My Emergency Fund Made $20.71 in Dividends

Many financial experts including the likes of Dave Ramsey and Suzy Orman recommend putting your Emergency Fund in a FDIC insured checking or savings account.  I tried doing that and it didn’t work for me, so I tried a different approach.  I invested in an individual stock, some of you may have heard of them, the company is called Nike.  I was able to diligently put aside a small amount of money and have this drafted from my bank account each month to buy Nike stock through Computershare.   Each month I was buying fractions of shares and reinvesting the dividends back in the form of buying more Nike stock. 

While I am heavily invested in real estate as my primary income stream for financial independence, I believe in having multiple income streams in a successful business or financial portfolio.  I mean think about it, it’s not like Nike only makes money off of shoes or Google off of advertising, they are well diversified in their income streams, I think we should all take note.  My financial independence philosophy of putting your eggs heavily into one basket with real estate and then diverting to a multiple income stream approach is slowly coming to fruition.  I would like to see Dividends become a bigger income stream over time and what a better place to watch my emergency fund increase in value then with dividends.  As the featured image indicates:

I am proud to announce that during 2014 in my individual investment account, Nike paid me $20.71 for 2014!

 

Now certainly their are many dividend investors out there who have made 1000x more in 2014, but we all have to start somewhere.  Based on history this number will keep growing and growing over time, I actually stopped building my emergency fund earlier this year so I could put my focus in it’s entirety on paying off my student loans, which has an anticipated pay off debt of 2014(If I move mountains, defeat Godzilla, etc).  Assuming Nike keeps paying dividends(30 year track record says yes), and increases them over the course of the year, that $20 could get closer to $25, now I know that doesn’t sound like a lot but look into your emergency fund, what income did you receive?

Since my student loans will be paid off shortly, this account may increase over time, buying more shares of Nike, this would increase the number of shares and increase my overall dividend amount received.  I also may need to sell out of  Nike completely to make sure my debt is eliminated destroyed.  Either way I am happy to report my $20.71 dividend income for the year and in celebration I would like to share with you just a few things you can buy for $20!

That was a trick celebration people we don’t waste our money on things under $20, instead pay off debt, invest, start/build a business.  Even Steven Money readers unite………OK took that one a bit far, I watched a lot of Captain Planet as a kid, but with our powers combined……………Until next time thanks for reading.

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27 Responses to “My Emergency Fund Made $20.71 in Dividends

  • Hmmm… you post got me thinking about if my emergency fund WAS doing anything for me this year. So, I checked it out – and it did! whoo hoo! I was particularly worried because my true emergency fund is cash – but it has a .75% APR this year, so it did make me about $50! Better than a kick in the face! I know it could’ve made more if invested, but I just like having some cash around.
    Mrs SSC recently posted…Lifestyle creep: Is it killing your early retirement?My Profile

    • EvenStevenMoney
      3 years ago

      That’s great that your emergency fund made some $. I have a completely different philosophy on emergency fund’s than 99% percent of the people out there. I won’t talk about the appreciation in the stock in 2014….or will I?

      • Yeah – about a year ago I kept even more cash just sitting around, not working for me, but, then I decided I could invest about half of it. I’m too conservative to invest much more. Having two little rugrats makes me want to keep a little more cash available…
        Mrs SSC recently posted…What ever happened to quality?My Profile

        • EvenStevenMoney
          3 years ago

          Knowing what you feel comfortable is huge. I have a gambler’s mentality with some of this stuff, but try to outlet this in controlled areas like buying eBay items or investing in a blue chip stock for dividends, etc.

  • Nicely done. Considering doing something with my e-fund to make it work a little harder for me.

  • Just like Mrs. SSC, I was prompted to go check our emergency fund, which we keep in an online savings account. We do not follow the advice of the financial gurus to keep 3-6 months of expenses in there. We keep just enough to help me feel comfortable – Mr. Maroon would probably let it go even lower. We try to maximize the investments to keep the money working even harder for us! But still, we earned $40 in interest last year from that savings account. Not bad!
    Mrs. Maroon recently posted…A Glimpse Into RetirementMy Profile

    • EvenStevenMoney
      3 years ago

      I think the key words that you said were we feel comfortable and we earned money in a savings account, that sounds good to me.

  • My emergency fund has been working for me for a few years now. I don’t see the point in having a giant pile of money just eroding in value every year*. So kudos to you for having your emergency fund work!

