rainy day savings

"investing in the stockmarket isn't all that risky" - tell that to all the people that were due to retire between 2009-2016

Keep 10k liquid in a checking or savings account and anything above that should be invested, if you haven't saved 10k yet you probably don't need to worry about investments.

Are we not allowed to give people alternative ideas? I never specifically stated I was advising him on a rainy day fund. The hostility here.

It's not bad financial advice, just different financial advice.

Don't put your emergency fund in the stock market or mutual funds. The point of an emergency fund is to be a reliable pool of essentially liquid cash that you can access on short notice. Any interest or return you might earn on it is secondary to its purpose, and you should not go putting that money into a high-risk investment vehicle, or there is a very real chance that you may take a significant loss if you need to take money out when the market happens to be down. It also increases the time it will take to access your funds, which could be an issue if you have an unexpected expense that must be paid immediately.

Interest rates are poor at the moment, but there's really no easy workaround for that. No one is going to pay much more than ~1% or so on a standard savings account at the very most (and to get that, it'll have to be a monthly deposit savings account). Credit unions pay very little in the way of dividends as well, as they're subject to the same low interest rates as everyone else, and you can't even know ahead of time how much you'll get from them.

As for general financial advice, the typical recommendation for how to divvy up your savings is usually:

- Keep at least one month of expenses as a buffer in your current account and never let it dip below that threshold; this way if you have any issues such as an incorrect automatic debit or a late payslip deposit, you don't risk being overdrawn.

- Put funds into an emergency fund in a savings account accessible on demand until you have ~3-6 months of expenses in there. This fund is only for emergencies, e.g. an unexpected and necessary expense like a car or appliance repair, or to live on in case you lose your job. How much you need really depends on your personal financial circumstances; think about what amount would make you comfortable to have if you were to suddenly lose your source of income without notice tomorrow. If you draw from the account for one-off emergencies, then your monthly savings should go to topping it back up first.

- Contributing to your pension or PRSA up to the maximum age-based tax-relief threshold should be your next priority. This is generally the best return you'll get on your money, due to the tax relief.

The rest of your monthly savings should be divided up based on your financial goals:

- If you're saving for something in the short term, a few years or less (e.g. a deposit for a mortgage), you'd generally want to keep your money in something non-volatile, such as a savings account or a long-term deposit account. It won't earn much interest, but it will be there for you when you need it in a couple years.

- If you aren't saving for anything in particular or know you won't be needing the money for several years, that's when you want to start looking into other investment options such as mutual funds. Those are generally best for long-term investments; while the market can be quite volatile in the short term, it does tend to rise over the long term and historically has significantly outpaced any deposit account interest rates on average during most longer (10+ year) periods. Just make sure you read about the tax issues involved in such investments; for certain types of funds, you may be required to pay tax on the gains every eight years whether you've actually disposed of your investments or not, so you need to be prepared and have the cash on hand to pay the deemed disposal tax in those cases.

That's pretty low tier ad hominem. Actually it's lower, it's just name calling. I can't really take you seriously.