For the past four months, I’ve basically been treading water financially.
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To be fair, my extra income opportunities have dried up and I’ve had a number of large expenses to pay for (a trip, car repairs, etc.). But my motivation has also just been a little…lackluster. I’m adjusting to working in a new role at work, I went through a massive, heart-stopping breakup and I’m experiencing some minor (but annoying) health problems. In other words, I’ve had a lot of stuff on my mind that isn’t related to finances and I’ve had a hard time getting excited about setting and achieving financial goals.
A few weeks ago I wrote about how, deep down, I believe in the Dave Ramsey approach to financial management. Which is true. I do. But I’m not excited about it. In fact, I’m downright bored by it.
A couple of weeks after I wrote that article, I did some research and wrote about the Bogleheads. Then I wrote about pursuing financial financial goals which excite and inspire you. I think you see where this is going.
Here’s what I want to do: invest $3,000 of my savings in the Vanguard Total Stock Market Index Fund. This would leave me with $2,500 in liquid savings (I have a $500 stipend coming in on Friday).
As I see it, these are the pros of this move:
- More money in investments means more potential for growth, thus fending off inflation (let’s face it, emergency funds get their asses kicked by inflation)
- This would be taking the first step towards creating a well-diversified portfolio of investments, which is a good long-term financial move when it comes to wealth-building
- I’d be excited about my finances again, and thus motivated to keep moving forward
And these are the cons:
- Less liquid cash, which means more difficulty in paying for emergencies that come up
So, the pros outweigh the cons as I see them. But what about you? Is there a flaw in this plan that I’m not seeing?
In other words, how bad of an idea do you think this is?
