Fuzzy Math - Personal Finances In The Frum World

[farmbochur]

"Image not found or was removed"

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[aygart]

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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)

[stooges44]

Yael Ishakis, a Vice President of FM Home Loans based in Teaneck, recounted a distressing incident involving a mortgage, which we have detailed below.

This unfortunate situation highlights a serious problem that may have stemmed from a significant disruption to the homeowners’ income or business. Sadly, this is an issue that frequently affects frum communities.

“I did a loan for someone last year buying a $1.5M home. Now there’s a an appeal going out to help them pay their electric bill. That’s tragic. I almost had a heart attack when I saw the GoFundMe.

People think they need to live in a certain area at all costs. And they blow up their financial lives with something way about their means. They should have settled on a $700k home.

Why do people do this to their families?

Do you know that your family would be far happier in a more cramped house out of the hottest part of town – and have parents who are relaxed and not financially stressed?

People need to live more conservatively. This trend needs to reverse itself now.

Who’s going to lead the charge?”

https://5townscentral.com/2024/05/20/frum-mortgage-vp-shares-unfortunate-loan-story-warns-potential-buyers/

[Euclid]

Yael Ishakis, a Vice President of FM Home Loans based in Teaneck, recounted a distressing incident involving a mortgage, which we have detailed below.

Where do I start with this...

1) Take anything posted on LinkedIn with a massive pile of salt. Just look at her page, it's all the same self-aggrandizing BS that the rest of frum LinkedIn writes. Who the heck knows if this story even happened?

2) Even if it did happen, this is a complete self own. She was more than happy to take this couple's fees without a second thought when doing their mortgage, and now she gets all preachy? Get off your high horse.

3) There's absolutely nothing to this story that requires her input. Anyone can go lookup what a house sold for, and what the mortgage is; it's public record. Just keep your mouth shut and realize that your facilitation and bias is just as much part of the problem. The chutzpah and lack of self awareness she has to post the following just a couple days later, is just so absurd. "Just buy this house that's a bit out of your budget, because it's an InVeStMeNt."

When a couple is sitting across from me applying for a mortgage -

They’re thinking “how do we get our family into this home?”.

But I’m thinking “how does this purchase lead to this family’s financial well-being and wealth down the road?”

That’s really what you’re doing.

You’re only seeing what’s right in front of you.

But I can’t tell you how many of my clients come back after selling their homes - which appreciated - and are in a place to afford so much more the second time around.

Because they invested in a piece of real estate.

So what’s the best way to build wealth and take care of your family?

Real estate.

And that’s what you’re doing when you’re purchasing your next home.

Honestly, this is why it gives me so much satisfaction.

Not only because they have a place to live.

Because it’s taking care of their future.

Think about that.

Long story short: Burn frum LinkedIn down to the ground.