Emergency funds

[KevinFlynn]

Most investment advice tells us to hold 3 to 6 months worth of expenses/salary in liquid savings, like a savings account.

Personally, would you hold part of this in precious metals?

I will use some extra funds coming my way and will divert parts of my monthly invest into that non touchable emergency fund, and am thinking about dividing into

One month salary in cash

An ounce of gold per month

The rest into a savings account

 

 

Edited March 9 by KevinFlynn
grammar

[tpcob303]

I would hold up to a whole years worth gross salary income for myself personally. 

[dicker]

1 hour ago, KevinFlynn said:

Most investment advice tells us to hold 3 to 6 months worth of expenses/salary in liquid savings, like a savings account.

Personally, would you hold part of this in precious metals?

I will use some extra funds coming my way and will divert parts of my monthly invest into that non touchable emergency fund, and am thinking about dividing into

One month salary in cash

An ounce of gold per month

The rest into a savings account

 

 

Yes, but for me gold only, and in Sovs or Brits, which are optimally liquid.  

[KitboyE17]

4 hours ago, KevinFlynn said:

Most investment advice tells us to hold 3 to 6 months worth of expenses/salary in liquid savings, like a savings account.

Personally, would you hold part of this in precious metals?

I will use some extra funds coming my way and will divert parts of my monthly invest into that non touchable emergency fund, and am thinking about dividing into

One month salary in cash

An ounce of gold per month

The rest into a savings account

 

 

No. Cash. Emergency = need it now! So no time to sell/porn metals. 

[Roy]

I agree, emergency cash should be cash, with easy access.

However, the forum can allow your gold to be extremely liquid. You can offer an item for sale and, assuming you have rep, be paid into your account immediately. 

[KitboyE17]

1 hour ago, Roy said:

I agree, emergency cash should be cash, with easy access.

However, the forum can allow your gold to be extremely liquid. You can offer an item for sale and, assuming you have rep, be paid into your account immediately. 

Assuming you are selling the right metal at the right price - look at how many are ‘bumping’ week after week - and they may need funds in an emergency.

[sixgun]

Personally I buy what I can in physical but I also have a goodly amount in gold and silver inside the Kinesis Monetary System. So i am invested in metal but at the same time I can liquidate at will. 
I have seen TSF members post sales saying they have fallen on hard times, they have overspent and the car has gone kaput. Then they have to sell quickly and I have seen sales at fire sale prices. This is sad but it is life and I have taken advantage at times. 
Kinesis has worked for me. When I took residency in Spain a few years ago I needed to show quite a few grand in my bank account and pretty quickly - i think i remember the cash had to have been there for 3 months prior to assessment of the Residencia application, so i sold some KAU (gold) and transferred the cash in. I proved the funds and then moved it back. Yes there were some costs but nothing comes for free. 

[SovereignBull]

9 hours ago, KevinFlynn said:

Most investment advice tells us to hold 3 to 6 months worth of expenses/salary in liquid savings, like a savings account.

Personally, would you hold part of this in precious metals?

I will use some extra funds coming my way and will divert parts of my monthly invest into that non touchable emergency fund, and am thinking about dividing into

One month salary in cash

An ounce of gold per month

The rest into a savings account

 

 

I’m an awful saver. As in zero savings ever! I like things I buy them! 

However…..

I started buying Gold & Silver at the start of December last year. I now have around £7000 saved in Precious Metals at current spot price.

For those of us that struggle to save I can’t think of anything better than Gold to buy.

You get something physical to hold onto, it’s beautiful to look at and very easy to sell if you desperately need the funds!

The very best thing about it though is once you have it, you want more and you don’t want to sell it!

Perfect scenario for me

[KevinFlynn]

Thanks for the input. I take from your answers that I need to think of different type of emergencies.

So far I was thinking about an illness, job loss type of situation where I wouldn't earn enough or no funds to cover my expenses. I'll now add the emergency that needs a whole lot of money NOW (and what kind of scenarios that could be).

On liquidity, I'm pretty sure I'd always be able to turn gold into cash within one work day. Having cash in hand and electronic cash available, I would hope to be able to take that time. Given that I wouldn't keep that sum in cash at home, same as not keeping a larger amount of gold at home, I would need the chance to reach my safety deposit box anyway.

