The stock market’s drop has me back well below $100K — though that’s also partly because I moved the money I’m saving for freelance taxes into its own account at a separate bank that Mint and Personal Capital don’t track. For most of the last six months I’ve had it in one of my regular savings accounts and showing up as part of my net worth, but I realized sometime this fall that it didn’t make sense; instead I should hold it separately as if I was having taxes withheld. In 2019 I’ll start paying quarterly taxes again (I’m glad I’m at least somewhat familiar with this process from back in the day when I freelanced in my early 20s) so it’ll be good to have a holding bank account that I just use for that money.
ANYWAY. That’s not really the main point here. The main point is that because freelancing has gone so well, even though I haven’t added to my savings since I quit my job I still have $40K in cash between what I technically call my “emergency fund” and what I call my “life fund,” enough for two solid years of not really thinking too hard about money or three years of bare-bones expenses (or probably like ten years if I move into a volunteer community and don’t pay rent or for food!) And even though freelancing is going well, I have zero intention of letting that fund drop.
The reason is that my work life is just too fragile. I don’t have a business like plumbing (everyone always needs their pipes fixed.) I do high-quality editing work, but at the end of the day, in order for me to make money people have to decide that they care about their writing enough to pay to improve it. When there’s another recession or if universities start closing their humanities departments right and left (or both) my current preferred income stream could be in trouble, and just at the time when other work could be harder to come by.
So, absolutely ludicrously gigantic emergency fund it is. Every morning I open my bank page and look at it and take some deep breaths. It feels good to have backup.