Fuzzy Math - Personal Finances In The Frum World

[farmbochur]

"Image not found or was removed"

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[aygart]

+1

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[imayid2]

[imayid2]

Reposted. Should be working, lmk please

[EliJelly]

Reposted. Should be working, lmk please

Yup, working now.

[imayid2]

Lesson learned. Do not delete the photos

[etech0]

Original was missing one image (the one with the gray background about being self sufficient)

[Moshe Green]

...

So true...
My wife has a business where she's basically maxxed out. Why?
Because if she gets any more business she loses the tax back from the IL Government for low income makers. So she basically can either stay put or work double and get only 20-30% more money... Not much of a choice... especially as a full time mother.

[ExGingi]

Of course...

I don't think I need to explain what the purpose is of a emergency fund...
Technically one can invest those funds with the current %4-5 interest, however for me, its the comfort of knowing I have the cash at hand.

When I see or hear questions about putting EF into anything but a cash equivalent, it's an indication that the person asking/commenting doesn't understand the concept. An EF, by definition, must be 100% safe (cannot lose money) and liquid (available at any time to use). If it happens to earn some interest to counter inflation/loss of purchasing power, that's nice. But never expect it to make money, it's all about safety and availability.

[imayid2]

When I see or hear questions about putting EF into anything but a cash equivalent, it's an indication that the person asking/commenting doesn't understand the concept. An EF, by definition, must be 100% safe (cannot lose money) and liquid (available at any time to use). If it happens to earn some interest to counter inflation/loss of purchasing power, that's nice. But never expect it to make money, it's all about safety and availability.

Is it so important to be liquid, if you have a cc?

[yfr bachur]

So true...
My wife has a business where she's basically maxxed out. Why?
Because if she gets any more business she loses the tax back from the IL Government for low income makers. So she basically can either stay put or work double and get only 20-30% more money... Not much of a choice... especially as a full time mother.

Which is why "everyone" in IL is working shvartz.... 

(Poorly constructed tax system...)

[ExGingi]

Is it so important to be liquid, if you have a cc?

Yes!

CC and any credit lines can be shut down. I know someone who had a 400k HELOC shut down when subprime mortgages exploded. He was a prime borrower with plenty of equity. Line was not in use.

[imayid2]

Yes!

CC and any credit lines can be shut down. I know someone who had a 400k HELOC shut down when subprime mortgages exploded. He was a prime borrower with plenty of equity. Line was not in use.

So if it gets shut down you should work on having liquid availability, but until then I don’t see it’s necessity.

[Yo ssi]

But never expect it to make money, it's all about safety and availability.

It's a no brainer to put it in a account which makes money (and is readily available).

Perhaps worth splitting it into a 2 phase EF fund..

[ExGingi]

It's a no brainer to put it in a account which makes money (and is readily available).

Obviously. When there is no risk to principal.

[ExGingi]

So if it gets shut down you should work on having liquid availability, but until then I don’t see it’s necessity.

You have no control on timing and circumstances.  There's a reason why it's called Emergency Fund.

[sguitarist18]

You have no control on timing and circumstances.  There's a reason why it's called Emergency Fund.

And referring to Exgingi's earlier post, at the exact same time that other forms of credit are most at risk may also be the worst time to pull money out of other sources of funding (e.g., when the market is down 40% is not when you want to be pulling money out of your stocks and mutual funds).

[Euclid]

You have no control on timing and circumstances.  There's a reason why it's called Emergency Fund.

(thought it's because you're supposed to invest the money in emerging markets)