An emergency fund is unnecessary for someone who has a net worth that is much higher than their annual living expenses, has enough equity in their personal residence to obtain a secured line of credit and is very disciplined with their spending. A savings account with ING Direct earns a fully taxable interest of 2.4%, but a pre-payment on the mortgage will yield at least 4% in tax-free interest savings, even in today’s low-rate environment.
Bookmark: del.icio.us Digg StumbleUpon
3 responses so far ↓
1 Anonymous // Sep 16, 2005 at 7:56 am
Nice blog. Keep it up.
DO NOT FAIL, give someone you love a alcohol analyzer GIFT today. Who knows when it would come in handy. This alcohol analyzer website is offering a DISCOUNT on alcohol analyzer, selling at bulk price. IMAGINE giving someone you love the opportunity to LIVE because you gave them alcohol analyzer. It is only $19.95!
Drunk Driving Kills! May your loved ones remember you forever!
2 The Dividend Guy // Sep 17, 2005 at 9:52 am
Nice spam in the previous comment. These comments are getting ridiculous.
Garth Turner has been a big proponent of this type of emergency fund plan - use credit lines to help in an emergency. He says invest the money instead of pay down the mortgage, but a similar idea.
Just from a “sleep at night” type of mentality, I want to have some cash in an emergency fund. The kicker to this article is that you still need to have your financial house in very good order for this to work. For many, building and emergency fund is all part of the “financial better-ment” process.
3 Goldwatch // Sep 19, 2005 at 4:59 pm
I could not disagree more. Cash is king. You said yourself, families building up an emergency fund are vulnerable. So when they have it, they won’t be any longer. and if you have cash, the bank can’t cut you off, cause they think you are the David Glonk that stiffed em on a car loan. I am a big fan of cash in hand. cheers
Rick
Leave a Comment