Should I try to hedge my emergency savings against currency and political concerns?
You have to balance several concerns here. The primary problem is that if you go to the effort of saving your money you want to also be sure that your savings will not lose too much of its value to inflation. Ukraine had a terrible inflation spike in 2015 for obvious reasons. Even as inflation has settled down in 2016, it is stabilizing around 12% which is very high  Exchange rates are your next concern. If you lose a large percentage of the value of your money just in the process of exchanging it, that also eats away at the value of your money. If you accept the US Federal Reserve target of 2% inflation, then you should only exchange money that you will hold long enough that both exchange fees will outweigh the 10% inflation advantage. Even in cases where you have placed your money in a foreign currency, there's a chance that your government could freeze accounts denominated in foreign currencies, so there's always the political risk that you have to factor in. For that reason keeping foreign currency in cash also has some appeal because it cannot be confiscated as easily. You could still certainly be robbed, so keeping all of your savings in cash isn't a great solution either. All in all, you are diversifying your savings if you use the strategy of balancing all three methods. Splitting it evenly to 5% for each method isn't the most important. I would suggest taking advantage of good exchange rates (as they appear) to time when you buy foreign currency. "First thing is that your English is pretty damn good.  You should be proud.  There are certainly adult native speakers, here in the US, that cannot write as well. I like your ambition, that you are looking to save money and improve yourself.   I like that you want to move your funds into a more stable currency. What is really tough with your plan and situation is your salary.  Here in the US banks will typically have minimum deposits that are high for you.  I imagine the same is true in the EU.  You may have to save up before you can deposit into an EU bank. To answer your question:  Yes it is very wise to save money in different containers.  My wife and I have one household savings account.  Yet that is broken down by different categories (using a spreadsheet).  A certain amount might be dedicated to vacation, emergency fund, or the purchase of a luxury item.  We also have business and accounts and personal accounts.   It goes even further.  For spending we use the ""envelope system"".  After our pay check is deposited, one of us goes to the bank and withdraws cash.  Some goes into the grocery envelope, some in the entertainment envelope, and so on.   So yes I think you have a good plan and I would really like to see a plan on how you can increase your income."
"Some thoughts: 1) Do you have a significant emergency fund (3-6 months of after-tax living expenses)? If not, you stand to take a significant loss if you have an unexpected need for cash that is tied up in investments. What if you lose/hate your job or your car breaks down? What if a you want to spend some time with a relative or significant other who learns they only have a few months to live? Having a dedicated emergency fund is an important way to avoid downside risk. 2) Lagerbaer has a good suggestion. Given that if you'd reinvested your dividends, the S&P 500 has returned about 3.5% over the last 5 years, you may be able to get a very nice risk-free return.  3) Do you have access to employer matching funds, such as in a 401(k) at work? If you get a dollar-for-dollar match, that is a risk-free pre-tax 100% return and should be a high priority. 4) What do you mean by ""medium"" volatility? Given that you are considering a 2/3 equity allocation, it would not be at all out of the realm of possibility that your balance could fall by 15% or more in any given year and take several years to recover. If that would spook you, you may want to consider lowering your equity weights. A high quality bond fund may be a good fit. 5) Personally, I would avoid putting money into stocks that I didn't need back for 10 years. If you only want to tie your money up for 2-5 years, you are taking a significant risk that if prices fall, you won't have time to recover before you need your money back. The portfolio you described would be appropriate for someone with a long-term investment horizon and significant risk tolerance, which is usually the case for young people saving for retirement. However, if your goals are to invest for 2-5 years only, your situation would be significantly different.  6) You can often borrow from an investment account to purchase a primary residence, but you must pay that amount back in order to avoid significant taxes and fees, unless you plan to liquidate assets. If you plan to buy a house, saving enough to avoid PMI is a good risk-free return on your money. 7) In general, and ETF or index fund is a good idea, the key being to minimize the compound effect of expenses over the long term. There are many good choices a la Vanguard here to choose from. 8) Don't worry about ""Buy low, sell high"". Don't be a speculator, be an investor (that's my version of Anthony Bourdain's, ""don't be a tourist, be a traveler""). A speculator wants to sell shares at a higher price than they were purchased at. An investor wants to share in the profits of a company as a part-owner. If you can consistently beat the market by trying to time your transactions, good for you - you can move to Wall Street and make millions. However, almost no one can do this consistently, and it doesn't seem worth it to me to try. I don't mean to discourage you from investing, just make sure you have your bases covered so that you don't have to cash out at a bad time. Best of luck! Edit Response to additional questions below. 