    *I do have about $2K in cash I can get to today, but the rest I can get by selling something and having it in a couple days, which is plenty of time since most emergencies can be covered by a credit card until the cash in is my account

    • EvenStevenMoney
      3 years ago

      Brian we are on the same page on this one, my philosophy is a touch different but not my leaps and bounds. I’m a credit card hater is the difference;)

  • You know I haven’t pulled the trigger on my emergency fund yet, but I think I am going to put it into a Vanguard Lifestyle fund. It has a really conservative stock/bond allocation and will definitely give me some cushion. I just hate the idea of having all that cash doing nothing. Thoughts?
    Jason recently posted…My First Financial ExperimentMy Profile

    • EvenStevenMoney
      3 years ago

      Let me first say I’m not a financial advisor:) I think a couple things need to enter your thought process when you consider investing for an emergency fund. What would I do worst case scenario for an emergency?(do I cash out, do I have extra money anywhere else, would I put it on a credit card) Do I have enough risk tolerance to lose 50% of my emergency fund? I think if you have a plan and risk tolerance for this, then yeah I think that’s a great start to an emergency fund/investment.

  • Very nice! I absolutely love receiving dividends, but alas, my emergency fund is all cash…
    Jessica recently posted…My 2015 Shopping BanMy Profile

    • EvenStevenMoney
      3 years ago

      It’s certainly not for everyone, personal finance is “personal” for a reason, you are doing awesome by having an emergency fund!

  • What to do with emergency funds? A classic question for many long term investors who hate seeing negative returns on their cash. For the most part I’m fully invested in dividend stocks and god forbid I need the cash I can do a quick sell and use CC to cover a right now expense. Earning sub 1% on $20k, $30l or $40k doesn’t cut it. As you say, $20 is better than a kick in the teeth.
    DivHut recently posted…Recent Stock Purchase – January 2015My Profile

    • EvenStevenMoney
      3 years ago

      As a dividend investor DivHut, I would also think it’s sacrilegious to not have all of your investments in dividend stocks! Also you are correct I do not like kicks in the teeth.

  • Very interesting, I definitely would like to earn more than the crappy sub 1% interest that my bank is paying me.
    Tawcan recently posted…Recent buysMy Profile

    • EvenStevenMoney
      3 years ago

      I mean eventually interest rates will have to go up, but it’s a risk to invest in stocks as well all know.

  • Dang! All these comments have me thinking we need to rethink our emergency fund status. There are some good points in that credit and other accounts can cover emergencies until the $$ is replaced by liquid options making MORE than 0.75% APR. What to do, what to do?
    Mr. SSC recently posted…Lifestyle creep: Is it killing your early retirement?My Profile

    • EvenStevenMoney
      3 years ago

      I would say to check out my response to Jason below, if risk isn’t your thing then making 0.75% and waiting for interest rates to go up may be your thing. I think this deserves a full post on emergency fund philosophy. If I go into all the details on what I think most people will think I’m crazy…..if they don’t already.

  • My emergency fund is sitting in a high interest savings account. I wish it was earning more, but I like to have things liquid!

    I do wish, however, that they would bring back the 5% and 6% CDs I used to buy.
    Holly@ClubThrifty recently posted…Saving Money, Getting Refunds with H&R BlockMy Profile

    • EvenStevenMoney
      3 years ago

      Certainly a preference many undertake with keeping it liquid, I don’t disagree with that choice. Yeah rates will go up, but seems like it’s going to be a very slow process to get there.

  • I’m with you on this, though I haven’t really put my emergency fund into action yet. The main reason was that we were saving for a house so I didn’t risk investing it (though I sometimes regret that decision as that big downpayment was sitting in “high yield” savings accounts for many years). I never really had a real set “emergency fund.” In case of a true emergency, all money in my portfolio is accessible. Sure some may not be as liquid, but of course you keep some liquid and there is also a credit card with it’s interest free grace period to tide you over until you can access your accounts.
    Andrew@LivingRichCheaply recently posted…Live For TodayMy Profile

    • EvenStevenMoney
      3 years ago

      I’ve heard the credit card mentioned a couple times with regards to a quick emergency fund until a stock sale has occurred, it worries me a little bit(my dislike of credit cards doesn’t help either), but only if that amount cannot be covered by your stock sale and even in that case what other options would you have, some sort of debt would need to occur.

  • I think I am in the same situation as yours. I am focusing on paying of my debts and making sure that I am financially secure. However I wouldn’t mind having some $20 in my account as dividends.
    Amos @ Modest Money recently posted…How I SaveMy Profile

  • Some of the things I would need my emergency fund for don’t take credit cards or charge extra fees for credit (rent, power bill).
    I feel better with my emergency fund in an FDIC insured account. 2008’s stock market dip led to layoffs which is the sort of scenario I would need the money for. I know I would earn more invested in stocks, but the risk of having less money when I need it most doesn’t sit well with me. *shrug*

    • EvenStevenMoney
      3 years ago

      I am certainly not a big believer in credit cards, I’m pretty close to anti-credit card at Even Steven Money. I certainly see the benefits of having money in a liquid account. I think putting the amount you feel comfortable with in the FDIC and the remaining in an investment is how I would treat the situation. Thanks for stopping by.

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