Personal monetary reserves
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
The politicians have enforced the central banks to lower the rates and "print" money. This money has to be somewhere. So it may be in your pockets. Even being a millionaire doesnt mean you are "rich"!!! Consider investing money for your retirement, because you may get around 90. Think about some real estate (a city flat or a small home), buying some blue chip shares and gold. Times may change... Most of all live well and help our family and friends and give some charity. :-O
Press F1 for help or google it. Greetings from Germany
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
Jörgen Andersson wrote:
I can buy a new Mercedes tomorrow, in cash,
Wow. :omg:
Jörgen Andersson wrote:
But how much reserves do you have?
Watning: Reserves low. Er... wait. Reserves dry.
Jörgen Andersson wrote:
And how much do you feel is a necessary minimum?
Would depend on the counrty you live in I guess.
Mobile Apps - Sound Meter | Color Analyzer | SMBC | Football Doodles
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The politicians have enforced the central banks to lower the rates and "print" money. This money has to be somewhere. So it may be in your pockets. Even being a millionaire doesnt mean you are "rich"!!! Consider investing money for your retirement, because you may get around 90. Think about some real estate (a city flat or a small home), buying some blue chip shares and gold. Times may change... Most of all live well and help our family and friends and give some charity. :-O
Press F1 for help or google it. Greetings from Germany
KarstenK wrote:
Consider investing money for your retirement, because you may get around 90. Think about some real estate (a city flat or a small home), buying some blue chip shares and gold. Times may change...
The way things are going, I predict if you have too much monetary worth after retirement governments will take most of it away until you don't. A small regular post retirement income is nice, it doesn't have to be anything like a pre-retirement income though. Most of the people I know who saved every last penny whilst they were working have trained themselves so well to do so, they end up dieing with all that money too. Your devisee will enjoy spending your worth for you though. :-)
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
I, too can by a car without credit, but for good reasons I would not buy even a fridge that way... With the pressure on the market I can get a fridge with good prize and excellent payments, so there is no reason to spend reserves or even use cash... I could get a fridge about 3500 NIS in one payment (immediate charge) and can get the same for 3600 NIS in 12 (300/month), and as a fridge is a long time investment I pay it long time. On the other hand, short time investments, like food, entertainment, holidays and so I pay cash (technically I use my card, but for immediate charge and not as credit)...
Skipper: We'll fix it. Alex: Fix it? How you gonna fix this? Skipper: Grit, spit and a whole lotta duct tape.
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
I could not buy a mercedes, but I could pay a new fridge, garage or similar and even survive some months jobless without having to worry much while I search for something new.
M.D.V. ;) If something has a solution... Why do we have to worry about?. If it has no solution... For what reason do we have to worry about? Help me to understand what I'm saying, and I'll explain it better to you Rating helpful answers is nice, but saying thanks can be even nicer.
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
Jörgen Andersson wrote:
I can buy a new Mercedes tomorrow, in cash
Me too. Although when I was working and bringing up a family I rarely had more than one month's salary in the bank. The whole economic model these days is out of control. People (and governments) are encouraged to get into debt merely to own things they really could manage without.
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Jörgen Andersson wrote:
I can buy a new Mercedes tomorrow, in cash,
Wow. :omg:
Jörgen Andersson wrote:
But how much reserves do you have?
Watning: Reserves low. Er... wait. Reserves dry.
Jörgen Andersson wrote:
And how much do you feel is a necessary minimum?
Would depend on the counrty you live in I guess.
Mobile Apps - Sound Meter | Color Analyzer | SMBC | Football Doodles
Abhinav S wrote:
Would depend on the counrty you live in I guess
That's why I mentioned it in fridge and a car repair rather than a number.
Wrong is evil and must be defeated. - Jeff Ello
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
If only things were that simplistic. Having cash lying round to buy a Merc is lazy unproductive money. So could I buy a Merc. Not with cash, but I would have to cash up investments / assets etc. would I buy a fridge or pay for car repairs on credit. No, I like to have some leeway for emergencies. So it's all about a balance of ready cash for emergencies and having the rest invested, and what that is will depend on personal circumstances and where you live.
