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I have 400k on my heloc, to me that is pretty safe. The stock market is at all time high, it will correct anytime now.. I rather use any extra cash to pay off my heloc asap.
You can't come up with any scenario where your cash flow might be interrupted?
Maybe im the only one that thinks the concept of an emergency fund is pointless. Let's say I go along with such a premise and assume I have a family with $5,000 in monthly expenses. I do what everyone tells me I should do and have a 6 month liquid 'Emergency fund'. This so called fund sitting around earning me less than 1% will cost me $30,000 in lost capital appreciation over 10 years. And 200k over 30 years.
So what do I do? My emergency fund is my credit card; it's even more liquid than a savings account. I can use it to buy anything with a 30-45 day interest free period. If I need cash I'll take it out of my LOC or cash advance off the CC for 1% fee. Worst case scenario I may have to sell some of my stock to pay the emergency. In any case I'm always way ahead instead of having money sitting around pointlessly not earning market rates in a savings account.
In today's world you don't have much of a need for liquid cash in an emergency unless you're talking about a total market crash or zombie apocalypse. In both cases cash isn't worth anything anyways. Most people's idea of an emergency is a big medical expense, car maintenance, or job loss. My plan covers all of those scenarios so I'm covered.
Most will say I'm dumb, young, nieve, and stupid. But hey I'll take my market return and you can keep your emergency funds.
An EF is a security blanket...not much else. Also some people can get in trouble relying on a CC for emergencies. They think everything is an emergency and when you have 3 emergencies in 3 months...you end up with CC debt and 10% interest. Then you lose your job...big trouble.
I would rather have a little pile of cash to avoid getting in debt.
I personally dont love the idea of a 6-9 month EF. I think 3-4 months is fine but it depends on the volatility of your job/industry. A salesperson on commission should have a bigger fund to deal with the ups and downs.
An EF is a security blanket...not much else. Also some people can get in trouble relying on a CC for emergencies. They think everything is an emergency and when you have 3 emergencies in 3 months...you end up with CC debt and 10% interest. Then you lose your job...big trouble.
I would rather have a little pile of cash to avoid getting in debt.
I personally dont love the idea of a 6-9 month EF. I think 3-4 months is fine but it depends on the volatility of your job/industry. A salesperson on commission should have a bigger fund to deal with the ups and downs.
This exactly a 6-12 months is overkill IMO but it's variable
I have 400k on my heloc, to me that is pretty safe. The stock market is at all time high, it will correct anytime now.. I rather use any extra cash to pay off my heloc asap.
I hope you are aware the the bank can close or freeze your HELOC on a moment's notice, right?
you don't have to lose a parent to inherit money. It could be a 90 year old grandma you never met
Ok, but to be jealous of "all" the people that inherited such sums?
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