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re: How much of an emergency fund do I really need?
Posted on 3/4/15 at 1:58 pm to Tigerfan56
Posted on 3/4/15 at 1:58 pm to Tigerfan56
Why don't you throw some money your parents way and stop being such a mooch.
1
Posted on 3/4/15 at 2:07 pm to Eric Nies Grind Time
Or gambling money away on stupid bets like he alluded to on the MSB. at least do some even money or 2 to 1 bets. Lol
Posted on 3/4/15 at 2:56 pm to Fat Bastard
And he just updated his MSB post that the bet has been placed. The mooch should have given it to his parents.
Posted on 3/4/15 at 3:07 pm to hbuc88
quote:
The mooch should have given it to his parents
Don't understand calling him a mooch just because he lives with his parents. They could just be good parents and let him live there for free so he can jumpstart his life.
Posted on 3/4/15 at 3:15 pm to tigerbaittrick
so what you're saying is that you live with your parents? 
Posted on 3/4/15 at 3:19 pm to tigerbaittrick
I'm not criticizing his parents. If he is to get a jump start by staying with them rent free then he shouldn't be pissing away $1K on a ridiculous bet.
Posted on 3/4/15 at 4:21 pm to hbuc88
1. Definitely contribute to your 401k. Its hard to get at the money, so it makes raiding it harder. and starting early helps your money grow.
2. You can use your roth as emergency savings. You can withdraw your cash without penalty assuming you don't touch gains.
3. I think its worthwhile to have a month or two of expenses in cash. Yeah, you don't earn interest (or much) but its better to tap that than get into the habit of digging into savings.
In your situation, I would (in this order)
a) Get $1000 in cash in a savings account, maybe $2k
b) Max out your roth each year
c) Max out your 401k
D) start a brokerage account on the side
2. You can use your roth as emergency savings. You can withdraw your cash without penalty assuming you don't touch gains.
3. I think its worthwhile to have a month or two of expenses in cash. Yeah, you don't earn interest (or much) but its better to tap that than get into the habit of digging into savings.
In your situation, I would (in this order)
a) Get $1000 in cash in a savings account, maybe $2k
b) Max out your roth each year
c) Max out your 401k
D) start a brokerage account on the side
Posted on 3/4/15 at 4:45 pm to Hawkeye95
Seriously, I have to agree. If you can afford to gamble, you can afford to pay your momma some rent money. Otherwise, you are indeed just a post-adolescent mooch who refuses to grow up.
Posted on 3/4/15 at 4:59 pm to Fat Bastard
quote:
10k is what I use. Depends on your expenses and for how long you expect emergency to last.
If I need more I use Roth IRA.
if I need more I use heloc.
If I need more I can dip into my reserves for vacancies and maintenance on my RE.
I like different levels of protection.
AND So on and so forth.
This is my current goal
Posted on 3/4/15 at 5:24 pm to Tigerfan56
An emergency fund has multiple benefits. Its a good cushion, but it also gives you the opportunity to get higher deductible insurance plans in medical, vehicle, homeowners, etc. You can basically be self insured to an extent. So you can pay lower premiums and invest the difference and so on. Put 6 months of expenses in liquid savings and then forget about it until you need it.
Posted on 3/4/15 at 5:27 pm to hbuc88
quote:
then he shouldn't be pissing away $1K on a ridiculous bet.
have an upvote buddy!
Posted on 3/4/15 at 5:33 pm to Delacroix
quote:
quote:
10k is what I use. Depends on your expenses and for how long you expect emergency to last.
If I need more I use Roth IRA.
if I need more I use heloc.
If I need more I can dip into my reserves for vacancies and maintenance on my RE.
I like different levels of protection.
AND So on and so forth.
This is my current goal
awesome! you will do it,just stay the course. I like having lots of redundancy. plenty safety nets. Having that in place allows me to be more aggressive in my other business dealings.
