General Forums => The O' Club => Topic started by: DaveBB on November 08, 2015, 11:50:44 AM
Title: How to inflation proof your emergency fund?
Post by: DaveBB on November 08, 2015, 11:50:44 AM
What is an effective way to protect one's savings from inflation? I'm only interested in earning enough interest to match the inflation rate. Here's what I've researched and found on my own.
Traditional banks: My bank (Chase) has a horrible interest rate on both their savings accounts and money market accounts. From more in-depth reading, most sources say that this is because traditional banks have a large overhead, and cannot really afford to pay higher interest rates.
Purely online banks: Ally bank, Everest bank, and Mutual of Omaha all offer money market accounts with check writing ability. The interest on these banks have hovered around 1% over the last year. However, they have been has high as 4% in the not too distant past (2009 or so). Low overhead gives them the ability to offer higher rates.
High yield savings accounts: Now these are FDIC insured, and usually require a sizable minimum deposit. However, they appear to top out at around 1% interest. Again, I've only found these with online banks.
Investment Firms (Charles Schwab, Edward Jones etc): I've only given these a cursory look. The interest rates were a bit lower than online institutes but still higher than brick and mortar banks. About .6%.
While money market accounts are not FDIC insured, from my research they are actually a very safe investment vehicle. The SEC has designed them to be that way. Basically one's money is just reinvested in short term bonds and CDs every 30 to 90 days, at a dollar per share. As far as I can tell, since the advent on the money market account, no individual has lost his money. A group of banks did set up a money market account just for use between themselves, and that has been the only one in history to have been dissolved at a loss.
I'm not entirely sure on what the difference between a money market account and a money market fund is. Perhaps it is in name only. I need to do more research on that.
Anyhow, anyone who would like to weigh in on this matter would be appreciated.
Title: Re: How to inflation proof your emergency fund?
Post by: eagl on November 08, 2015, 03:14:30 PM
There is no way to inflation-proof an emergency fund unless you believe any one of a number of goofy schemes that all have some level of risk, hidden or not. By definition an emergency fund shouldn't be subject to risk of short term loss of value, so you can't use any vehicle that could get you more gains in exchange for risk. Without risk there are no gains, generally.
For an emergency fund you pretty much use checking, savings, or money market account and don't expect any gains as an investment. Yes you can shop around to find a bank that offers a half percent more than other banks, but that's not the point. The point is to ensure that every dollar you put in there will be there if/when you need it.
To adjust your emergency fund for inflation you just need to analyze your emergency fund's buying power on occasion. If it falls short of your requirement (3-6 months of living expenses is a reasonable measure of how much you need) then you just add a bit more into it.
You can try to play games with your emergency fund but you will always add risk, which pretty much means you're treating it as an investment or play money, not an emergency fund.
Park 3-6 months cash somewhere you can get at it within minutes, and add a bit every year to account for either inflation or changes in your living expenses. The rest of your savings should go towards paying off all debt and then tax sheltered retirement and then regular investing, all based on how much risk you can accept over whatever timeframe. If you've got a 2 yr old and want to save for his college, you've got 13-15 yrs to deal with that so you could go simple and put it into an S&P500 index fund because over 15 yrs it should gain, based on long-term history of the US financial markets. If you need it in a few years, like building up savings for a new car you know you'll want or need in a few years, maybe try a balanced mutual fund that invests in both stocks and bonds and other stuff that reduces risk but still keeps gains up around maybe 5-7%. That shouldn't lose value over a shorter 3-5 yr timeframe but will get you more than a savings account and likely beat inflation if its a decent balanced fund.
There's just no realistic non-gimmick way to get around the fact that to get gains any higher than bank interest rates, you need to put the money at risk. That is NOT what you want to do for an emergency fund.
Title: Re: How to inflation proof your emergency fund?
