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Posted on 5/16/17 at 10:45 pm to anc
Just the cash (under the mattress) allocation scares me. Would not want to drive away from a hurricane without $1000 cash in my pocket.
For someone worth 7 figures, having 10k or even 30k in cash isn't that big of a deal. The article you referenced skewed the numbers from a 70/30 mix (stock/bonds) to a 60/20/20 mix (stock/bonds/cash), which is much different than having an extra 10 or 20 grand in cash, assuming the 7 figure net worth premise.
For someone worth 7 figures, having 10k or even 30k in cash isn't that big of a deal. The article you referenced skewed the numbers from a 70/30 mix (stock/bonds) to a 60/20/20 mix (stock/bonds/cash), which is much different than having an extra 10 or 20 grand in cash, assuming the 7 figure net worth premise.
Posted on 5/16/17 at 11:47 pm to Ric Flair
quote:
Just the cash (under the mattress) allocation scares me. Would not want to drive away from a hurricane without $1000 cash in my pocket.
I am guessing a lot of these posters have not had the experience of finding that the ATMs are down, their credit cards will not work to make purchases, and their town has been turned into a cash only society in a matter of a few hours.
Posted on 5/17/17 at 1:05 pm to anc
If one has a 7 figure net work and brokerage accounts that are NOT retirement accounts, of course they don't need an emergency fund.
An emergency fund is needed for the average joe, who is struggling with debt and barely has a positive net worth (would be negative outside house and retirement).
To say an emergency fund is "absurd" is just as silly as saying "no one should ever have whole life insurance". No piece of financial advise works for everyone, every time.
The majority of people should NOT have whole life and the majority of people SHOULD have an emergency fund.
An emergency fund is needed for the average joe, who is struggling with debt and barely has a positive net worth (would be negative outside house and retirement).
To say an emergency fund is "absurd" is just as silly as saying "no one should ever have whole life insurance". No piece of financial advise works for everyone, every time.
The majority of people should NOT have whole life and the majority of people SHOULD have an emergency fund.
Posted on 5/17/17 at 5:09 pm to LSUFanHouston
Excellent post. 
Posted on 5/18/17 at 9:48 am to Jag_Warrior
I look at it this way. No average Joe is going to regret having an emergency fund. I don't think you need 6 months of expenses but nothing wrong with having 10k ready to roll when needed.
Posted on 5/18/17 at 12:38 pm to PhiTiger1764
quote:\\
Guy is worth millions, so of course it is pointless.
bingo
quote:\\
Most people can't float $10k on a credit card and pay it all off the next month before paying interest.
bingo
quote:
Most people don't have "several brokerage accounts" where they can just go liquidate assets.
Posted on 5/18/17 at 12:50 pm to LSUFanHouston
quote:
The majority of people should NOT have whole life and the majority of people SHOULD have an emergency fund.
agreed
Posted on 5/20/17 at 9:25 am to baldona
Then why do they say cash is king?
I agree that the banks pay you nothing and lost opportunity costs of using that money affects any growth, but do not rely on credit or investments as an emergency fund.
As crazy as it sounds learn the structure of an overfunded cash value insurance that pays dividends . You can access the cash value and dividends and depending on how old you are you can fund it for just 2-7 years and then stop and it will keep growing without being taxed.
The way it can be structured is the cheapest savings vehicle out there with an insurance attachment as lagniappe.
FYI-
However, you need to have some kind of foundation in case something happens. Utilize it as an emergency/ opportunity fund.
Thst is what I use it for. The best part about it is they give you a guaranteed loan at 4-5%( much better than credit cards) and even when you borrow money from them your cash value continues to compound tax free at a higher pace than your loan payback.
I highly recommend it over using a savings account than a bank ...especially for the long term.
Lastly, not all insurance and insurance companies... and agents for that matter are created equal, but I'm sure you can learn about this over the web, YouTube, etc...
I agree that the banks pay you nothing and lost opportunity costs of using that money affects any growth, but do not rely on credit or investments as an emergency fund.
As crazy as it sounds learn the structure of an overfunded cash value insurance that pays dividends . You can access the cash value and dividends and depending on how old you are you can fund it for just 2-7 years and then stop and it will keep growing without being taxed.
The way it can be structured is the cheapest savings vehicle out there with an insurance attachment as lagniappe.
FYI-
However, you need to have some kind of foundation in case something happens. Utilize it as an emergency/ opportunity fund.
Thst is what I use it for. The best part about it is they give you a guaranteed loan at 4-5%( much better than credit cards) and even when you borrow money from them your cash value continues to compound tax free at a higher pace than your loan payback.
I highly recommend it over using a savings account than a bank ...especially for the long term.
Lastly, not all insurance and insurance companies... and agents for that matter are created equal, but I'm sure you can learn about this over the web, YouTube, etc...
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