Hi everyone, I’d like to ask for some advice. I’m currently keeping my savings (including my emergency fund) in a TFSA with Wealthsimple and buying XEQT for the long term. Would it be okay to keep my emergency fund in the TFSA and invest it in XEQT, or should I keep the emergency fund in cash or a high-interest savings account instead? A bit about my situation: I’m 28 years old and plan to retire around 70–80. I keep one month of expenses in my checking account for liquidity and safety. I still haven’t maxed out my TFSA and likely won’t this year. I have an extra $1,000 from my salary each month to save or invest. What do you think would be the smarter approach?
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10 Comments
Des
@kadest · 1yr
Take my opinion with a grain of salt and for a general savings what you said is fine but the point of an emergency fund is to be the most liquid in case of the worst situation. Example it’s Friday Night and something happens that you need 2500 dollars in Cash ASAP. The volatility and lower than Cash liquidity makes it a bad choice. The emergency fund is not supposed to be a growth driver but a safety net, in fact just using a secondary WS Cash account in my opinion would be a better place to store an Emergency fund than inside a TFSA.
Schrödingers Duck
@moonduck · 1yrEdited
Well, this is what I did. I prefer to stay invested vs keeping cash. XEQT has less volatility than most of my other positions, so were the market to fall and if I was forced to sell a bit, I’d sell XEQT to keep $TEC for example. Cheers
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