Post by: eagl on November 08, 2015, 03:24:41 PM
A money market account is generally your share in a money market fund. The money market account's prospectus or paperwork should explain what that money is doing. I have a money market account that is the transfer/holding account for my investment portfolio, and a few years ago it changed from one money market fund to another. The deal with a money market account is that they are often set up to be used like a checking account, complete with checks and a debit/atm card. You can usually make some number of transfers in or out without any fees, but in my experience they don't usually allow unlimited transactions like a checking account would. I think I get 10 transfers/month free that have nothing to do with investment, and any investment transactions (using the money market account to fund a stock or mutual fund purchase through the same brokerage account) are subject only to the usual brokerage transaction fee and don't count against the 10.
If you invest directly in a money market fund, I'd expect that you would have to pay transaction fees any time you buy or sell shares of that fund. A money market account lets you move money in and out of the brokerage firm's preferred money market fund (within the transaction limits) without any fees.
I know some people who don't have a regular checking or savings account. They just use a money market account from schwab as part of their overall situation with a brokerage account, because schwab offers a lot of account features once you meet a minimum balance and investment amount. I think most investing and brokerage firms offer a similar "free" money market account but the features (like atm/debit card and checks and electronic transfers) will vary depending on what company you invest with and how much you are investing with them.
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 08, 2015, 03:44:11 PM
:rofl
Inflation
:rofl
Title: Re: How to inflation proof your emergency fund?
Post by: DaveBB on November 08, 2015, 03:45:55 PM
Wow, great reply Eagl. Thank you for typing that out. So for a measly 1% interest, it's really not even worth it to transfer my savings account to a money market account. Plus keeping it in my bank keeps it FDIC insured.
So why is there all the hype about money market accounts?
Title: Re: How to inflation proof your emergency fund?
Post by: eagl on November 08, 2015, 03:48:58 PM
Its a useful concept to explain, without delving into conspiracy theories or hardcore economic theory, why the purchasing power of a single unit of currency decreases over time. Maybe you're so rich you don't need to care about such details? Or you're so cynical that you're content with being poor or broke for your entire life, embracing mediocrity just to prove you're not playing the man's game?
Or is that too complicated, and you really just wanted to crap in a thread where someone asked a serious question and got a real answer?
Title: Re: How to inflation proof your emergency fund?
Post by: Wolfala on November 08, 2015, 03:56:25 PM
This might not be the answer you're looking for but what you really need is someone to help you through to create investment goals and not just simply to have cash stashed away. Cash in of itself is absolutely worthless and having it stuffed under your mattress is one step below normal checking account with 0 interest.
The most turnkey solution for you is to make an appointment over at a Charles Schwab branch. For you to have access to the cash the easiest way for that is probably going to be a new load index fund which mirrors the Standard & Poor's 500. That cash whatever the games are on quarterly basis is reinvested. That cash whatever the games are on quarterly basis is reinvested
But in so far as long term planning you need to be looking at Roth IRAs and really learn about compound interest going forward. That is cash which you're not gonna touch for 30 years and you never want to touch it.
Once you have your investment goals laid out you have a quarterly meeting with the investment officer and rebalance the portfolio as needed based on what your risk tolerance is i.e. if you are an aggressive investor or if you need stuff which is more safe.
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 08, 2015, 03:57:41 PM
Get a mortgage and hope for high inflation :old:
The majority of people in the West in 30 year time wont have a pot to piss in so inflation will be meaningless :old:
I spend all my money because the City of London stole my last pension, now the government wants to force another one on me, giving their chums in the city my coin to invest in dog turd countries.
Stop being greedy eagl is crass
Title: Re: How to inflation proof your emergency fund?
Post by: eagl on November 08, 2015, 04:03:19 PM
Wow, great reply Eagl. Thank you for typing that out. So for a measly 1% interest, it's really not even worth it to transfer my savings account to a money market account. Plus keeping it in my bank keeps it FDIC insured.
So why is there all the hype about money market accounts?
1% is better than nothing, so it might be worth it as being more than zero. Back when online banking was new, I moved my entire emergency fund over to ing direct because they were offering somewhere around 3% for a savings account containing over their $25,000 threshold, when my primary bank was offering around 1.5%. When the economy tubed, ing direct took a massive hit and ended up pretty much dissolving their online bank so I moved that money back to my normal bank.
