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You can find out more information by listening to episode 11 of this podcast.

Emergency Fund Show Outline The full show notes for this episode are available at https://www.diyinvesting.org/Episode24

Emergency Fund Sizing: * Recommended Size: 1 year * Mainstream Alternatives: + 3 months + 6 months + $1,000 + $10,000

Why? * Liquidity is all-important for investors * Value investing requires managing risk and accepting volatility * Lack of liquidity can cause you to sell investments when your stocks are undervalued and priced too low * A strong emergency fund protects you from this possibility

Where should you store it? (Hint: Maximize Safety) You should maximize the safety of your emergency fund. Don't worry about maximizing the rate of return you receive.

Store your emergency fund in a government guaranteed account. This can be with either an FDIC-insured savings account. I believe Ally Bank is a good option.

A great alternative is TreasuryDirect.gov where you can lend money directly to the US government. Emergency Fund money would obviously need to be invested only in short-term government bonds. (3 months or less to maturity)