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Old 04-29-2014, 03:56 PM   #21
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Being "prepared for an emergency" has a huge financial cost. For example maintaining $25,000 strictly for emergencies will forego the investment gains over time. In 10 years the 25k would grow to $50k, in 20 years $100k, in 30 years $200k, etc
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Old 04-29-2014, 04:19 PM   #22
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Originally Posted by RetireAge50 View Post
Being "prepared for an emergency" has a huge financial cost. For example maintaining $25,000 strictly for emergencies will forego the investment gains over time. In 10 years the 25k would grow to $50k, in 20 years $100k, in 30 years $200k, etc

Not being prepared can also have a significant cost. Your numbers are optimistic. Having to sell in a down market and potentially pay taxes and penalties if funds are in a tax deferred account can take a toll too.
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Old 04-29-2014, 07:53 PM   #23
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Not being prepared can also have a significant cost. Your numbers are optimistic. Having to sell in a down market and potentially pay taxes and penalties if funds are in a tax deferred account can take a toll too.
Well first of all no one is suggesting putting the funds into tax deferred. You can't just stick $20k or 40K into one.

Ok imagine your son owes 50K to loan sharks or kidnappers, has to be pay by the end of the week, or his pretty wife will be in the hospital, or child is dead.

What is the difference between having 50K in money market at Vanguard
or 10K at Vanguard money market 30K in total stock market, 10K in total bond market?
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