I had $30,000 in my high-yield savings account until a financial expert convinced me that was a bad idea

Business Insider | 1/1/2020 | Elizabeth Aldrich
crazycool12crazycool12 (Posted by) Level 4
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I have a year's worth of expenses in my emergency fund, and I started feeling like I was missing out on returns by letting so much money sit in a savings account.

It's usually recommended that an emergency fund hold three to six months' worth of living expenses, but I had considerably more saved.

Return - Savings - Account - Money - Expert

While I earn a relatively high return with my high-yield savings account, a money expert, Miranda Marquit, convinced me that investing a portion of that fund might be wise. I decided to invest one-third of my emergency fund to start.

If I had to pick one financial move that impacted my life the most, it would probably be building an emergency fund.

Cushion - Cash - Reserves - Hand - Expenses

Having a cushion of cash reserves on hand to cover unexpected expenses has brought me peace of mind — not just when I've had to shell out money for a new transmission in my car or to weather a low-income month, but even when I don't actively need that money. Knowing it's there if I do keeps a lot of my anxieties at bay.

However, I still have this nagging feeling that I'm wasting that money by letting it sit in a savings account. While I earn hundreds of dollars in interest each year by using a high-yield savings account, my earnings don't usually outpace inflation. This means that in terms of buying power, I'm actually losing money.

Money - Expert - Writer - Money - Work

Then, a prominent money expert and financial writer keyed me in on a secret about making that money work for me: I could invest my emergency fund — or at least part of it. Miranda Marquit has written about this strategy numerous times, and her advice caught my attention. It was equal parts scary and intriguing, so I decided to ask her what she thought I should do.

Should I invest my emergency...
(Excerpt) Read more at: Business Insider
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