Are emergency funds for suckers?

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Ivygirl
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Re: Are emergency funds for suckers?

Post by Ivygirl »

H-Town wrote: Thu Aug 20, 2020 11:26 am It's great that you do a sanity check on emergency funds.

Everyone's situation is different. You can't have a blanket emergency fund for everyone. So there is no simple answer that works for everyone.

However be careful to venture into mental accounting. Money is fungible. You should analyze your asset allocation as a whole, and not based on "buckets".
I've never been really convinced that money is fungible. It's not, always, is it?

Money in a Roth IRA is good for a lot of things. A place to stash contributions until you get enough for a 20% house down payment, then remove the contributions and leave the earnings behind to keep growing and keep the account open for future contributions. (I did this.) Money in a Roth is also good for tax diversification in early retirement if you are figuring out how much you can work and still draw Social Security. And Roth money can be an extended emergency fund in case of unemployment.

Money in a traditional IRA is not "fungible" with money in a Roth. They are two different buckets. You can't pull out the traditional IRA monies without penalty for any purpose, though I do think you can pull out some for a first time home purchase. And part of that money isn't yours because you have to pay taxes. Your money can't move freely to other purposes, which is what fungible means, right?

Money deposited with a new bank to get a sign-on bonus is not fungible with money you have in your old bank. The new bank has restrictions: you have to keep $15,000 in there for 6 months, and make X number of debit card purchases, etc. The banker is in the driver's seat for 6 months while you fulfill the requirements. The money in your old bank, well you are in the driver's seat. They are two different buckets.

Money you hope to get as a 401(k) match is not fungible with any other money you have. First you have to commit some portion of your income to get it, then you have to wait until your employer begins to match, then you have to wait to be fully vested, then you have to hope your employer does not discontinue the match. A different bucket from anything else entirely.

No, emergency funds are not for suckers. This is money that you own, money you can fold over and put in your pocket, money that really is "fungible" and can move anywhere.
PicassoSparks
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Re: Are emergency funds for suckers?

Post by PicassoSparks »

Here is how I think about this. The first rule of investing is don’t lose.

The main goal is not to maximize expected return. It’s to avoid ruin. Once ruin is safely held at bay, I can begin to look to maximize return on what I have available. The mathematically optimal long term strategy for the stock market is to leverage up as much as you can. Boggle said this in an interview I listened to today. BUT (he adds) only if you have a way to get bailed out if you fail. Most people don’t have that last part. I certainly don’t. I’m not a bank.

So I am more cautious than what’s mathematically optimal. An emergency fund is a fixed chunk of my portfolio and an ever diminishing percentage of my asset allocation. Effectively, it amounts to a multi-month delay in investing savings. (Money flows in, sits in the emergency fund for a few months and when it’s replaced by new money it flows out.) This is slightly less optimal than if I’d invested it all immediately (time in the market beats timing the market). But even Vanguard’s DCA studies show that DCA outperforms lump sum 1/3 of the time. So the net effect of the delay is pretty small and, in my view, outweighed by the utility of a cushion against ruin.

Expected returns are not actual returns. Many investors and smart firms have gone bust by maximizing expected returns by levering up risk and then the risk shows up. I can try to tune my expected returns but I’m going to live with my actual returns whatever else happens. An emergency fund dramatically lowers my risk of ruin at the cost of a little mathematical optimization.

I don’t think that makes me a sucker.
Last edited by PicassoSparks on Thu Aug 20, 2020 1:42 pm, edited 1 time in total.
patrick
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Re: Are emergency funds for suckers?

Post by patrick »

I had near-simultaneous emergencies last year, but didn't need a cash emergency fund.

I fractured a tooth resulting in a large dental bill even though I had insurance. I also lost my job. Both of these happened less than a week apart!

The dental bill, along with regular day to day spending, was paid with a credit card. This gives at least 20 days to pay (depending on when in the statement cycle it hits) which is more than enough time to sell investments to cover it. Housing payments couldn't go on the credit card without an extra fee, but they are known well in advance, leaving plenty of time to sell investments to cover them.

Even though you'd rarely need an emergency fund, I can think of a couple of reasons you might want one:

First, having to sell investments twice a month (once for the housing payment, once for the credit card coming due) requires lots of attention and could be costly if you make a mistake and the money doesn't get transferred in time. If you just want to buffer against this, then the 2 months or so would be plenty and you don't need the "traditional" 6 months.

Also, at the current time, deposit accounts offer good yields compared to other fixed income, so you might want a fair amount of cash even if not needed for emergencies. Vanguard money market yields only 0.06%, and even total bond market is not that much better at 1.14%. On the deposit side, you can get a plain savings account from Affirm paying 1.3%, and you can get much more if you are willing to accept accounts with more restrictions.
stoptothink
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Re: Are emergency funds for suckers?

Post by stoptothink »

nisiprius wrote: Thu Aug 20, 2020 12:53 pm
In my particular case, DW likes to keep a lot of cash available for her comfort.
Keep your wife comfortable. That what money is for.

Oh, and don't forget: Why women are better at investing
Ha, my wife is the opposite. Other than sending her the quarterly portfolio update, she doesn't look at our finances. When I told her we had ~$9k in our ALLY account (EF) a few weeks ago, her response: "why? Go out and buy something". I did, more VTSAX. We (or more correctly, I) like to max roth's and 529 contributions at the firs of the year (so the goal is to have just over $20k in savings on January 1st), but other than that wife sees no point in having more than maybe $1k sitting around.
shess
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Re: Are emergency funds for suckers?

Post by shess »

Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money deposited with a new bank to get a sign-on bonus is not fungible with money you have in your old bank. The new bank has restrictions: you have to keep $15,000 in there for 6 months, and make X number of debit card purchases, etc. The banker is in the driver's seat for 6 months while you fulfill the requirements. The money in your old bank, well you are in the driver's seat. They are two different buckets.
I'll quibble with this one. You only have to do those things if you want to get the sign-on bonus. But if you have an unexpected need for that $10k, keeping the sign-on bonus is probably not your main concern. In fact, in my opinion that's an advantage, if the need for money isn't enough to forgo the sign-on bonus or break a CD or whatever, then it's probably not really an emergency.
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willthrill81
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Re: Are emergency funds for suckers?

