates or returns, it’s an investment like a bond, cd, or dividend stock.
Crypto Yield Farming Gone, But Other High Yield Investments?
Some places I considered, or am considering, for my full Emergency fund investments. These are some results searching for high-yield
- High-yield savings accounts.
- Certificates of deposit.
- I Bonds.
- Money market accounts.
- Government bonds.
- Municipal bonds.
- Corporate bonds.
As mentioned before, I have my $1000 starter emergency fund in a high-yield savings account with SoFi, which satisfies the need for that money to be immediately available should an emergency occur.
However, I used to keep almost my entire emergency fund(step 3 of the Baby Steps) in crypto-farming accounts, BlockFi being one.
Since the instability of crypto in mid-2022, I rolled my money out.
Where Did I Put My Full Emergency Fund?
Good question.
I separate my large investment accounts(pre-tax retirement, post-tax retirement, and non-retirement investments) into different brokerage services.
For my “I don’t know what to do” money, I use the T Rowe Price service. Currently, my emergency fund is sitting in a money-market mutual fund: TSCXX.(https://www.troweprice.com/personal-investing/tools/fund-research/TSCXX)
Currently earning over 4%, but being a money market fund, it will fluctuate with time based on lending rates and borrowing.
Is this money market fund the simple answer for where to house the money?
So considering the latest chat about I-Bonds, I am reconsidering the one size fits all solution I am currently using and building a tiered investment system for my money.
I want my money to be liquid and easily accessible, but not all the money has to be accessible overnight. Having saved 3 to 6 months of expenses means I plan to have the funds accessible over the whole 3-6 months.
Tiering Emergency Fund Investments
Having money that should be available over time, I can tier my money into investments making the most money while giving up some liquidity.
I can focus on higher-yield investments that take several weeks to withdraw or buy notes or bonds that mature every few months.
I keep the money I need in a money market fund or high-yield savings account in less than four weeks.
Looking for suggestions, and will be posting my solution, understanding what works for me might not work for you. Good luck, and stay tuned.
High Yield Crypto Investment 20/20 Vision
Funny, I mention liquid; in hindsight, I never realized how ill-liquid the money had invested into these high-yield crypto accounts. I still have a few hundred left in BlockFi and need help withdrawing it.
Just very blessed that I was able to see the instability back in mid-2022 and withdrew almost all my money: My BlockFi Interest Account Review.
I feel for those waiting for their money to be released, with the bankruptcy proceedings taking so long. Good luck, and even though I pulled out almost all my money, it wasn’t all my money.
I have money locked up in BlockFI still.
Your Feedback.
I covered some issues that most of us have on or past Baby Step #3, but I need a solid solution.
My money market fund is making greater than 4%, but that is less than the reported inflation rate, and this is a cause of concern for me.
What are you doing?
Where are you storing your entire emergency fund?
Thank you
 Myself with an interesting Bull Sculpture. Notice: No Lambo’s. :/ | Hi I’m Tom, A Blogger And A PIG Farmer. PIG Farmer as in I grow Passive Income Generators(PIG’s). I’ve been playing with stocks, mutual funds, and options for decades, as well as always working on my side hustle stacks. Unlike what you read online, I’ve yet to find a way to get rich quickly. Get Rich Quick isn’t happening for me. My journey has been long and continues. I hope to have so many PIGs I can stop working at my current job and volunteer as a medical worker overseas. Still waiting, but getting there. I still am a family man, and while on this Journey of Growing PIGs. I wanted to share my adventures(ups and downs), hoping you will contribute with your feedback and comments. Fun Fact: In my spare time, I am a Band-Dad! |