One practical reason I have discovered for an emergency fund is related to choices. I recently had to make a large payment. My savings wasn't very large. And, I did not have places from which I could borrow the cash in the allotted time. So, I had to cash out some Bitcoin. No doubt this is costing me interest and capital gains. I am now a believer in the emergency fund. This way I can handle sudden cash needs without relying on credit or having to cash out investments.
It now makes sense to have savings again. Savings used to be en vogue when banks paid higher interest rates on deposits. As interest rates dropped, the math nerds convinced the world that it doesn't make sense to have cash sitting around in bank accounts. Well, with stablecoins, it is possible to have 10% or 12% interest on your savings. But, even if stablecoins did not earn interest, it would make sense to have a stash that can be deployed without harming your best investments.
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Agghhh no, you were forced to dip into BTC holdings. In the longrun, I don't think it will harm you too much, if anything the learning that comes from it is perhaps priceless for the longterm.
I myself failed to learn the lessons of not having an EF many times over but was too dumb to learn fast, but learn I did, eventually. It is absolutely true that having money sitting out of the 'yield game' can cost in terms of financial growth but compared to the many times I took on high interest credit to save us from the sky falling in, it is probably now paying for itself when large out of the blue expenses and repairs come along.
I did actually consider adding a stablecoin method to my post but I have a tendency to run on for an extra few thousand words when I explore every aspect of an idea that pops in to my head.😂
I love the way you worded that strategy though, safeguard not only your home-financial life but ALSO your best assets and investments. I think many of us have to learn financial intelligence through mistakes, they may be painful in the short-term but teach us valuable lessons in the long term.
If we learn from today and have a better tomorrow while planning for the day after, I think we are on the right track.
Thanks for stopping by and sharing your experience, it is massively appreciated, take good care of you and yours, me and mine wish you all the very best. 👍😎
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Thanks. What was more painful about selling BTC was that I had to sell it during a dip. Therefore, I had to sell more of it to come up with the amount of cash I needed. That was a high tuition for that lesson.
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