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
The age old answer - it depends, a lot on if you start you family early or late. Kids are bloody expensive. For most of my life I lived hand to mouth, we had kids early, the credit card WAS my reserve. I imagine this is how most of us live in the early years of our careers and raising a family. Once free of the expense of raising the kids in my 40s I was also coming into my most lucrative earning period of my career so funds became a secondary issue. I don't like Mercedes.
Never underestimate the power of human stupidity RAH
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
Jörgen Andersson wrote:
I can buy a new Mercedes tomorrow, in cash
Yeah, I heard they are shit these days.
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
It's based upon life-style. I'm a minimalist and Mrs. wife is close enough. I've a pension that I could just scrape buy on right now - and when I retire, Social security will, between the two of us, allow some reasonable comfort. We buy small cars and keep them until they're essentially "used up" - not worth keeping. Usually, ten years or more. On the other side, more directly addressing your question, we can get by on what we have saved until that '90' mentioned elsewhere in the tread, without the pensions & Social Security - not accounting for inflation. BUT - that's in no small part due to our life-style; both buying what we needs and reasonably, what we want, and saving the remainder. Almost all of our spending is via Visa/Master Card. All bills paid in full when received. The rule, which I taught my children: don't buy on credit anything you don't have the money for on hand. (Exception would be a primary dwelling).
Those who can't buy anything without increasing their debt. Some, I will say, were pushed into bad circumstances. Mostly, however, it's unregulated self indulgence. I don't feel sympathy for them.
So - a subjective and definitive answer: If you can put enough away to cover your living expenses for as long as necessary (should you become unemployed) - you're there. Living without financial fear. Difficult, in part, because getting there means learning to tell yourself "No", both in the savings, and, if necessary, during the spending.
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"If you are searching for perfection in others, then you seek disappointment. If you are seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010
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I had a discussion a few days ago on the level of debt people in my country have. Way too many people can't even buy a new fridge without using their credits. I understand that I'm on the other side of the scale, as I can buy a new Mercedes tomorrow, in cash, if I would want to. (I don't, it's a waste of good money) But how much reserves do you have? And how much do you feel is a necessary minimum? Personally I feel that, if you're not able to buy a new fridge and pay the garage when your car has broken down, you're on the wrong side of the savings limit.
Wrong is evil and must be defeated. - Jeff Ello
Actually, I buy most items in the U.S. with credit card, but they're paid in full when due. I do this because I receive 1% to 5% cash back. As far as loans, I never expect to take out a loan again. Also, I don't keep a lot of cash on hand, but I don't have many bills. Any extra money, gets sent to the brokerage I use and it eventually gets invested; in fact 3 weeks ago I only had $600 USD in reserves, but all my bills for the month were paid for. So yes, I can drive a new MB by writing a check (in about a week), but I'll stick to buying 1 year old former rental cars and driving them for 7 years until I replace it with another.
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I, too can by a car without credit, but for good reasons I would not buy even a fridge that way... With the pressure on the market I can get a fridge with good prize and excellent payments, so there is no reason to spend reserves or even use cash... I could get a fridge about 3500 NIS in one payment (immediate charge) and can get the same for 3600 NIS in 12 (300/month), and as a fridge is a long time investment I pay it long time. On the other hand, short time investments, like food, entertainment, holidays and so I pay cash (technically I use my card, but for immediate charge and not as credit)...
Skipper: We'll fix it. Alex: Fix it? How you gonna fix this? Skipper: Grit, spit and a whole lotta duct tape.
Kornfeld Eliyahu Peter wrote:
but for good reasons I would not buy even a fridge that way...
Kornfeld Eliyahu Peter wrote:
about 3500 NIS in one payment (immediate charge) and can get the same for 3600 NIS in 12 (300/month)
So you'll pay more for a fridge and you think that is a good thing? :confused:
There are two kinds of people in the world: those who can extrapolate from incomplete data. There are only 10 types of people in the world, those who understand binary and those who don't.
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The age old answer - it depends, a lot on if you start you family early or late. Kids are bloody expensive. For most of my life I lived hand to mouth, we had kids early, the credit card WAS my reserve. I imagine this is how most of us live in the early years of our careers and raising a family. Once free of the expense of raising the kids in my 40s I was also coming into my most lucrative earning period of my career so funds became a secondary issue. I don't like Mercedes.
