So, you request a (say) CHF withdrawal from your account. The money are sent out. You are left with a negative CHF balance. You pay a margin interest rate on it. Right?
Which rates you are actually paying? https://www.interactivebrokers.co.uk/en/index.php?f=46782&p=m says CHF margin rate is “1.5% (BM + 1.5%)”. Can someone confirm it? Somehow I remember seeing a comment that for retail customers margin rates are 1% higher, but I cannot find it anymore.
Very sorry, this was about CFD rates: NOTE: Starting August 1, 2018 an additional spread of 1% will be added to the rates below for clients classified as retail clients under MIFID.
Nonononono, it’s all downside from here as Cortana misses opportunities to buy the dip by refilling his emergency fund. His computer has caused a spike in inflation all by itself!
Just read this thread now as I am also trying to optimise my EF currently…some great tips here! Thanks everyone!
In my case, married homeowner with 2 kids, I’m also optimising our EF but in parallel to me trying out YNAB. My main target for YNAB has been getting my wife more involved in our budget/finances (since she is not a fan of my spreadsheets ). But some great surprises too and 5% jump in savings rate as a bonus.
So in this context I agree 100% with @LeStache on his previous comment:
This has been a key take away for us and has allowed me to reduce our EF quickly since I look at my bank account much differently now. Anyone like me having issues sleeping without a bigger cash reserve will appreciate the added visibility this app gives you on your budget and cash flow. Helps relax having a instantaneous view of your “estate”.
Results: EF already down from 4 months to 3 months and I expect to get down to 2 months as a final value.
Just an idea for an alternative for emergency fund (not affiliated, not tested myself):
You can pay most bills (not credit card bills or crypto) by using a credit card for a 3 % fee.
If you have Swisscard credit card or a Cembra credit card, you pay less and can earn cashback.
Cembra Money Bank AG
For payments with all Cembra cards, you pay just 2.85% instead of 3% of the invoice amount.
Swisscard AECS GmbH
For payments with an American Express card, you pay just 2.25% instead of 3% of the invoice amount.
For payments with a Mastercard or Visa card, you pay just 2.75% instead of 3% of the invoice amount.
As I understand it, it would mean that you would only de facto pay an approx. 1.25 % fee if paying bills using the Cashback Amex.
In my opinion, emergency funds are especially useful for people starting their journey. They’re there to support you at a point in your financial adventures where you are vulnerable. When you are packing more liquid net worth, their usefulness tends to decrease.
So, I’d say that, of course, if you look at it by the lense of a person who already had a chance at accumulation, and through the lense of recent flash crises in between important gains, an emergency fund looks very lackluster. The question is: are you in the situation where the downside risk would take you down too hard for the potential missed gains to compensate for it? If yes, an emergency fund offers more protection than a few thousands more invested in stocks could.
This. I kept an ef at the beginning, meaning that I was overweight cash. Basically I had a goal of 80stocks/20cash but with the added condition cash = min(10000).
Now I have 80/20 and my 20% is much more than 10000 so there is no ef anymore, simply cash portion of portfolio.
First time since I started working a couple years ago that my liquid assets are at two months salary. As a immigrant kid from Ex-Yu myself it honestly feels quite scary It’s probably the way I was raised. I don’t think I’ll let it slip below 2 months salary ever! (This is about 3 - 4 months expenses, if I keep living the way I live now, maybe 5 - 6 months pinching pennies).
EDIT: But to answer the initial question, which I see is 2 years old!, I don’t think it’s necessary depending on the industry you work in. But it’s worth it for my peace of mind. I did decrease my requirement from 4 months salary to 2 months in the past years as I started learning about investing more.
Look at the balls on this guy/girl! I couldn’t do that Do you mind giving a small hint as to how high your salary/fixed expenses are monthly? Just ballpark compared to your emergency fund.
Do fixed monthly expenses matter? I mean, aren’t they the most easily budgetable - shouldn’t they therefore be rather irrelevant for “emergency” considerations?
My only fixed monthly expense is my rent. The cable internet and electricity bills are the only quarterly expenses. All together less than 900 CHF/month (electricity is quasi-fixed, since there’s little variance).
All other fixed costs are expended on a yearly basis.
They do because if, for example, our salary comes in late, being able to cashflow current expenses makes a difference vs being able to cover them with liquid assets vs not being able to pay them on time.
There again, people at the start of the journey are more vulnerable, having fewer available assets, potentially some debts to cover and a not yet good savings rate (because it takes some time to trim the monthly budget once one decides to go at it after having not been completely frugal before).
The impacts of having a bigger credit card bill the month after, potentially a margin loan to cover, some late fees on some bills and/or a lesser relationship with for example, a landlord, get less important with a more stable situation and more available net worth. Having dependents can also make a difference.
At least, that’s how I’ve lived it. I haven’t slept very well at night while trying to stabilize my situation getting out of student debt, some no more necessary insurance contracts (that had served their purpose) and upgrading a car I needed for professional purposes. Having to rely on my salary being there and on time had a kind of slave feeling to it that I am happy to be finally starting to get rid of, which is one of the psychological advantages of a 1 month of expenses emergency fund at the very start (I probably won’t need it anymore later on but then again, 3-4K more invested won’t make any real difference to my situation either at that point).
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
, that’s why I was talking about 1.5%.
). But some great surprises too and 5% jump in savings rate as a bonus.
I mean, aren’t they the most easily budgetable - shouldn’t they therefore be rather irrelevant for “emergency” considerations?