Of course, the most liquid would be transferable funds in a savings account - it would just feel so 'uncharacterstic' to have that large a sum sitting around as currency 😏

[modofantasma]

19 hours ago, KevinFlynn said:

Personally, would you hold part of this in precious metals?

No.

Emergency funds - In the bank (ideally earning some interest at least) 

Long term savings - I'm happy to hold some of that in gold.

[Orpster]

20 hours ago, KevinFlynn said:

One month salary in cash

An ounce of gold per month

The rest into a savings account

I think you can consider the money in a savings account as 'cash'

I think most of the people commenting are not talking about physical cash just accessible fiat currency which would include a savings account as per your last line.  I think what you have put here would work absolutely fine.  I worry less about having cash I can access immediately and prefer to tie mine up to improve the rate I can get on it, usually in fixed term ISA's or even my pension scheme.  I have a £12k credit card limit and would happily abuse that while giving the 90 day notice required on my current ISA.  I keep a few hundred in physical cash in the safe but that gets spent at coin fairs and I slowly build it back up again.  Its not really an emergency fund though just a way to buy a few sneaky coins without the Mrs seeing the withdrawal on the account - shhhhhhhh

[JunkBond]

I think you need to keep all your options open, there maybe an emergency where cash is not a suitable payment method while if there is a major outage cash will be all you can use.

A lot depends on your situation, I am retired with no rent or mortgage to pay so I personally keep a couple of thousand under the mattress and a chunk in Premium Bonds.

I was recently diagnosed with Parkinsons and while I don't class this as an emergency it prompted me to sell a large portion of my gold while I am still able to be in control of the process. It has taught me that we don't always end up in the situation we imagine.

Don't worry @Roy I still have my collection of half sovs!

[Petra]

Cash kept in a safe at home. Even if you’re not in to sovereigns, have some full and half as they are easiest to sell quickly. 🤔

[tpcob303]

58 minutes ago, Petra said:

Cash kept in a safe at home. Even if you’re not in to sovereigns, have some full and half as they are easiest to sell quickly. 🤔

Not a great place to hide cash, unsavoury people will look for a safe and just carry it away, attached to the wall or not. I have a safe in the house but it's purely decoy I gave coins in it for sure as it's got to sound like it has items of value but it's just coppers the rest are boxes from proof coins. But the coins I hold are in safety deposit boxes that are open to the public that aren't with a bank but a private company. Robbers can take the safe but they get nothing, banks can take the content of the safety deposit boxes they run and hold. It's much harder for private companies to do this and while there is an annual cost, it's reasonable. Sure you can bury it in your garden but you will need to waterproof it as I guarantee you the elements will get to it. 

 

[tpcob303]

I am working on 30k in precious metals for 1 year gross annual salaries worth in PM. 

6 months salary minimum cash for emergencies as you don't know how long an emergency can be, my Mrs was out of work for a full year due to covid being between contracts fortunately we had a sort of bailout by the German government but unlike the UK it had to be paid back where the UK paid FT workers 80% of the salary we had nothing for several months and it decimated savings. 

 

 

[AppleZippoandMetronome]

No I would never buy gold or silver for use as an emergency fund. I have two stores for emergency and these are split between cash and an easy access account.

For an emergency scenario I want the peace of mind of knowing what I need is there and not something I'd have to go through the stages of selling to get access to. Chances are also good if you are having to liquidate gold or silver in an emergency the urgency of that scenario means you are almost certainly going to take a hit on the value of those items.

I am very glad to have the gold and silver I do - there is a good amount of comfort in it. But its there for the long term. Cash is still king for emergencies not to mention day to day living.

[SidS]

15 hours ago, SovereignBull said:

I’m an awful saver. As in zero savings ever! I like things I buy them! 

However…..

I started buying Gold & Silver at the start of December last year. I now have around £7000 saved in Precious Metals at current spot price.

For those of us that struggle to save I can’t think of anything better than Gold to buy.

You get something physical to hold onto, it’s beautiful to look at and very easy to sell if you desperately need the funds!