Post by willthrill81 »

Nate79 wrote: Thu Aug 20, 2020 11:23 am
willthrill81 wrote: Thu Aug 20, 2020 10:26 am
UpsetRaptor wrote: Thu Aug 20, 2020 10:19 am This comes up frequently. Here's another similar thread:
viewtopic.php?t=311324

I'm of similar mindset. It doesn't make much sense for a young accumulator in their 20s to stick their first 50-100K of savings into cash to hold forever. I guess that's the super safest thing, but...
When you take into account the fact that money invested at a 7.2% real return (for the sake of illustration) doubles every decade, $50k when you're 25 is like $200k when you're 45, $400k when you're 55, and $800k when you're 65, the opportunity cost of holding on to so much cash when you're young seems to me to be at least as great as almost any sudden financial emergency they are likely at all to encounter, especially if they are insured appropriately.

I'm always saddened when I hear people rattle off 'everyone needs 3-6 months of expense in a very safe instrument' with no regard to individuals' specific needs. Certainly some people need that and even more, but many do not. Circumstances should weigh heavily when determining how much of one's capital one is willing to put on the sidelines and not in the game.
Wow Will, you are now projecting a 7.2% real return? :D
It was just an illustration. :wink: But over the very long-term (e.g. 30+ years), I do think that it's plausible that stocks will return something close to that. But I wouldn't recommend basing one's plan around that return, even for a very aggressive investor. That's another thread though.
Nate79 wrote: Thu Aug 20, 2020 11:26 am
willthrill81 wrote: Thu Aug 20, 2020 10:17 am People don't need an emergency fund per se. They need access to funds to cover unexpected expenses. Many use an emergency fund to provide that access. Many others have little or no need for such access. We are in the latter group.
I like to say people need an emergency plan. It's an important distinction vs just an emergency fund as you say.

When things go wrong, what do you do? There are all sorts of scenarios of things that can and do go wrong.
Absolutely. You need a plan for dealing with financial emergencies. For many, those plans can and should call for an emergency fund of some size. For many others, their investment portfolio fulfills that need.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Nate79
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Re: Are emergency funds for suckers?

Post by Nate79 »

m@ver1ck wrote: Thu Aug 20, 2020 10:38 am My AA including the EF is at 80/20. I just include my EF in the AA. Net AA is around 1.4M now. I now prefer bonds in taxable because the yields are so low.
We do the same. Bonds as emergency fund with easy access in a taxable account and as part of our asset allocation there is no impact on investment return. The bond funds in our taxable accounts are a range of maturities from money market and short term bond funds.
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willthrill81
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Re: Are emergency funds for suckers?

Post by willthrill81 »

lostdog wrote: Thu Aug 20, 2020 11:40 am
willthrill81 wrote: Thu Aug 20, 2020 10:17 am People don't need an emergency fund per se. They need access to funds to cover unexpected expenses. Many use an emergency fund to provide that access. Many others have little or no need for such access. We are in the latter group.
Will,

What method landed you in the latter group?
As a tenured professor, I have a indefinite employment contract with my employer. It's not the absolute guarantee of future employment that many believe it to be, but it's admittedly much more secure than most positions. Among other things, current law basically requires my employer to grant me a minimum of one year's notice before terminating my contract. During that year, we could make significant preparations for other employment, change our saving plan, etc. Also, I have access to a 457 plan, which is being maxed out, and I would have full access to that account with no early withdrawal penalty as soon as I separate from service to my employer. Further, we also have a fund that we use for irregular and non-monthly expenditures (discussed in this thread), that usually has at least a couple of months of living expenses at any given moment in time. Finally, we are well insured on all fronts. Given all that, we see no need to keep more than a token amount of cash on hand.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Quirkz
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Re: Are emergency funds for suckers?

Post by Quirkz »

ray.james wrote: Thu Aug 20, 2020 1:13 pm I do use emergency fund for a completely different reason. We have access to 2 401k, 2 roths, 2 MBR. We do not even come close filling half of that. Since our major net worth will be stashed in retirement style accounts, I chose to have an emergency fund to avoid sub optimal cashout when "emergecy" arises. The drag is small compared to wealth we will be/are creating.
Ditto. I've had an emergency fund since I first heard the concept roughly 18 years ago. I still haven't gotten to the point I can max out my tax-advantaged retirement investing, so I've basically got nothing in taxable except for the EF.

If I ever got to the point where tax-advantaged space was full and started to accumulate enough taxable investments as well, I'd lump my EF into that, but until then I find the EF to be a valuable protection.
terran
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Re: Are emergency funds for suckers?

Post by terran »

Quirkz wrote: Thu Aug 20, 2020 2:04 pm
ray.james wrote: Thu Aug 20, 2020 1:13 pm I do use emergency fund for a completely different reason. We have access to 2 401k, 2 roths, 2 MBR. We do not even come close filling half of that. Since our major net worth will be stashed in retirement style accounts, I chose to have an emergency fund to avoid sub optimal cashout when "emergecy" arises. The drag is small compared to wealth we will be/are creating.
Ditto. I've had an emergency fund since I first heard the concept roughly 18 years ago. I still haven't gotten to the point I can max out my tax-advantaged retirement investing, so I've basically got nothing in taxable except for the EF.

If I ever got to the point where tax-advantaged space was full and started to accumulate enough taxable investments as well, I'd lump my EF into that, but until then I find the EF to be a valuable protection.
One counter argument to this is using a Roth IRA as an emergency fund. Worst case is you end up withdrawing it for an emergency and earned interest tax free in the meantime, and best case is you never end up needing it and you have more in Roth than you would otherwise. You could even open one at a "high" interest bank like Ally where you probably already have your emergency fund.
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Clever_Username
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Re: Are emergency funds for suckers?

Post by Clever_Username »

I don't have a designated emergency fund, although I do have an emergency plan. I also have well over a year's expenses in Series I Bonds, I max out a governmental 457 every year (since I first gained access to it, which was last year) and have about a year's expenses in it now, I have well over three years' expenses in bond funds in taxable, and I have fairly secure employment. And if that isn't enough, I have Roth contributions and could even take from old workplace plans and pay a penalty if it draws to that.

