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birb_cromble  1mo ago (text post)   1009 thread views

Weekly Finance Thread - 2026-08-01

A weekly thread to discuss financial matters - from personal all the way up to global.

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I personally have no risk bucket for our household’s finances between “emergency fund” and “retirement fund.” Maybe it would be optimal to create one, but having a sufficiently big emergency fund obviates most need for some other expense planning vehicle.

I don't even have an emergency fund. Other than my credit card's "12 month no interest financing on my credit card, with a 4% fee up front"

Once you have enough wealth and some discipline you don’t need an emergency fund. You can use a taxable brokerage and margin for same day payments. Fidelity even has a debit card that automates it. Or slower you can transfer to you bank account and it clears within 24 hours for payment.
If you have 300k in taxable brokerage you should have no problem getting 30k for an emergency and that’s without needing to do a taxable event immediately.

Reading this finally jolted loose a thing in the back of my brain. Almost a year ago now, I stashed this link with a note that I should look into the scheme at some point. Scroll down to the section titled "Box spreads".

...now having spent a few minutes looking at it again, a couple comments. a) If you don't do it right, you can really screw yourself over. There's a legend of wallstreetbets who did this, of course. b) There's now a FinTech company that specializes in doing this for you. An LLM tells me that they get paid by adding an extra ~0.5% to your rate, which is probably worth it if you don't feel like you really know what you're doing. c) I have no idea how long it would take to execute. From what I can guess from what I've read so far, they use a browser extension (a little sketch) to actually put the trade together in your existing brokerage account, so presumably, the actual execution of it all is extremely quick. But it looks like you probably need to do some setup in advance.

My emergency fund is effectively broken up into two categories: "unexpected same day check needed" (admittedly crazy unlikely), and "stock market's crashed and I lost my job and need to keep paying the mortgage."

When I first started investing, I learned that you can withdraw contributions from Roth IRAs at any point in time, tax/penalty-free. Also, if you do withdraw, contributions are withdrawn first. I reasoned that the types of emergencies that I would want to be prepared for with an emergency fund were less of the type "the market will crash", and more of the type, "I'll have a lumpy expense, like having to replace a car." Of course, it is possible for both such things to happen at the same time, but probabilities. My conclusion was that I was going to retain a very moderate amount of cash flow buffer (could be viewed as extremely small compared to the emergency fund numbers I see others throwing around), and that I could manage to have my 'emergency fund' essentially be in my Roth IRA. Sure, it wouldn't be great if I actually had to withdraw some, but the downside is just that I would "lose" some prior years' room of possible contributions, which I would necessarily lose if I wasn't putting money into the Roth IRA in the first place!

Times changed, my life circumstances changed, but I've mostly still happened to find myself not really needing an emergency fund. Of course, other people have different circumstances where it would make more sense.

We recently got a new roof, and it was led by a neighbor who got a bunch of neighbors to agree to go with the same roofer, to entice the roofer to give us all a discount.

From beginning to end, the turnaround for the whole affair was about a week, from idea to having a brand new roof. We also got a double-digit percent discount on top for not financing; we wired the full amount on the day of performance.

If your emergency Roth IRA plan can move money for you that fast, then it seems fine.

I thought about it, even considered mentioning the roof example exactly in my prior comment. What I would have said was something like, "I didn't own a house, so it wasn't like I had to worry about suddenly replacing a roof." Life circumstances.

Life circumstances now provide, uh, other reasons why I'm not super concerned about having much of an emergency fund.

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