Your Brokerage Account Is Not an Emergency Fund | Jimmy Bisharat

By Jimmy Bisharat

I see this more often than you might think.

Someone has done a great job building up an investment account, but when we review their overall financial setup, they have very little cash available. When I ask about their emergency reserves, they point to the brokerage account.

That is where I see a potential problem.

A brokerage account can be a great tool for long-term investing, but relying on it as your emergency fund can expose you to unnecessary risk. If an unexpected expense comes up while the market is down, you may be forced to sell investments at exactly the wrong time.

I always come back to a simple idea: You do not want to invest the rent money.

Your brokerage account is invested for a reason. Ideally, that money has a longer-term purpose and enough time to ride through the inevitable ups and downs of the market.

But what happens if you lose your job during a market downturn? What if your car suddenly needs a major repair, something breaks in your home, or you have another large, unexpected expense?

You may suddenly need cash at the exact moment your investments are down.

Now you have two choices: find the money somewhere else or sell investments at a potentially unfavorable time. That is the risk.

This is why liquidity plays such an important role in financial planning. A common planning benchmark is to maintain roughly three to six months of expenses in readily accessible reserves, although the appropriate amount can vary significantly based on someone’s income, expenses, job stability, family situation, and other factors.

That money is not necessarily there to generate the highest possible return. It is there for protection. And keeping money liquid does not necessarily mean it has to sit in an account earning nothing. Depending on the available options, people may explore higher-yield savings accounts and other cash solutions that allow funds to remain accessible while potentially earning interest.

The bigger point is understanding the job each dollar has within your financial plan. Long-term investment money should have the ability to stay invested through difficult markets. Emergency reserves can help provide the flexibility to allow that to happen.

Having a large investment account can create a sense of financial security, but the structure behind those assets matters.

Ask yourself: If I had a major unexpected expense tomorrow, where would the money actually come from?

If the answer requires selling investments regardless of what the market is doing, it may be worth taking a closer look at your overall setup.

Want to review your setup? Are you overexposed or leaving yourself without enough liquidity? I will be offering a complimentary call to review how your cash, investments, and financial goals fit together and identify potential risks that could impact your broader financial plan and future.

Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California. Gerber Kawasaki Wealth & Investment Management is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Gerber Kawasaki Wealth & Investment Management 's current written disclosure brochure filed with the SEC which discusses, among other things, Gerber Kawasaki Wealth & Investment Management's business practices, services and fees, is available through the SEC's website at: http://www.adviserinfo.sec.gov .

Jimmy Bisharat is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.78B billion in assets under management and assets under advisement as of 06/30/26. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."