Money market accounts will typically offer a bit better than a savings account and the rate can change continuously, compared to a bank that may adjust its interest rates only quarterly or annually. You're right they're generally just about as safe as a regular bank account, but you have to be careful to look at the accessibility and fees and stuff like that. If you get whacked $10 for every transaction then that will probably wipe out any advantage on interest rates, for example. On the other hand, if you have a money market account that is part of a larger investment brokerage account portfolio, then it may be a safe place to park some money.
I personally have my emergency fund in a fairly low performing savings account because I'm not going to spend a lot of time or effort chasing 0.25% right now. Its in my main bank and I can transfer money in and out electronically a few times per month for free, so it meets my needs. My advice would be to find a convenient account that makes a competitive interest rate and don't destroy the accessibility of your emergency fund or place it at risk just to get an extra quarter or half percent interest rate. Maybe when interest rates rise (eventually they will), it might be worth some time to shop around for a better rate. But right now banks aren't really competing for business on the basis of savings interest rates because there's no wiggle room when the fed is offering essentially free loans to large borrowers. That will change eventually but for now you might want to go towards "more than zero" on the rate, and focus on account features and convenience and a respectable financial institution you don't think will go bankrupt anytime soon.
Schwab is pretty full featured... You can start small and add accounts and features as you add to your portfolio and it can be pretty much a one stop shop. If they don't offer a truly free checking account though (I don't know what their current baseline banking services are), you ought to be able to find that at any number of banks.
Title: Re: How to inflation proof your emergency fund?
Post by: ghi on November 08, 2015, 04:20:37 PM
I remember reading this few weeks ago.... "Approximately 62% of Americans have less than $1,000 in their savings accounts..." http://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06
and this week in USA today; I read this story after Obama suspended debt limit Monday , and.... :bhead I believe something is wrong, absolutely wrong going on, I don't know what... just my feelings; I would not trust gold, cash and paper, it's not value. I would buy few acres of farmland, sustains life , people need food even if the system collapses;
"WASHINGTON — The U.S. national debt shot up $339.1 billion Tuesday — the largest daily increase in the national debt in history, according to Treasury Department data.... "
http://www.usatoday.com/story/news/politics/2015/11/04/national-debt-sets-one-day-record-after-debt-limit-suspension-becomes-law/75173708/ ..this means 1000$ from the poket of every American; ok, apologize i'll shut up, none of my business; ... but doesn't make sense, something is very wrong, this domino wont last long; :bhead
Title: Re: How to inflation proof your emergency fund?
Post by: eagl on November 08, 2015, 04:29:28 PM
Wolfala,
My car needed a brake job and cash was pretty useful for that, so I wouldn't call a cash emergency fund "worthless". It's pretty darn useful when you actually need cash right away.
You're right about needing to come up with a big picture financial approach that meets all of your short and long term needs, but I would strongly argue that before you put a dime into long term investing you need a cash-equivalent emergency fund to pay for life's little surprises (like a new radiator, home plumbing emergency, etc). Once the emergency fund is full then by all means look at a broad investment portfolio with stated and measurable objectives based on sound non-gimmicky financial advice. But the place to start is with an emergency fund so you're not stuck putting what ought to be easily solvable emergencies onto credit cards, or having to cash out retirement investments (taking penalties in the process) to pay for things that should be covered by a cash or cash equivalent emergency fund. I would absolutely NOT put my emergency fund into a stock fund, because overnight you could lose a huge percent of that money if you can't wait out market fluctuations. Emergency cash needs to have an absolutely stable value and be immediately accessible. S&P 500 funds don't come close to meeting any of those requirements.
Money in a mattress isn't safe, but when you need money NOW there are few reasonable substitutes for having cash in a checking or savings account. That's pretty darn useful IMHO. The rest of what you mentioned, going with a balanced portfolio assisted with advice and accounts from Schwab, is awesome for everything in addition to or beyond the emergency fund.
You could have an emergency fund in a schwab money market account because schwab has those accounts that can be treated sort of like a checking account, but again you have to look at fees and accessibility. For an emergency fund, you're not likely to find anything with fewer fees and greater accessibility than a traditional savings or checking account with a checkbook and ATM/debit card. You can do that with schwab but there are usually either fees or a big minimum balance associated with those kinds of account features.