1) Emergency fund. I would recommend not investing in anything other than cash equivalents (money market, short-term CDs, etc.) until you've built up an emergency fund. It makes sense to want to make the ""best"" use of your money, but you also have to account for risk. My concern is that if you were to experience one or more adverse life events, that you could lose a lot of money, or need to pay a lot in interest on credit card debt, and it would be prudent to self-insure against some of those risks. I would also recommend against using an investment account as an emergency fund account. Taking money out of investment accounts is inefficient because the commissions/taxes/fees can easily eat up a significant portion of your returns. Ideally, you would want to put money in and not touch it for a long time in order to take advantage of compounding returns. There are also high penalties for early disbursements from retirement funds. Just like you need enough money in your checking account to buy food and pay the rent every month, you need enough money in an emergency fund to pay for things that are a real possibility, even if they are less common. Using a credit card or an investment account is a relatively expensive way to do this. 2) Invest at all? I would recommend starting an emergency fund, and then beginning to invest for retirement. Once your retirement savings are on track, you can begin saving for whatever other goals you may have" First of all, I am sorry for your loss. At this time, worrying about money is probably the least of your concerns. It might be tempting to try to pay off all your debts at once, and while that would be satisfying, it would be a poor investment of your inheritance. When you have debt, you have to think about how much that debt is costing you to keep open. Since you have 0%APR on your student loan, it does not make sense to pay any more than the minimum payments. You may want to look into getting a personal loan to pay off your other personal debts. The interest rates for a loan will probably be much less than what you are paying currently. This will allow you to put a payment plan together that is affordable. You can also use your inheritance as collateral for the loan. Getting a loan will most likely give you a better credit rating as well. You may also be tempted to get a brand new sports car, but that would also not be a good idea at all. You should shop for a vehicle based on your current income, and not your savings. I believe you can get the same rates for an auto loan for a car up to 3 years old as a brand new car. It would be worth your while to shop for a quality used car from a reputable dealer. If it is a certified used car, you can usually carry the rest of the new car warranty. The biggest return on investment you have now is your employer sponsored 401(k) account. Find out how long it takes for you to become fully vested. Being vested means that you can leave your job and keep all of your employer contributions. If possible, max out, or at least contribute as much as you can afford to that fund to get employee matching. You should also stick with your job until you become fully vested. The money you have in retirement accounts does you no good when you are young. There is a significant penalty for early withdrawal, and that age is currently 59 1/2. Doing the math, it would be around 2052 when you would be able to have access to that money. You should hold onto a certain amount of your money and keep it in a higher interest rate savings account, or a money market account. You say that your living situation will change in the next year as well. Take full advantage of living as cheaply as you can. Don't make any unnecessary purchases, try to brown bag it to lunch instead of eating out, etc. Save as much as you can and put it into a savings account. You can use that money to put a down payment on a house, or for the security and first month's rent. Try not to spend any money from your savings, and try to support yourself as best as you can from your income. Make a budget for yourself and figure out how much you can spend every month. Don't factor in your savings into it. Your savings should be treated as an emergency fund. Since you have just completed school, and this is your first big job out of college, your income will most likely improve with time. It might make sense to job hop a few times to find the right position. You are much more likely to get a higher salary by changing jobs and employers than you are staying in the same one for your entire career. This generally is true, even if you are promoted at the by the same employer. If you do leave your current job, you would lose what your employer contributed if you are not vested. Even if that happened, you would still keep the portion that you contributed. If you place your emergency fund in your TFSA, you can withdraw it at any time (e.g. in an emergency), and then replace the withdrawn money in the next calendar year. Be careful there; you pay a hefty fine if you replace it in the current calendar year if this leads to an overcontribution. It's not an either-or thing, though. You could invest the money in a mutual fund inside your TFSA. I strongly recommend against this for your emergency fund, however. The whole point of an emergency fund is that you may need it immediately. So, keep it in an investment that you can liquidate quickly. Cash or very-near cash. While I obviously don't know your specific situation, I needed $10,000 within 24 hours and another $10,000 within two weeks during an emergency. In a world where you have large sums of money, you'd max out your RRSP and TFSA with investments and keep your emergency fund outside of both. But most of us aren't in that situation. In that case, it makes sense to use your TFSA for your emergency fund. I use some of my TFSA space for my emergency fund (savings account paying low interest, though people often like GICs) and some for investment (passive indexed stocks and bonds). Note that you need to pay taxes on your savings account interest, too, if held outside your TFSA and RRSP accounts. Is it sensible to keep savings in a foreign currency? The answer varies from one country to the next, but in the UK (or any other mature economy), I would advise against it. There are better ways to hedge against currency risks with the funds readily available to you through your ISA. You can keep your money relatively safe and liquid without ever paying a currency exchange fee. No. Empirically no.  