I think everyone's emergency plan, whether or not they have a designated pile of money called an emergency fund, should also include knowing what their severance package is (if any), how much notice their employer has to give them to dismiss them (if any), and what unemployment insurance they'd qualify for (if any), and how to obtain the same, and the typical wait for the same, if needed.

Before I had the iBonds and the 457 and the taxable account, such as when I was in graduate school or early in employment, I kept six months' expenses in cash in my bank account. I'm very glad I did. I do wish I had understood Series I Bonds back then, maybe I could have converted some of it or something. Oh well.

One thing it enabled me to do, by the way, was to turn down a sub-optimal job offer out of school while waiting to hear from a better prospect. If I were running the risk of being out on the street if I didn't start work immediately, I might have taken a job I believe I'd now regret, especially knowing how the time since graduation has gone for me.

I think the notion of an emergency fund is real useful in the context of a 23 year old who just saved their first $5000, might have student loans to repay, and wonders if that $5000 would be better off being parked in Apple stock or Tesla, or even a total market fund. It's also great for peace of mind and for the vast majority of people who don't have reserves on hand where an emergency plan may make sense.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.
j0nnyg1984
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Re: Are emergency funds for suckers?

Post by j0nnyg1984 »

I sleep happily with ~100k in my “emergency funds.”

In reality, I don’t need this much money in my EF, but I don’t want a taxable investing account and I don’t have anywhere else to put it. Strictly from my expenses, I’d only need a 15-25k EF, but I’m really not mad at my current situation.
Ivygirl
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Re: Are emergency funds for suckers?

Post by Ivygirl »

shess wrote: Thu Aug 20, 2020 1:49 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money deposited with a new bank to get a sign-on bonus is not fungible with money you have in your old bank. The new bank has restrictions: you have to keep $15,000 in there for 6 months, and make X number of debit card purchases, etc. The banker is in the driver's seat for 6 months while you fulfill the requirements. The money in your old bank, well you are in the driver's seat. They are two different buckets.
I'll quibble with this one. You only have to do those things if you want to get the sign-on bonus. But if you have an unexpected need for that $10k, keeping the sign-on bonus is probably not your main concern. In fact, in my opinion that's an advantage, if the need for money isn't enough to forgo the sign-on bonus or break a CD or whatever, then it's probably not really an emergency.
Not so fast if you please. :) I have given this exact situation a lot of thought because I am in it right now.

Chase has been bugging me relentlessly to please, please, take their $600 to open savings and checking with them. Wheee! Free money, right? Do you know why I have not done this?

They require $15,000 of new money to be deposited in the savings account, and for checking, they require direct deposit of my paycheck. $15,000 is pretty much every dollar of cash I have, something which Chase with their algorithm has no doubt shrewdly deduced and factored into their offer. Basically to take their offer I have to let go and close out of my previous banking arrangements. If I do that and move everything I am locked into a situation in which I am likely to make behavioral errors. Would I really give up that sign-on bonus, or would I fall in love with it, and not be able to bear giving it up? Chase thinks the latter is more likely, and they have big buildings and wear fancy suits.

For example, under my old banking arrangement if I have to make a large purchase, I just do it. Under the new Chase arrangement, I would likely put it on a credit card, thinking, well I've got time to pay it off, I certainly don't want to lose my free $300 they will give me in 6 months if I don't ever use any of my own money. It's a prison of hoping for something for nothing, when before I was free to do what was best for me. I used to fall for deals like that and all it got me was debt and suboptimal financial decisions. Chase wants me to grant them a measure of control over my entire personal financial life and it is not because they care about my wellbeing. Deals like the one Chase is offering can really only be good for already wealthy people - people who have $30,000 in cash, not $15,000. People like me are Chase's fresh meat. Did I mention I have a Chase credit card? You know, the credit card I would be using if I did make that behavioral error?

So those of you who do have $30,000, well for you this could be a good deal. Working class and middle class people (I'm middle class now) should not be thinking "hey I must have arrived, look Chase thinks I have" and be tempted by deals that only work for the wealthy.

So no thanks Chase, I'll stay in the driver's seat of my finances. Catch you later maybe if I ever have $30,000 in savings.
Seasonal
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Re: Are emergency funds for suckers?

Post by Seasonal »

Grt2bOutdoors wrote: Thu Aug 20, 2020 12:59 pm
Seasonal wrote: Thu Aug 20, 2020 10:05 am
Nate79 wrote: Thu Aug 20, 2020 9:48 am Nope, I think it's the other way around. Suckers don't have emergency funds. But hey, the average American is broke, in debt up to their eyeballs with no savings. The recent economic shock showed that anyone can be effected and need an emergency fund and without significant govt action there would have been a whole lot of people in significant world of hurt.
The median net worth was $97,300 (average was much higher) according to https://www.marketwatch.com/story/whats ... 2018-09-24 Do you have more recent data?

There are a whole lot of people in very precarious condition, but let's not exaggerate too much.
Median net worth including home equity. Try getting your home equity out in a severe recession when you’ve lost your job and the banks cut home equity lines. Cashing out ones retirement account is suboptimal as well due to the penalties involved. Finally, outside of this forum I agree with the poster who says many people are in a precarious state of personal finance.
According to the article: The median net worth of homeowners was $231,400. Even so, liquidity can be a real problem.
lostdog
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Re: Are emergency funds for suckers?

Post by lostdog »

willthrill81 wrote: Thu Aug 20, 2020 1:56 pm
lostdog wrote: Thu Aug 20, 2020 11:40 am
willthrill81 wrote: Thu Aug 20, 2020 10:17 am People don't need an emergency fund per se. They need access to funds to cover unexpected expenses. Many use an emergency fund to provide that access. Many others have little or no need for such access. We are in the latter group.
Will,

What method landed you in the latter group?
As a tenured professor, I have a indefinite employment contract with my employer. It's not the absolute guarantee of future employment that many believe it to be, but it's admittedly much more secure than most positions. Among other things, current law basically requires my employer to grant me a minimum of one year's notice before terminating my contract. During that year, we could make significant preparations for other employment, change our saving plan, etc. Also, I have access to a 457 plan, which is being maxed out, and I would have full access to that account with no early withdrawal penalty as soon as I separate from service to my employer. Further, we also have a fund that we use for irregular and non-monthly expenditures (discussed in this thread), that usually has at least a couple of months of living expenses at any given moment in time. Finally, we are well insured on all fronts. Given all that, we see no need to keep more than a token amount of cash on hand.
Roger that. Very cool.
Monsterflockster
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Re: Are emergency funds for suckers?

