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Another thing I noticed about Suze's advice is that it's sometimes contradictory and inconsistent. For example, one time she said that an emergency fund should include amounts for spending on nonessential items. Then later on, she said that it should only be for essential items.
The most contradictory of all is her advice on the Roth IRA. She praises the Roth IRA big-time because of the ability to withdraw money at anytime, tax free. However, she tells her audience to NEVER ever withdraw from a retirement account under any circumstances. What the heck??
So why do you bother listening to her... for MONTHS on end?
I mean, I really like her as a TV personality and her show is entertaining and interesting to watch. But as far as the substance of her financial advice, it's highly questionable and doesn't really apply to everybody.
Another thing I noticed about Suze's advice is that it's sometimes contradictory and inconsistent. For example, one time she said that an emergency fund should include amounts for spending on nonessential items. Then later on, she said that it should only be for essential items.
The most contradictory of all is her advice on the Roth IRA. She praises the Roth IRA big-time because of the ability to withdraw money at anytime, tax free. However, she tells her audience to NEVER ever withdraw from a retirement account under any circumstances. What the heck??
every write in i did to her challenging some of her points goes unanswered.
So why do you bother listening to her... for MONTHS on end?
i dvr it and watch can i afford it and then off it goes.
roths are not always the best way , not everyone needs to retire at 66 and the 401k loans are double txed is just not true, i really did not expect to get my objections answered.
I still think her advice on having an 8-month emergency fund is too extreme and she thinks it applies to everyone. Personally, for my situation, I think a 3-month emergency fund is sufficient. My monthly expenses are about $2,700, so an $8,000 cash emergency fund should be sufficient, for the following reasons:
If I lose my job, I am likely to be able to collect unemployment insurance, which would account for 75% of my expenses. And it lasts for a very long time.
If I lose my job, it's possible that I could receive a nice severance package. Happened to me before and worked very well.
I have a $3,000 credit card line.
I have $17,000 invested in stocks, which can easily be sold for cash online.
I have $20,000 in a Roth IRA which can be withdrawn at anytime, free of taxes and penalties.
I'm a renter, not a homeowner, and don't need to be concerned with home maintenance.
My parents are real estate millionnaires and have repeatedly offered me to help me financially in the event of an emergency (even though I never asked or took their offer).
I have no debt obligations whatsoever (no car payment, no credit card debt, no student loans, etc.).
I have a master's degree in accounting and have ALWAYS been able to find a job within 2-3 months with no problem, since it's a high-demand profession.
So, given my circumstances, would you agree that a 3-month cash emergency fund is sufficient? 8 months seems excessive.
It's impossible to have a one-size fits all advice. But in general better to have 8 months instead of 3 months for most people. Here in Tampa there are posters on CDF who are constantly posting about their job searches not going so well. Anyone that has watched the news can see that even the most qualified people can be unemployed for year(s) even with the best efforts to find a job.
I still think her advice on having an 8-month emergency fund is too extreme and she thinks it applies to everyone. Personally, for my situation, I think a 3-month emergency fund is sufficient, for the following reasons:
If I lose my job, I am likely to be able to collect unemployment insurance, which would account for 75% of my expenses. And it lasts for a very long time.
If I lose my job, it's possible that I could receive a nice severance package. Happened to me before and worked very well.
I have a $3,000 credit card line.
I have $17,000 invested in stocks, which can easily be sold for cash online.
I have $20,000 in a Roth IRA which can be withdrawn at anytime, free of taxes and penalties.
I'm a renter, not a homeowner, and don't need to be concerned with home maintenance.
My parents are real estate millionnaires and have repeatedly offered me to help me financially in the event of an emergency (even though I never asked or took their offer).
I have no debt obligations whatsoever (no car payment, no credit card debt, no student loans, etc.).
I have a master's degree in accounting and have ALWAYS been able to find a job within 2-3 months with no problem, since it's a high-demand profession.
So, given my circumstances, would you agree that a 3-month cash emergency fund is sufficient? 8 months seems excessive.
You are doing EXACTLY what you claim to hate about Suze's advice... insisting that one scenario is for all.
Given your circumstances... do what you are comfortable with. We all don't have millionaire parents who will bail us out.... your plan relies on them and on CC debt.
Three months is NOT sufficient for me. I do not want to sell stocks, nor will I rely on others or want to rack up CC debt.
(As I stated earlier, we have 12 months and are very happy with our choice.)
The most contradictory of all is her advice on the Roth IRA. She praises the Roth IRA big-time because of the ability to withdraw money at anytime, tax free. However, she tells her audience to NEVER ever withdraw from a retirement account under any circumstances. What the heck??
I think you misconstrued her advice. She doesn't want people tapping into their ROTH unless some sort of catastrophic life event occurs. Tapping into the ROTH can be costly/expensive.
You pay a penalty for early withdrawals of the ROTH unless there's circumstances such as Occur because of the IRA owner's disability. (This can be a very narrow definition, so if you get a severe paper cut, don't consider a Roth IRA distribution for a disability until you review IRS Code Section 72(m)(7) and IRS Publication 590.)
Occur because of the IRA owner's death.
Are a series of "substantially equal periodic payments" made over the life expectancy of the IRA owner.
Are used to pay for unreimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI).
Are used to pay medical insurance premiums after the IRA owner has received unemployment compensation for more than 12 weeks.
Are used to pay the costs of a first-time home purchase (subject to a lifetime limit of $10,000).
Are used to pay for the qualified expenses of higher education for the IRA owner and/or eligible family members.
Are used to pay back taxes because of an Internal Revenue Service levy placed against the IRA.
(Roth IRA early withdrawals and penalties - Fool.com)
Last edited by BucFan; 10-17-2013 at 08:16 AM..
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