Title: Re: How to inflation proof your emergency fund?
Post by: NatCigg on November 08, 2015, 04:36:23 PM
looking back to 2007 cash was king, nobody had it. so long as the banks do not ice up, :uhoh CD's or short term deposits could make you some money. buying property should always grow value, minus 2007 when nobody had money to buy a house so values dropped over night, with stock value, :noid a lot of money out there, hope "they" dont take the cream off the top again soon. :bolt: blindly dumping money into a pyramid scheme cant go wrong can it? in growth we trust. :bolt: :bolt:
Title: Re: How to inflation proof your emergency fund?
Post by: eagl on November 08, 2015, 04:48:40 PM
ghi I think you're correct that "something isn't right", but for the vast majority of us the most useful approach is to simply follow common-sense rules.
Have an emergency fund. Don't have any debt except maybe a mortgage, and pay that off as quickly as possible. Have a budget so you know EXACTLY where your money goes and so you can pay cash for everything. As part of your budget, put 15% of your income into retirement, preferably ones with tax benefits like roth IRAs, taking max advantage of company matching contributions if offered. Fund out of your budget, in advance, any big expenses you expect to have, and then pay cash. Like cars, kids college, down payment on a house, luxuries like a boat, etc. Carry level fixed rate term life insurance for 10x your salary, as long as there are people depending on your salary. Insurance isn't an investment and it isn't for YOU, its for the people you leave behind and they don't need an investment they need a payout to replace your lost income.
Follow these simple guidelines and even low-income families can have a HUGE amount of money to retire on or pass to their kids as an inheritance. Instead, people get caught up in the moment and buy luxuries on credit, prioritize their cable tv over retirement investments, and point at big picture things that simply don't apply as an excuse why they refuse to save or live within their means. I'm sorry, 17 trillion bucks in national debt has absolutely nothing to do with my decision to buy or not buy a widescreen tv. Justifying buying luxuries or not saving on the federal debt is self deception, using that to justify irresponsible personal behavior. Sorry, if you have a new car loan and a new tv, you have no reason to complain about the federal debt. Instead of blaming the govt stupidity for my own financial decisions, I have 2 6-yr-old cars that were bought with cash and they won't be replaced until I can pay cash. If they die and I need a replacement before I can afford a nice new car, then I'll buy an ok used car instead of following the irresponsible example set by both our government and by other citizens, neighbors and friends, who have become accustomed to spending more than they make while blaming their finances on everyone else.
If the economy crashes, are you going to be better off with or without debts owed to others? When things get tough you can bet those debts will be called in because the lenders will be desperate. Far better off to survive any coming crash if you don't owe anything to anyone, even if your investments lose value in the crash. Having half of your investment value and no debt is a far better situation than having half of zero savings while retaining all the debt...
On insurance... Remember this - When you invest and expect a return on investment higher than a savings account interest rate, you MUST accept some risk. That's how it works, nobody pays you back if you don't risk your money. The purpose of insurance is the exact opposite, to spend a little money transferring risk to someone else. So why would you buy an insurance policy as an investment (whole life for example), when we KNOW that you don't get any real return unless you're the one accepting the risk? Expecting great results from a whole life policy is like pouring half a cup of water into another cup and expecting it to magically increase just because you moved it to another cup. Its far better to pay a mere fraction of the insurance premium for level term insurance to transfer risk to the insurance company *only while you have dependents who need your income*, and use the rest of your investment money in a real investment that will get you a better return in exchange for the risk you are accepting for those investments.
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 09, 2015, 12:30:55 AM
Inflation is based on the increase in cost of a reference basket of goods and services. However, the government from time to time takes expensive items out of the basket and replaces them with cheaper items. For that reason, there are people who believe that the official CPI significantly under-represents inflation.
If you instead use the same basket of goods as in 1990, you get this: (http://www.shadowstats.com/imgs/charts/alt-cpi-home2.gif?hl=ad&t=1444922477)
If you instead use the same basket of goods as in 1980, you get this: (http://www.shadowstats.com/imgs/sgs-cpi.gif?hl=ad&t=1444922477)
So, inflation based on CPI is low. Inflation based on a 1990 basket or 1980 basket is not.