Post by Monsterflockster »

Are emergency funds for suckers? Only until you need one.
Lee_WSP
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Re: Are emergency funds for suckers?

Post by Lee_WSP »

atdharris wrote: Thu Aug 20, 2020 9:54 am This is something I go back and forth on. If my taxable portfolio is over six-figures, I question why I keep $40,000 in CDs/HYSA and another $15,000 in bonds in my taxable account. I understand the notion that I need some cash in case of an emergency, but even when I did suffer an emergency, I had ways to pay for it (either through 0% loans and pay it down out of cash flow), etc. I suppose if I lost my job, it would be a different story..
CD's are more like individual short term bonds. They just don't increase in capital value when rates decrease (because you'd have to find a buyer but I suppose it's possible) so you have to hold them until maturity. As such, I think CD's are more like adding STT's to your portfolio mix.

I don't have anything to add to the HYS amounts one should or should not hold other than to say that you need some liquidity for things like car and home repairs but that could be covered by the checking account and cash inflows.
Grt2bOutdoors
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Re: Are emergency funds for suckers?

Post by Grt2bOutdoors »

Monsterflockster wrote: Thu Aug 20, 2020 2:57 pm Are emergency funds for suckers? Only until you need one.
Or as Warren Buffett described “you find out who’s been swimming naked when the tide pulls out”.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
shess
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Re: Are emergency funds for suckers?

Post by shess »

Ivygirl wrote: Thu Aug 20, 2020 2:29 pm
shess wrote: Thu Aug 20, 2020 1:49 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money deposited with a new bank to get a sign-on bonus is not fungible with money you have in your old bank. The new bank has restrictions: you have to keep $15,000 in there for 6 months, and make X number of debit card purchases, etc. The banker is in the driver's seat for 6 months while you fulfill the requirements. The money in your old bank, well you are in the driver's seat. They are two different buckets.
I'll quibble with this one. You only have to do those things if you want to get the sign-on bonus. But if you have an unexpected need for that $10k, keeping the sign-on bonus is probably not your main concern. In fact, in my opinion that's an advantage, if the need for money isn't enough to forgo the sign-on bonus or break a CD or whatever, then it's probably not really an emergency.
Not so fast if you please. :) I have given this exact situation a lot of thought because I am in it right now.

Chase has been bugging me relentlessly to please, please, take their $600 to open savings and checking with them. Wheee! Free money, right? Do you know why I have not done this?

They require $15,000 of new money to be deposited in the savings account, and for checking, they require direct deposit of my paycheck. $15,000 is pretty much every dollar of cash I have, something which Chase with their algorithm has no doubt shrewdly deduced and factored into their offer. Basically to take their offer I have to let go and close out of my previous banking arrangements. If I do that and move everything I am locked into a situation in which I am likely to make behavioral errors. Would I really give up that sign-on bonus, or would I fall in love with it, and not be able to bear giving it up? Chase thinks the latter is more likely, and they have big buildings and wear fancy suits.
IMHO, this is a good reason not to chase (*cough*) sign-up bonuses that have balance requirements like this, not a good reason not to park emergency funds in such sign-up bonuses. Just like parking your emergency fund in a CD, you need to have enough cash to park the CD _and_ enough cash to live on!
mbasherp
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Re: Are emergency funds for suckers?

Post by mbasherp »

If you ask my asset allocation, I would say I’m largely 100% equities. That’s only partially true, because we have cash as well. If you add in the cash for ~6 months expenses plus some upcoming big ticket expenses, we would actually look like 90/10.

Have a plan for big emergencies. Also have all assets allocated in a way that makes sense for short/medium/long term goals holistically.
No one who does all of this well is a sucker.

It’s as easy to conceive of someone who needs cash immediately as it is to think of someone who would never need dedicated cash. Know where you are on the spectrum and act accordingly.
mbasherp
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Re: Are emergency funds for suckers?

Post by mbasherp »

Ivygirl wrote: Thu Aug 20, 2020 2:29 pm
shess wrote: Thu Aug 20, 2020 1:49 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money deposited with a new bank to get a sign-on bonus is not fungible with money you have in your old bank. The new bank has restrictions: you have to keep $15,000 in there for 6 months, and make X number of debit card purchases, etc. The banker is in the driver's seat for 6 months while you fulfill the requirements. The money in your old bank, well you are in the driver's seat. They are two different buckets.
I'll quibble with this one. You only have to do those things if you want to get the sign-on bonus. But if you have an unexpected need for that $10k, keeping the sign-on bonus is probably not your main concern. In fact, in my opinion that's an advantage, if the need for money isn't enough to forgo the sign-on bonus or break a CD or whatever, then it's probably not really an emergency.
Not so fast if you please. :) I have given this exact situation a lot of thought because I am in it right now.

Chase has been bugging me relentlessly to please, please, take their $600 to open savings and checking with them. Wheee! Free money, right? Do you know why I have not done this?

They require $15,000 of new money to be deposited in the savings account, and for checking, they require direct deposit of my paycheck. $15,000 is pretty much every dollar of cash I have, something which Chase with their algorithm has no doubt shrewdly deduced and factored into their offer. Basically to take their offer I have to let go and close out of my previous banking arrangements. If I do that and move everything I am locked into a situation in which I am likely to make behavioral errors. Would I really give up that sign-on bonus, or would I fall in love with it, and not be able to bear giving it up? Chase thinks the latter is more likely, and they have big buildings and wear fancy suits.

For example, under my old banking arrangement if I have to make a large purchase, I just do it. Under the new Chase arrangement, I would likely put it on a credit card, thinking, well I've got time to pay it off, I certainly don't want to lose my free $300 they will give me in 6 months if I don't ever use any of my own money. It's a prison of hoping for something for nothing, when before I was free to do what was best for me. I used to fall for deals like that and all it got me was debt and suboptimal financial decisions. Chase wants me to grant them a measure of control over my entire personal financial life and it is not because they care about my wellbeing. Deals like the one Chase is offering can really only be good for already wealthy people - people who have $30,000 in cash, not $15,000. People like me are Chase's fresh meat. Did I mention I have a Chase credit card? You know, the credit card I would be using if I did make that behavioral error?