Never underestimate the power of human stupidity RAH
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Actually, I buy most items in the U.S. with credit card, but they're paid in full when due. I do this because I receive 1% to 5% cash back. As far as loans, I never expect to take out a loan again. Also, I don't keep a lot of cash on hand, but I don't have many bills. Any extra money, gets sent to the brokerage I use and it eventually gets invested; in fact 3 weeks ago I only had $600 USD in reserves, but all my bills for the month were paid for. So yes, I can drive a new MB by writing a check (in about a week), but I'll stick to buying 1 year old former rental cars and driving them for 7 years until I replace it with another.
jgakenhe wrote:
I do this because I receive 1% to 5% cash back.
It is somewhat tempting to do that. However, no wealthy person has ever claimed their wealth came from credit card rewards. :-D And studies have shown that people tend to spend about 18% more when paying with credit card vs. with cash because it hurts to pay with cash, even if you pay off your balance every month. You may not be like that but many are. Just something to think about.
There are two kinds of people in the world: those who can extrapolate from incomplete data. There are only 10 types of people in the world, those who understand binary and those who don't.
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Kornfeld Eliyahu Peter wrote:
but for good reasons I would not buy even a fridge that way...
Kornfeld Eliyahu Peter wrote:
about 3500 NIS in one payment (immediate charge) and can get the same for 3600 NIS in 12 (300/month)
So you'll pay more for a fridge and you think that is a good thing? :confused:
There are two kinds of people in the world: those who can extrapolate from incomplete data. There are only 10 types of people in the world, those who understand binary and those who don't.
In this case - yes. I add a 100 NIS and fold the new fridge into my monthly payments, without touching the reserves... It is definitely a good one... If the difference were higher I probably wouldn't do it, but for $30?
Skipper: We'll fix it. Alex: Fix it? How you gonna fix this? Skipper: Grit, spit and a whole lotta duct tape.
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jgakenhe wrote:
I do this because I receive 1% to 5% cash back.
It is somewhat tempting to do that. However, no wealthy person has ever claimed their wealth came from credit card rewards. :-D And studies have shown that people tend to spend about 18% more when paying with credit card vs. with cash because it hurts to pay with cash, even if you pay off your balance every month. You may not be like that but many are. Just something to think about.
There are two kinds of people in the world: those who can extrapolate from incomplete data. There are only 10 types of people in the world, those who understand binary and those who don't.
RyanDev wrote:
And studies have shown that people tend to spend about 18% more when paying with credit card vs. with cash because it hurts to pay with cash
:confused: Can you provide a link or detailed explanation? :confused:
Whenever you find yourself on the side of the majority, it is time to pause and reflect. ~ Mark Twain
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jgakenhe wrote:
I do this because I receive 1% to 5% cash back.
It is somewhat tempting to do that. However, no wealthy person has ever claimed their wealth came from credit card rewards. :-D And studies have shown that people tend to spend about 18% more when paying with credit card vs. with cash because it hurts to pay with cash, even if you pay off your balance every month. You may not be like that but many are. Just something to think about.
There are two kinds of people in the world: those who can extrapolate from incomplete data. There are only 10 types of people in the world, those who understand binary and those who don't.
RyanDev wrote:
And studies have shown that people tend to spend about 18% more when paying with credit card
Assuming you're not talking about the enormous interest rate - but these studies tend to find what they're looking for. That being said, I agree that people spend more easily when they don't have to actually count out the money. Buying some potato chips, or a 60" HDTV, are equally easy with plastic money. And then, of course, there's the debit card! I won't even own one. As for the 1%-5%? A few hundred $US/year extra is OK for me - because I'm NOT one of those wealthy people to which you refer! It all comes down to whether you consider that plastic specie to be a tool or a license.
"The difference between genius and stupidity is that genius has its limits." - Albert Einstein
"If you are searching for perfection in others, then you seek disappointment. If you are seek perfection in yourself, then you will find failure." - Balboos HaGadol Mar 2010
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RyanDev wrote:
And studies have shown that people tend to spend about 18% more when paying with credit card vs. with cash because it hurts to pay with cash
:confused: Can you provide a link or detailed explanation? :confused:
Whenever you find yourself on the side of the majority, it is time to pause and reflect. ~ Mark Twain
