As previously reported, we here at The Single Dollar are totally committed to anonymous transparency, but seeing as how we’re anonymous (at least, kind of), that relies on we — well, me — actually reporting the numbers correctly.
And lately I…haven’t quite been.
No worries, I don’t have secret credit card debt or a gambling problem or anything. Well, maybe I have a gambling problem. The thing is, I…remember when the Dow crashed into the 15000s a couple of months ago? I kinda maybe sorta took $4000 out of my newly-saved $5000 emergency fund and opened a taxable brokerage account and bought an index fund. And now I don’t know what to do.
I mean, so far so good: it’s trucking along and is now valued at over $4200. But that money isn’t supposed to be in an index fund. It’s supposed to be hanging around making $3/month in interest and waiting until I have an emergency.
A stock market correction is not an emergency.
The thing is, having done it, I’m not really sure what to do now. I could:
(1) leave it in this new Vanguard account unless there’s a true emergency, figuring that the market is unlikely to crash back below where it was when I made this move and, if an emergency doesn’t arise for a while, it’s likely to grow much better there than in the bank. Report everything accurately on my monthly net worth statement ($1000 cash plus whatever is in the brokerage account) as part of my e-fund, meaning that number will fluctuate. Risk, of course, is that an emergency shows up when the market is low, which is why you’re not supposed to do this in the first place.
(2) Transfer it to my Roth IRA. I’m not totally sure why I didn’t just do that in the first place instead of opening a whole new account. I have plenty of contribution room for 2015 and then I could withdraw the contributions if I did have an emergency, and if I didn’t, they could keep growing.
(3) Close the account, move everything back to my earning-$3-a-month savings account, and be grateful I didn’t manage to lose money on this little adventure.
Ugh, this is why the ability to trade stock on the internet is dangerous. What do y’all think?