So those of you who do have $30,000, well for you this could be a good deal. Working class and middle class people (I'm middle class now) should not be thinking "hey I must have arrived, look Chase thinks I have" and be tempted by deals that only work for the wealthy.

So no thanks Chase, I'll stay in the driver's seat of my finances. Catch you later maybe if I ever have $30,000 in savings.
You sound very unhappy with Chase.

By coincidence, I just got the rest of my $600 bonus on $15k paid from them yesterday. We have saved in advance for a new HVAC for when ours breaks. It was a perfect way to have that earn more money. If we needed it, I would’ve withdrawn it. If not, we earn $600. Quite literally, no downside.

We are not rich, but we do try to get the most out of what we have. I’m appreciative of the offer!
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Re: Are emergency funds for suckers?

Post by chrisam314 »

I think people unnecessarily complicate this concept.

There's a business opportunity here. I'm going to start selling 'term-job' policies, as opposed to term-life. If your family loses their income I'll make sure they don't starve to death. For that security just go ahead and pay me a nice little monthly premium.

That's all an emergency fund really is. A self funded term-job policy.

If you feel comfortable keeping your self funded term-job policy in risky assets that is up to you. I'd recommend running a worst-case scenario (stocks plummet, credit markets freeze) to pressure test it but that's up to you. The entire thing is personal. Just like insurance. Do what you think is right for you.
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Re: Are emergency funds for suckers?

Post by 3CheersforLkyJack »

Pre-Covid: Many threads about going 100% stocks and having no need for an emergency fund. Everyone saying to stay the course.

Covid Market Drop: Threads on getting out of stocks, moving to cash, unable to stay the course, this time is different, people happy to have an emergency fund of 12+ months.

Recent Market Recover: Threads returning about 100% stocks and having no need for an emergency fund.

Human emotion is incredibly interesting to watch unfold, even in a community as disciplined as Bogleheads.
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Re: Are emergency funds for suckers?

Post by willthrill81 »

Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money in a traditional IRA is not "fungible" with money in a Roth.
A pre-tax dollar is rarely equivalent to a post-tax dollar, if that's what you're getting at. But any dollar is equivalent to any other dollar, which is what fungibility refers to. Precious stones are not fungible, by comparison.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Are emergency funds for suckers?

Post by brad.clarkston »

Ivygirl wrote: Thu Aug 20, 2020 1:32 pm
H-Town wrote: Thu Aug 20, 2020 11:26 am It's great that you do a sanity check on emergency funds.

Everyone's situation is different. You can't have a blanket emergency fund for everyone. So there is no simple answer that works for everyone.

However be careful to venture into mental accounting. Money is fungible. You should analyze your asset allocation as a whole, and not based on "buckets".
Money in a traditional IRA is not "fungible" with money in a Roth. They are two different buckets. You can't pull out the traditional IRA monies without penalty for any purpose, though I do think you can pull out some for a first time home purchase. And part of that money isn't yours because you have to pay taxes. Your money can't move freely to other purposes, which is what fungible means, right?
and can move anywhere.

You can take out a loan against your 401k for a home purchase or a HELOC but that is not the same thing as pulling the money from the 401K account.
I wouldn't recommend that even in a desperate situation. You ether have the money for the purchase or you don't if that's the case it's not wise to kill your compound interest for the year to two years it takes to pay it back.
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Re: Are emergency funds for suckers?

Post by H-Town »

Ivygirl wrote: Thu Aug 20, 2020 1:32 pm
H-Town wrote: Thu Aug 20, 2020 11:26 am It's great that you do a sanity check on emergency funds.

Everyone's situation is different. You can't have a blanket emergency fund for everyone. So there is no simple answer that works for everyone.

However be careful to venture into mental accounting. Money is fungible. You should analyze your asset allocation as a whole, and not based on "buckets".
I've never been really convinced that money is fungible. It's not, always, is it?
Not always, but you won't miss the boat either.

In the event of emergency, you can still pull money out of those tax deferred accounts. You do pay penalties if the Congress does not issue a relief provision, and then pay your share of taxes.
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Re: Are emergency funds for suckers?

Post by willthrill81 »

H-Town wrote: Thu Aug 20, 2020 4:50 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm
H-Town wrote: Thu Aug 20, 2020 11:26 am It's great that you do a sanity check on emergency funds.

Everyone's situation is different. You can't have a blanket emergency fund for everyone. So there is no simple answer that works for everyone.

However be careful to venture into mental accounting. Money is fungible. You should analyze your asset allocation as a whole, and not based on "buckets".
I've never been really convinced that money is fungible. It's not, always, is it?
Not always, but you won't miss the boat either.

In the event of emergency, you can still pull money out of those tax deferred accounts. You do pay penalties if the Congress does not issue a relief provision, and then pay your share of taxes.
I don't fully understand why so many people think that paying an early withdrawal penalty is the worst possible financial move a person can make. It's already been mathematically shown that paying the early withdrawal penalty is almost as good as the Roth conversion ladder or using the SEPP 72(t) approach when all is said and done.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Are emergency funds for suckers?

Post by Actin »

I used to keep 50k in a regular savings account because it was what I thought you were supposed to do. Everyone always told me to do it.

Now, I only keep a 5k each in my business and personal checking. I don't care if it goes below that during the month, but anything above that gets sent off to investments at the end of every month.

I actually did a 10k challenge with myself last year. I had 50k in my EF and lump sum invested it all into VTSAX in my taxable account. I then challenged myself to see how fast I could get it back up to 10k. It didn't take very long at all and I didn't have a single emergency during that time and still haven't needed it, so I just do it again every time it gets back to 10k.

I don't think EFs are necessary, but you do want enough liquid cash to pay for things such as co-pays. That's not something that I'd want to be taking time out of my day and selling equities for. There are very few emergencies that checking account balance of a few thousand couldn't handle
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Re: Are emergency funds for suckers?