The very best thing about it though is once you have it, you want more and you don’t want to sell it!

Perfect scenario for me

This is me.

[tpcob303]

1 hour ago, AppleZippoandMetronome said:

No I would never buy gold or silver for use as an emergency fund. I have two stores for emergency and these are split between cash and an easy access account.

For an emergency scenario I want the peace of mind of knowing what I need is there and not something I'd have to go through the stages of selling to get access to. Chances are also good if you are having to liquidate gold or silver in an emergency the urgency of that scenario means you are almost certainly going to take a hit on the value of those items.

I am very glad to have the gold and silver I do - there is a good amount of comfort in it. But its there for the long term. Cash is still king for emergencies not to mention day to day living.

The point of such emergency funds are that in case of a bank run you will have access to tangible assets you can barter or sell off for cash. Having an easy access account is the problem, will you have access if the emergency is a run on the banks where you have now the problem of accessing your easy access account which is no longer easily accessible. You have your cash in the bank and the bank is literally taking the funds to fund themselves to pay off their debts. 

Having gold or silver is but a percentage of an emergency fund you have direct access to, cash makes up another percentage and how its stored should be easily accessible but not in the form of an account. Any account is open to the owners of said account, we are merely temporary depositors with which we don't own anything in the bank which we store our own money as soon as we deposit the money it becomes their money and they give it to us when they decide they want to give it to us. 

 

[joebloggs]

Best of both..

20% CASH | 80% PRECIOUS METALS

 

[PhilOdgny]

An unused but available overdraft facility may be useful as a buffer while you liquidate other assets.

[AppleZippoandMetronome]

On 10/03/2024 at 14:16, tpcob303 said:

The point of such emergency funds are that in case of a bank run you will have access to tangible assets you can barter or sell off for cash. Having an easy access account is the problem, will you have access if the emergency is a run on the banks where you have now the problem of accessing your easy access account which is no longer easily accessible. You have your cash in the bank and the bank is literally taking the funds to fund themselves to pay off their debts. 

Having gold or silver is but a percentage of an emergency fund you have direct access to, cash makes up another percentage and how its stored should be easily accessible but not in the form of an account. Any account is open to the owners of said account, we are merely temporary depositors with which we don't own anything in the bank which we store our own money as soon as we deposit the money it becomes their money and they give it to us when they decide they want to give it to us. 

 

Yeah I've long been a proponent of the ownership of physical assets because I simply don't trust the systems that are in place. You're very much preaching to the choir with this here but its always good as a reminder for others to read. Like I said in my post I do get a good amount of comfort from holding the gold and silver that I do not to mention land and other property.

That being said the kind of emergencies most of us are likely to have to deal with in our lifetimes are going to be much more everyday. Car breaking down, vet bill, house repair, etc. Stuff like this comes up every now and then and when it does it is necessary to have a good cash buffer to deal with it. If a sudden bill that needs to be paid ASAP pops up and all you have is gold and silver you will take a hit on that because you need to sell it quick to settle the bill. Cash is still needed in this world regardless of what any of us think about its stability.

[KevinFlynn]

Going through the discussion I realized myself chewing on three aspects:

To differentiate my emergency funds from my savings or investing efforts. Being clear on that emergency funds means currency in a savings account only.

Assessing what kind of emergencies could happen to me. I'm living an urban lifestyle, no house, no car, no family. The most valuable items that could break down are my notebook, smartphone, washing machine, dryer. Then to bridge an aforementioned job loss in this era of insecurity, or prolonged illness on a lower income.

And last, me not being used to holding a larger sum of money as currency in a savings account, the majority of my portfolio being in gold and stocks. So needing to fight an uncomfortable feeling.

Leading me to calculate a gap in funds from unemployment benefits or sick payments for six months, or three months of no income at all. Go with the higher sum, keep it in a savings account, don't touch it. Keep my normal savings rate towards my portfolio.

[Fishface220]

I try and sit on £500-£1000 in cash for instant access and have £9k in premium bonds which I can cash out within a week if needed. Gold and Silver is long term and last resort. A couple of other bank accounts for when Lloyds are playing silly little monkeys with what I can spend my money on as well. 

That seems to work for me