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 09, 2015, 01:03:05 AM
Any time inflation is higher than savings interest rate, savers are getting their savings slowly taken away.
One of the main reasons for the Fed putting interest rates low is to encourage savers not to save and to spend the money instead or to put it elsewhere.
Like Ghi, I, too, feel something isn't right these days.
What isn't right? Interest rates at zero for seven years. Some parts of the world with negative interest rates (which not long ago would have been thought impossible). Stock market Shiller PE at extremely high levels. Historically gargantuan debt in nearly every country. Commodities meltdown. China's bubble bursting. Greek meltdown. Puerto Rico default. A growing mess in Ukraine and Syria. A growing illegal immigration fubar in Europe. Average price of 1-bedroom apartments in Silicon Valley being $3000/month, and shacks selling for $2 million. Governments believing the best way to deal with debt-induced catastrophes is to go twice as far into debt.
It's hard for me to predict what will happen. My best guess is a cataclysm larger than 2008, with a large stock-market crash, followed by Fed flood gates opening wide to try to reinflate again, and eventually a debt implosion. But it is only a guess.
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 09, 2015, 02:59:04 AM
So your saying don't bother saving because it's all going down the toilet?
So I am right then?
Lots of paragraphs says more about the individual than anything else.
How about this Eagl?
I always buy with cash and I am cheap, I will always have a job because I am cheap :rofl
Inflation will never affect my beans on toast.
If I have no money I will be your butler.
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 09, 2015, 12:19:01 PM
So your saying don't bother saving because it's all going down the toilet?
So I am right then?
Lots of paragraphs says more about the individual than anything else.
How about this Eagl?
I always buy with cash and I am cheap, I will always have a job because I am cheap :rofl
Inflation will never affect my beans on toast.
If I have no money I will be your butler.
Same with me Zack,except I will never have another job!
The little monies I have actually work for me instead of the other way around! The only reason this is like that is because I have no debt,none ,zero, and I never use credit to buy anything.
Although if I lived in the US I might carry a mortgage because I understand the interest is a tax deduction,DAMN I wish I had that where I live...... I might have a mansion.... :devil But in the high arctic a simple 2 story igloo will do!
:salute
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 09, 2015, 02:31:32 PM
In the UK your earnings get taxed :old:
When you save the rest of your earnings in a pension and retire to collect it they tax it again :rofl :rofl :rofl :rofl :rofl
You could not make it up :rofl
If your GREEK tax is what normal people pay, EU handouts are the opposite to tax :old:
Whats a emergency fund anyway? Something a financial advisor got paid $500 to tell someone not to sqaunder all their coin on kak.
Title: Re: How to inflation proof your emergency fund?
Post by: pembquist on November 09, 2015, 02:57:07 PM
Its all been said already but in succinct terms I would say that is impossible to protect a small risk free liquid emergency fund from inflation since by definition it has to be cash.
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 09, 2015, 03:10:17 PM
Buy something like a vintage watch :old:
In 20 years someone who has stolen money from someones pension fund will have loads of coin to sqaunder on trinkets :rofl
Title: Re: How to inflation proof your emergency fund?
Post by: Rolex on November 09, 2015, 05:08:31 PM
Liquid savings isn't such a bad thing. The average household cash savings where I am is over $110,000, and that reduces a lot more risk in emergencies than the average $216.41* of savings in the U.S.
As Brooke said, inflation is higher than "reported." When you pay more for a new computer, the government accounting says that you got more value, so there is no price increase.
Inflation statistics are the work of the devil, unlike the collision model, which is easily understood, but just seems like Einstein's theory of special relativity to the Bish.
I've liked cash savings since 2008, but that's just me. I top off the tank instead of worrying too much about inflation. I'm not spending it all at once anyway. It only affects you when you spend it.
Debt can kill you, saving won't harm you.
* Random number for effect, but probably close...
Title: Re: How to inflation proof your emergency fund?