Post by cantabtim »

Grt2bOutdoors wrote: Thu Aug 20, 2020 3:16 pm
Monsterflockster wrote: Thu Aug 20, 2020 2:57 pm Are emergency funds for suckers? Only until you need one.
Or as Warren Buffett described “you find out who’s been swimming naked when the tide pulls out”.
All insurance is a waste of money until you have to make a claim. Only a very few of the oldest Bogleheads remember the great depression, but many of us experienced the dotcom crash and the great recession. I experienced 1970s Britain at close hand (admittedly shielded by my wonderful parents) and I'm sure others here lived through even more devastating financial and economic crises in Asian and continental European countries. Never believe it couldn't happen here.

We're now in another strange and unprecedented time. If you can afford it (and millions cannot) having a liquid emergency fund doesn't make you a sucker, it makes you a realist.
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Re: Are emergency funds for suckers?

Post by Ivygirl »

mbasherp wrote: Thu Aug 20, 2020 3:50 pm
Ivygirl wrote: Thu Aug 20, 2020 2:29 pm
shess wrote: Thu Aug 20, 2020 1:49 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money deposited with a new bank to get a sign-on bonus is not fungible with money you have in your old bank. The new bank has restrictions: you have to keep $15,000 in there for 6 months, and make X number of debit card purchases, etc. The banker is in the driver's seat for 6 months while you fulfill the requirements. The money in your old bank, well you are in the driver's seat. They are two different buckets.
I'll quibble with this one. You only have to do those things if you want to get the sign-on bonus. But if you have an unexpected need for that $10k, keeping the sign-on bonus is probably not your main concern. In fact, in my opinion that's an advantage, if the need for money isn't enough to forgo the sign-on bonus or break a CD or whatever, then it's probably not really an emergency.
Not so fast if you please. :) I have given this exact situation a lot of thought because I am in it right now.

Chase has been bugging me relentlessly to please, please, take their $600 to open savings and checking with them. Wheee! Free money, right? Do you know why I have not done this?

They require $15,000 of new money to be deposited in the savings account, and for checking, they require direct deposit of my paycheck. $15,000 is pretty much every dollar of cash I have, something which Chase with their algorithm has no doubt shrewdly deduced and factored into their offer. Basically to take their offer I have to let go and close out of my previous banking arrangements. If I do that and move everything I am locked into a situation in which I am likely to make behavioral errors. Would I really give up that sign-on bonus, or would I fall in love with it, and not be able to bear giving it up? Chase thinks the latter is more likely, and they have big buildings and wear fancy suits.

For example, under my old banking arrangement if I have to make a large purchase, I just do it. Under the new Chase arrangement, I would likely put it on a credit card, thinking, well I've got time to pay it off, I certainly don't want to lose my free $300 they will give me in 6 months if I don't ever use any of my own money. It's a prison of hoping for something for nothing, when before I was free to do what was best for me. I used to fall for deals like that and all it got me was debt and suboptimal financial decisions. Chase wants me to grant them a measure of control over my entire personal financial life and it is not because they care about my wellbeing. Deals like the one Chase is offering can really only be good for already wealthy people - people who have $30,000 in cash, not $15,000. People like me are Chase's fresh meat. Did I mention I have a Chase credit card? You know, the credit card I would be using if I did make that behavioral error?

So those of you who do have $30,000, well for you this could be a good deal. Working class and middle class people (I'm middle class now) should not be thinking "hey I must have arrived, look Chase thinks I have" and be tempted by deals that only work for the wealthy.

So no thanks Chase, I'll stay in the driver's seat of my finances. Catch you later maybe if I ever have $30,000 in savings.
You sound very unhappy with Chase.

By coincidence, I just got the rest of my $600 bonus on $15k paid from them yesterday. We have saved in advance for a new HVAC for when ours breaks. It was a perfect way to have that earn more money. If we needed it, I would’ve withdrawn it. If not, we earn $600. Quite literally, no downside.

We are not rich, but we do try to get the most out of what we have. I’m appreciative of the offer!
I'm not at all unhappy with Chase. I've been their customer since 1995.
Ivygirl
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Re: Are emergency funds for suckers?

Post by Ivygirl »

shess wrote: Thu Aug 20, 2020 3:38 pm IMHO, this is a good reason not to chase (*cough*) sign-up bonuses
Very well played. :D I needed that smile.
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Re: Are emergency funds for suckers?

Post by Frugalbear »

Johm221122 wrote: Thu Aug 20, 2020 12:38 pm No, emergency funds are not for suckers. My whole portfolio is my emergency fund. If something were to happen my whole portfolio would be my emergency fund.
There is something very charming about this comment. Agreed, but disagree...if push comes to shove, I agree!
Ivygirl
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Re: Are emergency funds for suckers?

Post by Ivygirl »

willthrill81 wrote: Thu Aug 20, 2020 4:06 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money in a traditional IRA is not "fungible" with money in a Roth.
A pre-tax dollar is rarely equivalent to a post-tax dollar, if that's what you're getting at. But any dollar is equivalent to any other dollar, which is what fungibility refers to. Precious stones are not fungible, by comparison.
No, the statement I disagreed with was "Money is fungible." Precious stones are not money, and thus not relevant.

If "a pre-tax dollar is rarely equivalent to a post-tax dollar," then I think you agree with me: money is not always fungible, and buckets are not mere "mental" accounting, they are actual accounting.
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Re: Are emergency funds for suckers?

Post by AlohaJoe »

UpsetRaptor wrote: Thu Aug 20, 2020 10:19 am This comes up frequently. Here's another similar thread:
viewtopic.php?t=311324

I'm of similar mindset. It doesn't make much sense for a young accumulator in their 20s to stick their first 50-100K of savings into cash to hold forever. I guess that's the super safest thing, but...
I agree that building up the stereotypical "what if you're unemployed for 3-6 months" emergency funds for people in their 20s doesn't make much sense. Building up a 6-month emergency fund can take up your entire 20s for many people, especially once you factor in things like paying off college debt, saving for a down payment on your first house, having children, and contributing to a 401k up to the employer match.

But I think you could also make a case that they do make sense in your 30s or 40s when you it is harder to say "well, I'll just move in with roommates to save money" or "I guess I'll pack up and move to New York to find a new job" when unemployment strikes.
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Re: Are emergency funds for suckers?

