Quote:
Originally Posted by albertGQ
Well, I kind of want my TFSA as an emergency fund so wouldn't that classify as short-term? What do they say? One should have a minimum 3-6 months salary tucked away just in case? (Is that net or gross?) $5000 doesn't even come close. So I'm thinking keep putting my savings in here for a couple years and after I have my six month cushion, then put it in higher risk.
You think that is a good idea or do you think I should add more risk to it now? I've got RRSPs in pretty risking mutual funds right now, and I want to also max out my lifetime contribution room. I think that is where I'll put my risky investments until my emergency fund is built up?
What do you think?
Money Guy and Claeren, you guys can weigh in as well.  |
This may be a bit controversial,
but I disagree with the standard advice of everyone having three to six months in an emergency fund. I, for example, have no emergency fund. Many of my clients don't, often on my advice. Years ago I ran into a lady I used to work with. She asked me if she should have an emergency fund. She and her hubby had $25K in a fund for 25 years, untouched. I calculated for her that they had lost tens of thousands of dollars in lost gains while the emergency fund spun its wheels. She and her hubby both had very secure jobs. Whether you have an EF and how much it should be are a factor of several factors, such as job security, personal financial situation, if you have a working spouse (also her job situation) and such.
My emergency fund is my line of credit. I don't have a "job" so no one can fire me. You may not need one either. Depending on your tax sitution, including income, you may be better off flipping your emergency fund into an RRSP.