Tweet
LivingAlmostLarge,
The money is there because I haven't had the time to park it somewhere else. And also because I was unsure of the stock market prospects.
DisneySteve,
I agree that conventional wisdom states that EF funds are important. However, I am hardpressed to be convinced that I need as large an EF as 20K, or 40K including auto EF. Of course it's a moot point since I already have 4.5 times that amount in cash, but I never viewed 20K/40K of that cash as an EF. It's a psychological thing.
Just to clarify some of the questions you raised earlier.
- The employer provided medical coverage, including vision, dental, and prescription coverage is excellent. At most I might look at a $10 copay, and few times of those copays. I have first hand accounts of a colleague requiring treatment in the hundreds of thousands of dollars and not having to pay anything out of pocket. So I am "covered" when employed for medical emergencies. Between health insurance, sick leave, short term disability, long term disability, and life insurance, medical emergency while employed is a "covered" scenario, and one that does not necessitate an EF in my case (and likely in the case of many others who are similarly employed).
- A plan like this for our healthcare if purchased on our own, will be approximately $750 per month. So we will need to add that to the monthly expenses in the event of a job loss.
- The $38K I mentioned in the event of a job loss are not benefits but money guaranteed to be available. The scenarios you mentioned are unlikely in the case of my employer. So this still provides a cash cushion of 11 months of expenses, including health coverage.
- The only emergency that I can think of when employed will be travel for medical emergencies of friends, relatives, and weddings and funerals. This will cost at most $4000.
- The outlook on my car is fairly positive for the near future (based on my assessment of it's current conditions as well as expert mechanic opinion). But I will still keep say $4K in the EF for this purpose, and seek to build a fund of 20K over the next 3-5 years.
Based on all this, I will keep a 10K EF (instead of the 40K you suggested), and hedge my bets towards nothing bad happening.
Phantoms post only adds to the above thesis.
I will start investigating ways to invest the remaining 80K and report back.
What do folks say?
The money is there because I haven't had the time to park it somewhere else. And also because I was unsure of the stock market prospects.
DisneySteve,
I agree that conventional wisdom states that EF funds are important. However, I am hardpressed to be convinced that I need as large an EF as 20K, or 40K including auto EF. Of course it's a moot point since I already have 4.5 times that amount in cash, but I never viewed 20K/40K of that cash as an EF. It's a psychological thing.
Just to clarify some of the questions you raised earlier.
- The employer provided medical coverage, including vision, dental, and prescription coverage is excellent. At most I might look at a $10 copay, and few times of those copays. I have first hand accounts of a colleague requiring treatment in the hundreds of thousands of dollars and not having to pay anything out of pocket. So I am "covered" when employed for medical emergencies. Between health insurance, sick leave, short term disability, long term disability, and life insurance, medical emergency while employed is a "covered" scenario, and one that does not necessitate an EF in my case (and likely in the case of many others who are similarly employed).
- A plan like this for our healthcare if purchased on our own, will be approximately $750 per month. So we will need to add that to the monthly expenses in the event of a job loss.
- The $38K I mentioned in the event of a job loss are not benefits but money guaranteed to be available. The scenarios you mentioned are unlikely in the case of my employer. So this still provides a cash cushion of 11 months of expenses, including health coverage.
- The only emergency that I can think of when employed will be travel for medical emergencies of friends, relatives, and weddings and funerals. This will cost at most $4000.
- The outlook on my car is fairly positive for the near future (based on my assessment of it's current conditions as well as expert mechanic opinion). But I will still keep say $4K in the EF for this purpose, and seek to build a fund of 20K over the next 3-5 years.
Based on all this, I will keep a 10K EF (instead of the 40K you suggested), and hedge my bets towards nothing bad happening.
Phantoms post only adds to the above thesis.
I will start investigating ways to invest the remaining 80K and report back.
What do folks say?
Comment