The issue at hand has little to do with market confidence. This loss of confidence is the effect of the problem. It's cause is the result of a wholly inadequate fiscal transfer mechanism that is incapable of addressing demand shocks. While there are relevant political and ideological parameters worthy of analysis, they render themselves moot because of the structural constraints of monetary union.  My two cents. Depends on the countries and their rules about moving money across the border,  but in this case that appears entirely reasonable. Of course it would be a gamble unless you can predict the future values of currency better than most folks; there is no guarantee that the exchange rate will move in any particular direction. I have no idea whether any tax is due on profit from currency arbitrage. "First off, you generally want to park your emergency fund somewhere that is ""safe"", meaning something that is not subject to market fluctuations.  Your emergency fund is something you need to be able to count on when times are tough!  That rules out things like stock market investments. Secondly, you need to think about how quickly you will need access to the money.  If you have an emergency, odds are you don't want to be waiting around for weeks/months/years for the money to become available.  This rules out most fixed-term investments (Bonds, traditional CDs, etc). If you are concerned that you will need near-instant access to your emergency money, then you probably want to keep it in a Savings or Money Market Account at the same bank as your checking account.  Most banks will let you transfer money between local accounts instantly. Unfortunately, your local bank probably has pitiful interest rates for the Savings/MMA, far below the inflation rate.  This means your money will slowly lose value over time.  Be prepared to keep contributing to it! For most people, being able to draw the cash from your fund within a few days (<1 week) is sufficient.  Worst case, you charge something on your credit card, and then pay down the card when the emergency fund withdrawal arrives. If ""money within a few days"" is okay for you, there are a few options: Money Market (Mutual) Funds (not to be confused with a Money Market Account) - This is the traditional place to keep an emergency fund.  These are investment funds you can buy with a brokerage account.  An example of such a fund would be Fidelity Cash Reserves.  MMFs are not FDIC insured, so they are not exactly zero risk.  However, they are considered extremely safe.  They almost never go down in value (only a few times in the past few decades), and when they have, the fund manager or the Federal Govt stepped in to restore the value.  They usually offer slightly better return than a local savings account, and are available in taxable and non-taxable varieties. Online High-Yield Savings or Money Market Account - These are a relatively new invention.  It's basically a the same thing as what your local bank offers, but it's online-only.  No local branch means low overhead, so they offer higher interest rates (2.0% vs 0.5% for your local bank).  Some of them used to be over 5% before the economy tanked.  Like your local bank, it is FDIC insured. One bit of caution:  Some of these accounts have become ""gimmicky"" lately.  They have started to do things like promo rates for a few months, only offering the high interest rate on the first few $K deposited, limiting the amount that can be withdrawn, etc.  Be sure to read the details before you open an account! No-Penalty CDs - Certificates of Deposit usually offer a better rate than a Savings Account, but your money is locked up until the CD term is up (e.g. 36 months).  If you need to cash out before then, you pay a penalty.  Some banks have begun to offer CDs that you can cash out with no penalty at all.  These can offer better rates than the savings account.  Make sure it really is no-penalty though.  Also watch what your options are for slowly adding money over time.  This can be an issue if you want to deposit $100 from every paycheck. Rewards Checking Accounts - These are checking accounts that will pay a relatively high interest rate (3% or more) provided you generate enough activity.  Most of them will have requirements like you must have direct deposit setup with them, and you must do a minimum number of debit card transactions from the account per month.  If you can stay on top of the requirements, these can be a great deal.  If you don't stay on top of it, your interest rate usually drops back to something pitiful, though. Personally, we use the Online High-Yield Savings Account for our emergency fund.  I'm not going to make a specific recommendation as to which bank to use.  The best deal changes almost week to week.  Instead, I will say to check out Bankrate.com for a list of savings accounts and CDs that you can sort.  The Bank Deals blog is a good place to follow rate changes." "The risk is that greece defaults on it's debts and the rest of the eurozone chose to punish it by kicking it out of the Eurozone and cutting off it's banks from ECB funds. Since the greek government and banks are already in pretty dire straits this would leave greece with little choice but to forciblly convert deposits in those banks to a ""new drachma"". The exchange rate used for the forced conversions would almost certainly be unfavorable compared to market rates soon after the conversion. There would likely be capital controls to prevent people pulling their money out in the runup to the forced conversion. While I guess they could theoretically perform the forced conversion only on Euro deposits this seems politically unlikely to me."