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Portfolios 104: Building an Emergency Fund

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1.
You will likely need an emergency fund most when you're not financially stable.
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True. People who are just starting out are usually most in need of such a fund.
2.
Where is the best place to keep an emergency cash fund?
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Keep your emergency cash fund in a savings account or money market account. These types of accounts are the most accessible in case of an emergency.
3.
Treating your emergency fund as a bill to be paid gives it an element of priority.
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True. Usually, we can find money to pay our bills.
4.
Why are stocks not considered a good parking place for emergency funds?
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The stock market is volatile. It is possible for the price of your stock to be down when you need the money to cover an emergency expense.
5.
A retirement account is not a good candidate to hold an emergency fund.
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True. Retirement accounts require years to build up. When you take money out now, you can lose a lot of growth in future years.