Post by willthrill81 »

Ivygirl wrote: Thu Aug 20, 2020 8:12 pm
willthrill81 wrote: Thu Aug 20, 2020 4:06 pm
Ivygirl wrote: Thu Aug 20, 2020 1:32 pm Money in a traditional IRA is not "fungible" with money in a Roth.
A pre-tax dollar is rarely equivalent to a post-tax dollar, if that's what you're getting at. But any dollar is equivalent to any other dollar, which is what fungibility refers to. Precious stones are not fungible, by comparison.
No, the statement I disagreed with was "Money is fungible." Precious stones are not money, and thus not relevant.

If "a pre-tax dollar is rarely equivalent to a post-tax dollar," then I think you agree with me: money is not always fungible, and buckets are not mere "mental" accounting, they are actual accounting.
Money is fungible in the sense that all dollars are created equal (unlike precious stones, which was merely an illustration of something that lacks fungibility). But pre-tax money is not equivalent to post-tax money. Similarly, dollars in an HSA dollars are not equivalent to dollars in a 401k , which are not equivalent to dollars in a 457, etc.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
000
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Re: Are emergency funds for suckers?

Post by 000 »

I have cash as a part of my asset allocation, although I don't necessarily expect to scale it with total portfolio size.

It is an asset distinct from e.g. bonds, although the financial industry loves to say "cash is trash".

I would much rather have cash available than hoping I will be able to liquidate stocks/bonds in a crisis.
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Re: Are emergency funds for suckers?

Post by kimura king »

if you are a normal guy, keep 20k in a money market as insurance for the family. if you are a normal boglehead (atty/physician/oil engineer) that shops exclusively at Sam's club and has his wife driving a 1999 Ford Contour....then no you don't need an an emergency fund and would be a sucker.
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Re: Are emergency funds for suckers?

Post by brad.clarkston »

kimura king wrote: Thu Aug 20, 2020 11:25 pm if you are a normal guy, keep 20k in a money market as insurance for the family. if you are a normal boglehead (atty/physician/oil engineer) that shops exclusively at Sam's club and has his wife driving a 1999 Ford Contour....then no you don't need an an emergency fund and would be a sucker.
Hey now don't get personal! :) I liked my 90's Contour and was really sad when I wrecked it. My 2007 Camry is nice but ...

EDIT: I'll have you know I spiced this year up and changed over to Costco!
Last edited by brad.clarkston on Thu Aug 20, 2020 11:37 pm, edited 1 time in total.
shess
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Re: Are emergency funds for suckers?

Post by shess »

AlohaJoe wrote: Thu Aug 20, 2020 8:32 pm
UpsetRaptor wrote: Thu Aug 20, 2020 10:19 am This comes up frequently. Here's another similar thread:
viewtopic.php?t=311324

I'm of similar mindset. It doesn't make much sense for a young accumulator in their 20s to stick their first 50-100K of savings into cash to hold forever. I guess that's the super safest thing, but...
I agree that building up the stereotypical "what if you're unemployed for 3-6 months" emergency funds for people in their 20s doesn't make much sense. Building up a 6-month emergency fund can take up your entire 20s for many people, especially once you factor in things like paying off college debt, saving for a down payment on your first house, having children, and contributing to a 401k up to the employer match.

But I think you could also make a case that they do make sense in your 30s or 40s when you it is harder to say "well, I'll just move in with roommates to save money" or "I guess I'll pack up and move to New York to find a new job" when unemployment strikes.
It's dependent on the individual. If you're married with kids in school, you might be more interested in protecting yourself from having to move three states away to live in your parents' basement for 9 months - regardless of whether you're 38 or 28. If you're a landscaper who depends on their vehicle and tools for livelihood, you want to make sure you can fix/replace those regardless of whether you're 25 or 45. If you don't have family and mostly spend your day working and spend your evenings playing econ board games with your friends, you might be fine crashing on someone's couch for a few months, and maybe you don't need a huge emergency fund, whether you're 24 or 42.

It's kind of like other insurance, say life insurance. You don't get life insurance because it will pay out and make your spouse or kids wealthy, you get life insurance to cover the fact that you won't be able to make your current contributions to the household if you die. Which is why selling life insurance on children is horrible.
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Re: Are emergency funds for suckers?

Post by brad.clarkston »

AlohaJoe wrote: Thu Aug 20, 2020 8:32 pm
It's kind of like other insurance, say life insurance. You don't get life insurance because it will pay out and make your spouse or kids wealthy, you get life insurance to cover the fact that you won't be able to make your current contributions to the household if you die. Which is why selling life insurance on children is horrible.
I refuse to up my life insurance anymore. I swear every time I erk the wife I see her calculating dollar signs in her eyes ...
invest4
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Re: Are emergency funds for suckers?

Post by invest4 »

I seem to recall quite a few people extolling the virtue of an emergency fund during the Covid chaos and a number vowing they would increase it beyond their current amount in the future. Everyone has to make their own assessment...but one should also pay attention to the actual experiences of others.

I have a relatively large amount of cash which I have accumulated over the years ($190K). Of course, we are a family of six supported on a single income. I have decided to reduce it a bit so I may take advantage of Mega Backdoor Roth contributions in my 401(k). Nonetheless, I will still maintain a good amount to sustain this 'firewall' in order to absorb a shock such as job loss and /or wave away a significant unexpected expense.
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Re: Are emergency funds for suckers?

Post by kimura king »

brad.clarkston wrote: Thu Aug 20, 2020 11:36 pm
kimura king wrote: Thu Aug 20, 2020 11:25 pm if you are a normal guy, keep 20k in a money market as insurance for the family. if you are a normal boglehead (atty/physician/oil engineer) that shops exclusively at Sam's club and has his wife driving a 1999 Ford Contour....then no you don't need an an emergency fund and would be a sucker.
Hey now don't get personal! :) I liked my 90's Contour and was really sad when I wrecked it. My 2007 Camry is nice but ...

EDIT: I'll have you know I spiced this year up and changed over to Costco!
:sharebeer

good job on the costco upgrade. btw - I'm a kc guy too, at costco/home depot every other saturday like clockwork.
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Stef
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Re: Are emergency funds for suckers?

