Comments on: It’s an emergency (fund)! http://monevator.com/2009/09/29/its-an-emergency-fund/ Make more money, invest profitably, retire early Thu, 09 Feb 2012 22:57:41 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Frugal http://monevator.com/2009/09/29/its-an-emergency-fund/comment-page-1/#comment-58554 Frugal Thu, 18 Nov 2010 09:11:45 +0000 http://monevator.com/?p=2675#comment-58554 Hi there. Great site - keep up the good work! I've now built up my emergency cash fund. Now the big question - where do I store it, or shall I allow inflation to eat it up?! I've been trying to buy Barclays Index linked bond but nobody has any information about how I buy it (I even have the ISIN number but cant find it on the market - they only speak to IFAs when I call direct). Please help! Hi there. Great site – keep up the good work!

I’ve now built up my emergency cash fund. Now the big question – where do I store it, or shall I allow inflation to eat it up?!

I’ve been trying to buy Barclays Index linked bond but nobody has any information about how I buy it (I even have the ISIN number but cant find it on the market – they only speak to IFAs when I call direct).

Please help!

]]> By: The Investor http://monevator.com/2009/09/29/its-an-emergency-fund/comment-page-1/#comment-35160 The Investor Fri, 21 May 2010 16:48:35 +0000 http://monevator.com/?p=2675#comment-35160 Well, we'll have to differ. As I said elsewhere, in my view <strong>an emergency fund is exactly what it is</strong> - a cash fund that enables you to cope with unexpected things, entirely separately from your everyday savings aspirations. You may (did! ;) ) on your blog that if you've got $100,000 in the bank you don't need an emergency fund, but that's like saying if you're Meggan Fox you don't need to wear makeup. Not relevant for most people, who must effectively lock up most of their long-term savings in assets such as equities on an uncertain time horizon. If they don't have cash and emergency strikes, they'll have to go into debt. If they do have a tonne of cash like you suggest, then they're going to retire poorer than they need to because of the terrible real returns. As for Lee, I think he found love. ;) Well, we’ll have to differ. As I said elsewhere, in my view an emergency fund is exactly what it is – a cash fund that enables you to cope with unexpected things, entirely separately from your everyday savings aspirations.

You may (did! ;) ) on your blog that if you’ve got $100,000 in the bank you don’t need an emergency fund, but that’s like saying if you’re Meggan Fox you don’t need to wear makeup. Not relevant for most people, who must effectively lock up most of their long-term savings in assets such as equities on an uncertain time horizon.

If they don’t have cash and emergency strikes, they’ll have to go into debt. If they do have a tonne of cash like you suggest, then they’re going to retire poorer than they need to because of the terrible real returns.

As for Lee, I think he found love. ;)

]]> By: Financial Samurai http://monevator.com/2009/09/29/its-an-emergency-fund/comment-page-1/#comment-35156 Financial Samurai Fri, 21 May 2010 16:21:15 +0000 http://monevator.com/?p=2675#comment-35156 Again, everything sounds like an emergency here! Like I said... if you are thinking in "emergency fund" terms... you are scraping the bottom of the barrel and need to do more! Where is Lee BTW? He disappeared! .-= Financial Samurai on: <a href="http://www.financialsamurai.com/2010/05/21/the-emergency-fund-fallacy-budgeting/" rel="nofollow">The Emergency Fund Fallacy</a> =-. Again, everything sounds like an emergency here!

Like I said… if you are thinking in “emergency fund” terms… you are scraping the bottom of the barrel and need to do more!

Where is Lee BTW? He disappeared!
.-= Financial Samurai on: The Emergency Fund Fallacy =-.

]]> By: Linkworthy: Pity, Pandas and a Fist Full of Dollars | Personal Finance Firewall http://monevator.com/2009/09/29/its-an-emergency-fund/comment-page-1/#comment-12601 Linkworthy: Pity, Pandas and a Fist Full of Dollars | Personal Finance Firewall Fri, 16 Oct 2009 19:08:01 +0000 http://monevator.com/?p=2675#comment-12601 [...] The Monivator talks about how in London in the 1990s (similarly to 2007 here in the USA) many people found themselves thrown from normal life to that of living on the streets thus stressing the importance of an emergency fund. [...] [...] The Monivator talks about how in London in the 1990s (similarly to 2007 here in the USA) many people found themselves thrown from normal life to that of living on the streets thus stressing the importance of an emergency fund. [...]

]]> By: The Investor http://monevator.com/2009/09/29/its-an-emergency-fund/comment-page-1/#comment-11550 The Investor Thu, 01 Oct 2009 07:49:15 +0000 http://monevator.com/?p=2675#comment-11550 Yep, using credit is one of those ying/yang things. A lot of people use credit cards for everything. I know women who proudly go on plastic-powered shopping sprees as if it's clever and aspirational to give some faceless corporation a load of extra income on a Saturday morning. Once you've realised (i.e. got furious about!) how you're throwing money away by paying a credit card or loan company just to buy something early - plus exposing yourself to massive extra risk, as you say - then it's easy (and almost always a good thing) to go the other way and avoid it like the plague. I've even avoided debt in my small businesses, which has led to disagreements with - you guessed it - the credit junkies on the team! I haven't paid a single penny in interest on a loan for well over ten years, and only the student loan before that. The above said, I do use credit cards for their other benefits - such as consumer protection and cashback. My main card is set to direct debit payment so there's no risk of any interest. Doing this you basically get a 45 day interest free loan from the supplier, and are rewarded for it. :) If there's any danger at all that you'll fall back into actually taking on debt with a credit card, however, it's safer to cut it up and bin it. Yep, using credit is one of those ying/yang things.

A lot of people use credit cards for everything. I know women who proudly go on plastic-powered shopping sprees as if it’s clever and aspirational to give some faceless corporation a load of extra income on a Saturday morning.

Once you’ve realised (i.e. got furious about!) how you’re throwing money away by paying a credit card or loan company just to buy something early – plus exposing yourself to massive extra risk, as you say – then it’s easy (and almost always a good thing) to go the other way and avoid it like the plague.

I’ve even avoided debt in my small businesses, which has led to disagreements with – you guessed it – the credit junkies on the team! I haven’t paid a single penny in interest on a loan for well over ten years, and only the student loan before that.

The above said, I do use credit cards for their other benefits – such as consumer protection and cashback. My main card is set to direct debit payment so there’s no risk of any interest. Doing this you basically get a 45 day interest free loan from the supplier, and are rewarded for it. :)

If there’s any danger at all that you’ll fall back into actually taking on debt with a credit card, however, it’s safer to cut it up and bin it.

]]> By: Lee http://monevator.com/2009/09/29/its-an-emergency-fund/comment-page-1/#comment-11473 Lee Wed, 30 Sep 2009 06:11:08 +0000 http://monevator.com/?p=2675#comment-11473 All excellent points that pretty much follow precisely my new philosophy. Some PF bloggers (and a lot of the general population) seem to support using fast credit (e.g. credit cards) as the emergency fund which is all well and good - until the emergency is redundancy. Then what do you do? All excellent points that pretty much follow precisely my new philosophy. Some PF bloggers (and a lot of the general population) seem to support using fast credit (e.g. credit cards) as the emergency fund which is all well and good – until the emergency is redundancy. Then what do you do?

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