January 11, 2017


Along with changing your oil every 3,000 miles and checking your child’s trick-or-treat bag for weaponized apples, the common advice to create an emergency fund is overly prudent. All you need is an objective understanding of risk to realize that there are far better places to put your money than an inert account that can’t enrich you. The most recognizable personal finance mavens are almost unanimous in their advocacy of the emergency fund as a vital part of any common-sense financial plan. (See Why You Absolutely Need an Emergency Fund.) Their recommendations differ only on size – three months’, six months’, perhaps eight months’ worth of living expenses are enough to accommodate whatever misfortune might befall you. But to what end? And do people really listen, or are these just empty dicta written to take up space? The conservative recommendation would be set aside eight months’ worth of living expenses, and assuming an effective tax rate of 20%, and this amount is roughly $30,000. Even at three months’ worth of living expenses the total is $11,000. The author advocates clearing debt away before you begin focusing heavily on creating an emergency fund, because the interest you currently play on your debts could quickly fill your emergency fund. Well, what if you do? There’s this thing called unemployment insurance. Your employers pay into it and it’s for your benefit. We also have a workforce in which (overall, if not in every individual case) 95% of those who want jobs have them. Chronic unemployment, or underemployment, is not the province of that class of people who have the wherewithal to defer spending long enough to save up several months’ of living expenses. An emergency fund is meant to help you handle life, so it’s important to take the time to build it. If you’re interested in my process, then I will be glad to share it with you.


Warren Buffett has always done pretty well as an investor. But even for him, 2016 was an exceptional year. Shares of Berkshire Hathaway went up about 20 percent in value, increasing Buffett’s personal fortune by about $12 billion, according to personal finance site GOBankingRates. He earned more last year than any other American, easily beating out fracking king Harold Hamm, Microsoft founder Bill Gates, and Amazon founder Jeff Bezos. Buffett’s net worth is now just over $75 billion. Most of Buffet’s gains came right after the presidential election. Buffet earned most of his gains in four areas: Banking/Financial Services, Airlines, Cable, and Food. Buffet is a long-time investor in American Express and the financial sector itself. Buffet invested heavily in Delta, United Continental, American, and Southwest Airlines. Back in 2014, Buffet invested heavily in Charter Communications. Buffett finally invests in food. Even though Buffet saw a loss in Coca-Cola, he also is a big investor in Kraft Heinz, and that stock is up 21 percent.

If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section.

For this week, I’ve included THOUGHTS – Motivational Video from Be Inspired YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs
28:26 MSG‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬


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