Post by: Gman on November 09, 2015, 10:33:54 PM
Brooke, I think many people feel the same. Many. It's hard to not become depressed when examining how it's all ended up.
Rolex, completely agree with that. You live in Japan IIRC right? I had no idea that the average person there had that much set aside compared to America.
I keep an emergency fund similar to what Eagl suggests, however I also prepare for the possibility that electricity will = no go, which means electronic numbers of an emergency account won't be accessible. So, I keep a large amount of cash on hand. It doesn't even take a world wide meltdown, here in Canada not long ago, ice storms in Quebec shut society down, and they were only a few days from major, major problems. The biggest issue was no electricity, which meant no access to emergency accounts, or any accounts, so folks without stored food/medication/fuel/etc were in serious trouble in some cases. Weather related disasters are the primary reason I have emergency funds/metals/stores, etc. I'm sure people that lived through that, as well as other recent disasters like Katrina would advise anyone that keeping cash on hand isn't a bad thing.
I do agree that trying to protect your emergency fund from inflation is difficult, and just accepting that and adding to it yearly to keep pace as Eagl suggests is about the best one can do. Splitting some (in my case I choose 1/2) of the funds off into cash or even some gold coins isn't a "nut" thing to do any more, if it ever was.
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 10, 2015, 12:25:52 AM
Eagl got anoyed with me for everything i said in this thread and you all agreed with me :old:
I think its because of the Boston tea party :old:
Japan can have savings they have 9 people doing the job of one to keep everyone in a job (This Is a fact)
In the US and UK if it takes 9 people to do a job they employ 3 (This is a fact)
Japan an economic powerhouse my fat bott!
It was subsisdised like Germany to fight the Cold War and stop them both rampaging about when they did not get thier own way.
Eating Raw fish and making watery lager is the basis of mental instability :old:
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 10, 2015, 12:39:34 AM
They have great cartoons.
Title: Re: How to inflation proof your emergency fund?
Post by: BoilerDown on November 10, 2015, 01:10:29 AM
Inflation is so low in recent history I don't know why you'd make it a primary concern. Are you not a resident of the United States?
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 10, 2015, 01:26:06 AM
Commie!
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 10, 2015, 01:47:55 AM
Inflation is so low in recent history I don't know why you'd make it a primary concern. Are you not a resident of the United States?
Cash has lost half its value in 15 years. Consider what these things cost today vs. in 2000:
Big Macs Apartment rents Farmland House prices Sneakers Restaurant meals Groceries Health insurance College tuition
Sadly, salaries for most people are not 2x what they were in 2000.
We've been cheated (but most people don't know it yet). ;)
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 10, 2015, 02:01:07 AM
How dare you I have reported you!
Your a Commie as well as a North Korean spy! Or a Greek spy
Who is the enemy this month or should I say who is not going to invade the US this month?
China does not feel cheated :rofl
My apologies
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 10, 2015, 02:19:09 AM
Hmm. My great grandfather was Greek.
I did a DNA test, and it said I was 1/8th Greek but not a spy. I have blond hair.
The enemy this month is the Pope.
China should feel cheated. We gave them a bunch of paper in exchange for goods. They will find out the real worth of that paper later. But they are making up for it by taking all the gold they can at prices stupidly manipulated lower by banker dunces.
I am a libertarian. The libertarian is the antiparticle to the commie.
Title: Re: How to inflation proof your emergency fund?
Post by: Dark on November 10, 2015, 02:31:52 AM
Interesting thread. Just wondering its not a true savings thing but was wondering if anyone does what I do. Back story. I'm 33 no kids,wife ect. I had a 180k mortgage at 18 (jumped the gun in high-school ). I have about 30k cash but no investment anywhere. House is down to 85k ish. I pay all my bills with my credit card then pay it off every month. Then by the end of year I can get back up to 3500 which I pit towards the house along with my income tax . Plus I get points along with it which I get some pretty cool stuff. I'm not worries about leaving a big inheritance since there's 4 life insurances alrdy on me (2 from work,1 from house ,another kinda like aflak that has a death benefit ) and no other debt at all . would you keep pushing to get mortgage paid off or start an investment. I plan on having the house paid off by 40 if not sooner. Well unless the housing market goes crazy and I sell the house. During the prime my style of house in neighborhood was going 310-330
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 10, 2015, 02:50:38 AM
But you wear boots with Cuban heels :old:
The dress fits you well though :old:
China is not starving at present so paper money is not a problem at the moment
Good bout of high inflation will make paying debts off a breeze :rofl
Eating beans is not affected by inflation
Title: Re: How to inflation proof your emergency fund?
