100k milestone. Seeking evaluation

[MonkeyMama]

Not only that, but you may not know how much you'll need or when. Let's say you lose your job. You don't know how long you'll be out of work. You don't want to have to keep dipping into your investments, paying commissions each time. And you don't want to cash out more than you need and pay taxes and fees for no reason.

That's why virtually everyone advises keeping some degree of liquid cash reserves. You can argue about 3 months or 6 months or 8 months or a year, but I don't see how anyone can argue against the concept of having an emergency fund.

Good points.

I had to add a couple of things.

Investments - Investments go up and down. How many people relied on their investments for an emergency fund? How did they fair if they were laid off in 2007, 2008, 2009? Sounds like a terrible plan. (Went about as well as the HELOC/credit card emergency plan - all those lines of credit were reduced when the economy tanked).

Cash - likewise - interest rates are rockbottom right now. Around 0%. That is just a temporary problem. Most of the years I have been an adult, I have managed to earn 4% - 6% interest (I am 33). Sure, I am eating 0% - 2% for the last year or two. That is not the norm. I am not going to stop holding FDIC-insured cash, for emergency, just because a couple of a few low interest years.

I think the point is never to put all your eggs in one basket. I've seen a lot of people really screwed financially because they ignored the personal finance fundamental to have some liquid cash saved. They may have been wealthy in stocks and homes, but if you have no liquidity to pay your bills, things can go south real quick.

[jpg7n16]

jpg - Reading the post you cited, why do you assume 3% income growth other than the obvious because people's income grow on average 3% a year over their life?

No hidden reason Just using it as an average that people's incomes may increase over their lifetime.

You can't say well if I make $50k this year, and all these other factors exist, then what percent of $50k should I save for retirement each year? The math has to account for the fact that as your income goes up, so will the dollar amount you save each year if you keep the percentage the same. (ie. 15% of $60k is more than 15% of $50k obv)