Posted on 3/4/15 at 6:34 pm to Hawkeye95
quote:
In your situation, I would (in this order)
a) Get $1000 in cash in a savings account, maybe $2k
b) Max out your roth each year
c) Max out your 401k
D) start a brokerage account on the side
Slight thread hi-jack, but I enjoy reading your posts on this board so I wanted to get your input. I understand contributing to a 401k before starting brokerage account. But why max it? I mean it's great if you can do it, but for many people (like myself) in their 20's, putting $18k in a 401k isn't a realistic possibility, especially after maxing the Roth.
What if you need to make a big purchase? Wouldn't it be better to have the ability to liquidate assets held in a brokerage account for a good down payment rather than having all that money tied up in a 401k?
This post was edited on 3/4/15 at 6:42 pm
Posted on 3/4/15 at 6:49 pm to PhiTiger1764
quote:
What if you need to make a big purchase? Wouldn't it be better to have the ability to liquidate assets held in a brokerage account for a good down payment rather than having all that money tied up in a 401k?
Sure, but you can do that on your roth if need be. What is nice about the 401k is its a lot more painful to raid than your roth. So you have a disincentive from raiding it.
If you know you are going to buy a house or a car soon, then yeah, a brokerage account might be a better bet.
Posted on 3/4/15 at 7:22 pm to Tigerfan56
For me, I keep 6 months of expenses in a money market account.
That's just me though, I'm kinda old school.
That's just me though, I'm kinda old school.
This post was edited on 3/4/15 at 7:24 pm
Posted on 3/4/15 at 7:41 pm to oR33Do
Nothing wrong at all with that. Mine is in a money market fund.
Posted on 3/4/15 at 8:14 pm to Volvagia
quote:
As I understand it, the difference is in taxable events that occur after the initial contribution, not the initial one.
You'll see the difference 10-20 years down the road more than you will in the short term.
It doesn't get an initial head start because it is taxed on the back end.
10000 Gross taxed account at 25%
10000 taxed to 7500, grows annually for 10 years at 8% to 16,191
10000 tax deferred grows to 21,589, taxed at 25% to 16,191
There are big benefits to a 401k, but the idea that taxable investments have to play catchup to the pretax investments isn't one.
You just described the difference between a before tax (401k) and after tax (roth IRA). Investments made in a regular brokerage account with after tax dollars are taxed AGAIN via capital gains.
Posted on 3/4/15 at 11:23 pm to dragginass
*facepalm*
Did no one read the actual posts involved?
Yes, the math is very similar to Roth vs traditional comparisons, but that is only because both a Roth and a taxable account are funded with after tax dollars.
For a third time, I was only trying to disprove the notion that a taxable account needs to play catch up on day one because of taxes. The day one value of the two funds are the same, even though they have different amounts of money. The difference emerges with taxable events over the years. I never claimed that a 401k tax shield didn't have a benefit.
Did no one read the actual posts involved?
Yes, the math is very similar to Roth vs traditional comparisons, but that is only because both a Roth and a taxable account are funded with after tax dollars.
For a third time, I was only trying to disprove the notion that a taxable account needs to play catch up on day one because of taxes. The day one value of the two funds are the same, even though they have different amounts of money. The difference emerges with taxable events over the years. I never claimed that a 401k tax shield didn't have a benefit.
Posted on 3/4/15 at 11:48 pm to Volvagia
I don't think you're talking about the same thing. Retirement accounts are essentially taxed once, on either the front or back end.
An investment in stocks/brokerage account outside of those vehicles is taxed twice. Once when you bring the money home (income taxes) and again on the gains (capital gains). So yes, there is a huge difference.
An investment in stocks/brokerage account outside of those vehicles is taxed twice. Once when you bring the money home (income taxes) and again on the gains (capital gains). So yes, there is a huge difference.
Posted on 3/5/15 at 12:09 am to Volvagia
quote:
For a third time, I was only trying to disprove the notion that a taxable account needs to play catch up on day one because of taxes.
Not to stress you out anymore, but your example didn't prove anything.
In your attempt to simplify the topic, you made some pretty faulty assumptions. Everything was fine and dandy until you taxed the 401k @ 25% upon withdrawal...
/thread hijack
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