Post by: Rolex on November 10, 2015, 06:19:57 AM
Yep, Zack is right about the 9 people vs. 3 people. But, the purpose of Japanese corporations is to create jobs by making products or services that contribute to society, not to maximize short-term profits for shareholder dividends. Instead of 8 figure top salaries, they hire more people, improve equipment, invest in research, etc.
Those nine people have jobs, houses, cars, holidays, six-figure savings and tax-free pensions. In Blighty, the 6 without jobs are breaking into houses, stealing cars, on holiday in jail or on the dole with no savings, supported by the three with jobs.
Oh, and also... this is your view:
(http://myswingjapan.com/ah/1uglyb.jpg)
This is my view:
(http://myswingjapan.com/ah/1kuroki.jpg)
(And that's a fact!) :) :) :banana:
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 10, 2015, 07:46:16 AM
The above was written by Walt Disney :old:
Contributing to society :rofl :rofl
You actually believe that Kak
Japan and German society is awesome, is it?
They cannot win wars and behave like savages when they don't get their own way
Title: Re: How to inflation proof your emergency fund?
Post by: ghi on November 10, 2015, 10:56:13 AM
Sadly, salaries for most people are not 2x what they were in 2000.
We've been cheated (but most people don't know it yet). ;)
We have credit to make up the difference. ;)
Title: Re: How to inflation proof your emergency fund?
Post by: CptTrips on November 10, 2015, 03:48:42 PM
I hate to sound like a nut, but in addition to your traditional emergency fund, I'd think about keeping 1-5k in actual cash somewhere safe you can get to without a bank's or government's permission.
It was awe inspiring to watch how easily the government could regulate how much of peoples own cash they were "allowed" to get to thru ATM's and Banks in the recent Greek trouble.
Wab
Title: Re: How to inflation proof your emergency fund?
Post by: NatCigg on November 10, 2015, 03:56:03 PM
getting cash from the bank can be difficult in the best of times. i could see it being impossible to gather 200k in the middle of paranoia. :old:
Title: Re: How to inflation proof your emergency fund?
Post by: pipz on November 10, 2015, 04:31:30 PM
Interesting thread. Just wondering its not a true savings thing but was wondering if anyone does what I do. Back story. I'm 33 no kids,wife ect. I had a 180k mortgage at 18 (jumped the gun in high-school ). I have about 30k cash but no investment anywhere. House is down to 85k ish. I pay all my bills with my credit card then pay it off every month. Then by the end of year I can get back up to 3500 which I pit towards the house along with my income tax . Plus I get points along with it which I get some pretty cool stuff. I'm not worries about leaving a big inheritance since there's 4 life insurances alrdy on me (2 from work,1 from house ,another kinda like aflak that has a death benefit ) and no other debt at all . would you keep pushing to get mortgage paid off or start an investment. I plan on having the house paid off by 40 if not sooner. Well unless the housing market goes crazy and I sell the house. During the prime my style of house in neighborhood was going 310-330
Just get married and have a couple kids. It completely solved my uncertainty about what to do with extra income :grin:
Title: Re: How to inflation proof your emergency fund?
Post by: DaveBB on November 10, 2015, 04:45:01 PM
Emergency here refers to my truck breaking down and having to buy a new one, or the chemical plant at which I work going out of business. Emergency, not catastrophe.
Title: Re: How to inflation proof your emergency fund?
Post by: Brooke on November 10, 2015, 05:53:20 PM
I hate to sound like a nut, but in addition to your traditional emergency fund, I'd think about keeping 1-5k in actual cash somewhere safe you can get to without a bank's or government's permission.