Post by Stef »

My EF covers 2 monthly expenses, 10k sitting in cash. 35k in tax-deferred and 15k in taxable right now, so not much more I could access. But I have credit cards, could get a loan or use margin in IBKR to get some cash. So I don't see an issue with that.

I mean what could really happen? My job situation couldn't be more stable, I don't have a car nor kids, my dentist is in Bosnia (so very cheap).
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eye.surgeon
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Re: Are emergency funds for suckers?

Post by eye.surgeon »

Nate79 wrote: Thu Aug 20, 2020 11:20 am
Seasonal wrote: Thu Aug 20, 2020 10:05 am
Nate79 wrote: Thu Aug 20, 2020 9:48 am Nope, I think it's the other way around. Suckers don't have emergency funds. But hey, the average American is broke, in debt up to their eyeballs with no savings. The recent economic shock showed that anyone can be effected and need an emergency fund and without significant govt action there would have been a whole lot of people in significant world of hurt.
The median net worth was $97,300 (average was much higher) according to https://www.marketwatch.com/story/whats ... 2018-09-24 Do you have more recent data?

There are a whole lot of people in very precarious condition, but let's not exaggerate too much.
Net worth is a meaningless when it isn't reflected in day to day finances. Here is a past post detailing the pathetic financial pictures of the average American.
viewtopic.php?f=11&t=321611&p=5407696#p5407696


https://www.forbes.com/sites/maggiemcgr ... 10b7294e0d

>60% can't afford a $500-1000 emergency. And >60% dont even have $1000 in a checking or savings in total. 45% have zero savings.

https://www.statista.com/chart/20323/am ... k-savings/

Also about 40% of households have revolving credit card debt. 25% of Americans have student loans and 33% auto loans.

80% of workers live paycheck to paycheck:

https://www.cnbc.com/2019/01/09/shutdow ... check.html

The average person has about $40k in debt excluding mortgage and cant scrape together $600 to pay for an emergency. Living above their means, in debt (consumer, student loans, etc), with no real emergency fund = broke.

https://news.northwesternmutual.com/pla ... gress-2018

https://www.cnbc.com/2018/08/20/how-muc ... y-age.html
These studies are at best misleading and at worst propaganda. Notice how in several they refer to "workers" , as in 80% of "workers" can't afford an emergency. What's a worker? According to the details of the study it's an hourly employee. Hardly representative of the whole population. If you are self employed, own a business, or don't work by the hour, you are not a "worker" and your financial situation is not factored into the study. These types of studies are often agenda driven to influence or promote policies and programs. The term worker itself has become a dog whistle for division politics, like if you are successful you aren't a "worker". Anyone here with a high net work feel like they haven't been working?
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Re: Are emergency funds for suckers?

Post by HomerJ »

atdharris wrote: Thu Aug 20, 2020 9:54 amI suppose if I lost my job, it would be a different story..
Ding. Ding. Ding.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
ChicagoC
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Re: Are emergency funds for suckers?

Post by ChicagoC »

Maybe we should call it an emergency plan rather than an emergency fund. I recall a vanguard article that broke the EF concept into income stressors and expenses stressors. Everyone should have a plan to deal with a prolonged impact to each stressors. How you do it is going to depend on your specific situation, risk tolerance, etc.

For right now, it is ~6 months in cash (driven by income stressors), though beginning to get more comfortable dipping below that.
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Re: Are emergency funds for suckers?

Post by L82GAME »

ChicagoC wrote: Fri Aug 21, 2020 5:58 am Maybe we should call it an emergency plan rather than an emergency fund. I recall a vanguard article that broke the EF concept into income stressors and expenses stressors. Everyone should have a plan to deal with a prolonged impact to each stressors. How you do it is going to depend on your specific situation, risk tolerance, etc.

For right now, it is ~6 months in cash (driven by income stressors), though beginning to get more comfortable dipping below that.
Here’s the link to that VG article: https://personal.vanguard.com/pdf/emergency-savings.pdf
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Re: Are emergency funds for suckers?

Post by OnTrack2020 »

No, I don't believe so. I also think it depends on what stage of life you are in. The OP didn't sound like he was in his 20s just starting out. It sounded like he has had decades to build up his funds, investments, housing, etc. One really must look at the context here because there is a huge difference.

Late last year, my husband was offered a buyout offer. That money essentially became our emergency fund for 2020 and 2021, which we are using to pay monthly bills.

This year was the first time I did a detailed budget and tried to build some additional cash in for emergencies (have always had a rough idea about how much we spent, but never put it on paper). Who would have thought about coronavirus and a lot of items flying off shelves and trying to stock up? Definitely did not budget enough for the rising costs of groceries, paper products, and cleaning products needed. I didn't budget enough for two unexpected root canals/one crown and my husband's tooth breaking off needing a crown (and we have dental insurance). We had major car repairs this year. Even though we put $3k into the budget, we didn't think we would need to use all $3k on the repairs, cracked windshields, new tires, etc. And we still have some more repair work that needs to be done. There was an unexpected surgery and follow-up appointments--even with insurance, not everything is covered. I did budget some extra for medical costs. And one of our adult sons (disabled) lost his job after moving to a larger city. We have been trying to help him with groceries and furnishings for his apartment. We did not budget for this at the beginning of the year, as we weren't sure that he was planning to move, so those become additional, unexpected costs.

So, I would say, no, emergency funds are not for suckers. You just never know what is going to happen from day to day. Even though some of this stuff is minor, all of these minor, unexpected additional costs add up. So, if under budgeted for, can turn into emergencies. I need to go read that article on income stressors.
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Re: Are emergency funds for suckers?

Post by dcabler »

Nothing specifically designated as an emergency fund here. I do keep "working capital" in my checking account but the amount isn't based on needing to fund X months of expenses. It's just for the quick access. Otherwise, we have several credit cards with pretty high limits if a true emergency arises. Beyond that, we can always sell something from out taxable account and have the money available in pretty short order....
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Re: Are emergency funds for suckers?

Post by PicassoSparks »

L82GAME wrote: Fri Aug 21, 2020 6:06 am Here’s the link to that VG article: https://personal.vanguard.com/pdf/emergency-savings.pdf
Thanks for this.
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