If you have investments, let’s treat those as liquid cash for the sake of argument. Otherwise, the assumption is that you’re not selling property or possessions, but continuing to live as you do now.
3 months
About a year.
About a month should be covered
Right now, until next month’s mortgage payment comes due. Every time I get something in the emergency fund either an emergency happens or a maintenance that will be an emergency if ignored. Just ordered a new set of car tires about an hour ago, as it happens.
I just ran the numbers for the first time ever, and it adds up to 34 months - which I realize is a pretty privileged place to be. However, I’m by no means rich; I just live well below my means and invest all my savings.
Dude, you are rich.
He’s rich in spirit.
In reality, he’s about seven orders of magnitude from rich, and your perspective needs a good tinkering.
Depends on who I compare myself to and how one defines “rich.” To me, it means someone whose passive income exceeds their spending - and I’m nowhere even close to that… yet.
Yeah I think that’s where the distinction between rich and wealthy comes in. You still have to work for a living and are closer to homelessness than renting out Venice for a wedding (for instance).
This exact question from this thread is how rich are you and 34 months is quite wealthy.
It’s an important distinction where I’m a potential counter example. I admit it. I earn what ought to be a comfortable living but poor choices in the past (and probably still) mean that I’m only a couple months from financial disaster. And since it would affect my kids education and my old age, the affects would be major. I am clearly not wealthy, mostly due to my own choices
Nearly everybody who speaks English is rich. We just have no clue who poor other parts of the world are and so think of ourselves as poor.
I’m in my mid 40’s.
It’s not particularly uncommon for people in regional Australia to own their own house with no mortgage by my age.
It’s pretty tough to find a family home that costs less than 10x average wage.
So, as a kind of line in the sand I’d say maybe a third of 45 year olds living in regional Australia could “survive” for 10 years with no income.
How do you know how to invest? Asking for a friend.
I don’t. I do it the boring way - buying cheap, highly diversified ETF index funds.
That’s way more than most people know… Also, wtf is an ETF?
- Open a Vanguard account.
- Buy as much of the thing called VOO as you can each month.
- Come back at retirement age to oodles of money.
Mutual funds and ETFs are both types of investments that represent a group of individual stocks and are generally managed in some way, either by a person or by a fixed algorithm. Mutual funds have some tax implications that can by annoying for people so ETFs tend to be preferred for taxable accounts (in the US at least).
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Thanks! Yes, I was wondering where would be a good place to start for absolute noobs, thanks for the tip. Investing is a mystery in my life I’ve been conditioned not to try to understand, perhaps it’s time to do something about it.
It’s not too bad. The key thing if your in the UK is to open a stocks and shares ISA (similar to a cash ISA, but for stocks) that means you don’t have to worry about taxes.
Other than that… Be aware that things are very volatile due to trump. He can say something and stocks drop 10% then recover by the end of the month… Or not.
If you are in for the long term, the worst thing you can do is panic and sell when that happens.
Its pretty easy if you go with something like wealthfront, betterment, etc…
But using something like fidelity is also good too.
Buy into a broad market tracking ETF (something that tracks s&P 500 or 1000 or similar). That way you’re not betting on individual companies, your betting on the collective largest companies in the world doing well. Over a long period of time, which for over a century has averaged ~7% inflation adjusted return yearly.
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I’m still recovering from the mistakes I made 8 years ago, for another 3 years maximum, so no savings,
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What do you do about housing/rent?
Cash only, about 6 months. Selling assets, 20 years.
13 years ago I had to walk 2 hours after work to get home because I didn’t have a pounds to rent a bike (it was a bank holiday and salary was delayed for a day). My family helped me expanding my education and since things skyrocketed.
The rest of this month.
A couple months, but
Basically I’ve been saving up for years to redo a leaky moldy bathroom. That wouldn’t get done. Maybe ever
I’ve saved what I could to pay for my kids college. I could ruin their entire future to stay alive
I’m coming up in retirement age with way too little savings. I’ve finally able to put aside enough to catch up a little bit I guess that would go pretty quickly too
If im lucky its about 2 months.
Without cutting back at all, even my frivolous spending and holidays, about six months.
If i cut holidays and frivolous stuff, about twelve months.
If i cut back essentials, sold some stuff, eighteen to twenty four months. If on top i downsized the house, probably five years.
If i could make it to seven years then my private pension would kick in and I can retire. If the government hasn’t already moved the age you can draw a private pension i could be retired already.
Many years technically, but I doubt the stability of… well, everything, too much to say that with much conviction.
I don’t use my car much anymore, so would consider that liquid, and could make the kids pay some rent now they are working (not much), if I sold that and nothing in the house needed repaired or maintained (ha ha ha) I am at almost 3 years. So I guess if I had some fatal illness and was willing to run out all of both my &my husband’s retirement money I could stop working. Well, no, nevermind, I couldn’t, because the medical care would bankrupt us. But we would not immediately starve anymore. It only took half a century to get here!