I don't mind sounding like a nut. I suggest the same thing.
Title: Re: How to inflation proof your emergency fund?
Post by: Zoney on November 10, 2015, 05:59:37 PM
I hate to sound like a nut, but in addition to your traditional emergency fund, I'd think about keeping 1-5k in actual cash somewhere safe you can get to without a bank's or government's permission.
It was awe inspiring to watch how easily the government could regulate how much of peoples own cash they were "allowed" to get to thru ATM's and Banks in the recent Greek trouble.
Wab
Excessive cash not 'earning' anything IMO. Bullets and cigarettes are worth more than gold and certainly worth more than currency in a true crunch. You should know that. :huh
So did you agree with the Greek Government shutting down what citizens could withdraw "for the greater good" of the country/economy?
If you did, you're truly a socialist pointing in the direction of a communist. Just saying! Than again, you live in a socialist state so it wouldn't surprise me one bit if you agreed with the Greek Gov't.
Title: Re: How to inflation proof your emergency fund?
Post by: CptTrips on November 10, 2015, 09:09:28 PM
If you did, you're truly a socialist pointing in the direction of a communist. Just saying! Than again, you live in a socialist state so it wouldn't surprise me one bit if you agreed with the Greek Gov't.
Texas is a Socialist state now? :huh
No, I didn't agree with it. I meant "awe inspiring" not in a good way. As in, it certainly made an impression on me and reminded me to have some ready cash on hand at all times in case ATM's stop working.
I got plenty of bullets, but cigarettes are a good idea. I'm not into gold.
Wab
Title: Re: How to inflation proof your emergency fund?
Post by: Ripsnort on November 10, 2015, 09:29:56 PM
Sorry Wabbit, I was thinking you lived in a certain large West Coast state, I mixed you up with another. :) Old age settling in!
Title: Re: How to inflation proof your emergency fund?
Post by: guncrasher on November 10, 2015, 11:26:39 PM
Excessive cash not 'earning' anything IMO. Bullets and cigarettes are worth more than gold and certainly worth more than currency in a true crunch. You should know that. :huh
So did you agree with the Greek Government shutting down what citizens could withdraw "for the greater good" of the country/economy?
If you did, you're truly a socialist pointing in the direction of a communist. Just saying! Than again, you live in a socialist state so it wouldn't surprise me one bit if you agreed with the Greek Gov't.
I do. just based on common sense. name one bank that has enough cash on hand to pay back to it's customers in an emergency.
my credit union limit us to 500 bucks a day in cash. but that's because they normally only have 10-20k on hand at any one time. checks are available for as much as you have funds.
semp
Title: Re: How to inflation proof your emergency fund?
Post by: zack1234 on November 11, 2015, 12:08:35 AM
Pips is trying again to undermine a thought provoking thread :old:
Inflation caused by beans annoys the wife, it's law :old:
It's amazing how grown men cannot change a plug.
It's also amazing how grown men cannot come to terms with the basic concept of saving up for things instead of getting in debt.
Mortgages is the only debt you should have (Sub Prime)
Title: Re: How to inflation proof your emergency fund?
Post by: pembquist on November 11, 2015, 01:06:05 PM
Interesting thread. Just wondering its not a true savings thing but was wondering if anyone does what I do. Back story. I'm 33 no kids,wife ect. I had a 180k mortgage at 18 (jumped the gun in high-school ). I have about 30k cash but no investment anywhere. House is down to 85k ish. I pay all my bills with my credit card then pay it off every month. Then by the end of year I can get back up to 3500 which I pit towards the house along with my income tax . Plus I get points along with it which I get some pretty cool stuff. I'm not worries about leaving a big inheritance since there's 4 life insurances alrdy on me (2 from work,1 from house ,another kinda like aflak that has a death benefit ) and no other debt at all . would you keep pushing to get mortgage paid off or start an investment. I plan on having the house paid off by 40 if not sooner. Well unless the housing market goes crazy and I sell the house. During the prime my style of house in neighborhood was going 310-330
You haven't mentioned anything about an IRA. Do you have one? If you don't I would say stop paying early on your mortgage and start one with that money.