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In the US, real estate can be a horrible investment. Property values can drop dramatically, and property taxes keep going up.
Schools are funded by property taxes, and people keep voting to increase them. We had two 50% property tax increases within a couple years, with no increase in selling prices in the area.
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Do you suppose there's a cause & effect relationship there?
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Jörgen Andersson wrote: I can buy a new Mercedes tomorrow, in cash,
Wow. 
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.
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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.
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Abhinav S wrote: Jörgen Andersson wrote: I can buy a new Mercedes tomorrow, in cash,
Wow.
It'd take me a bit longer than a day to do that since I can't write a check against my savings account. OTOH doing so would set me back a half dozen years on my plans of home ownership; so a few months ago I took out a loan for a Honda. 
Did you ever see history portrayed as an old man with a wise brow and pulseless heart, weighing all things in the balance of reason?
Is not rather the genius of history like an eternal, imploring maiden, full of fire, with a burning heart and flaming soul, humanly warm and humanly beautiful?
--Zachris Topelius
Training a telescope on one’s own belly button will only reveal lint. You like that? You go right on staring at it. I prefer looking at galaxies.
-- Sarah Hoyt
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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.
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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? 
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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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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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 am in the same postion as Nelek. I notice that alot of Techies(programmers) who look forward and do planning also do the same in their own life.
No I could not go buy a mercedes tomorrow. But I could buy a decent used car tomorrow and I could survive about 6 months without income. AFter that I might start to hurt a bit.
I have a house payment and nothing more at the moment. But I do take advantage of the put this on credit and we will give you 5% in rebate deals all the time. Then pay it off the next month. So I use my credit to help me out alot.
To err is human to really mess up you need a computer
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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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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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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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Precisely. 
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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Jörgen Andersson wrote: I can buy a new Mercedes tomorrow, in cash
Yeah, I heard they are sh*t these days.
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You would know being full of it...
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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.
| Ravings en masse^ |
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| "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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W∴ Balboos wrote: 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.
I'm mildly surprised you're able to get away with that level of markup. I thought the forum worked on an html whitelist to keep out abuse.
Did you ever see history portrayed as an old man with a wise brow and pulseless heart, weighing all things in the balance of reason?
Is not rather the genius of history like an eternal, imploring maiden, full of fire, with a burning heart and flaming soul, humanly warm and humanly beautiful?
--Zachris Topelius
Training a telescope on one’s own belly button will only reveal lint. You like that? You go right on staring at it. I prefer looking at galaxies.
-- Sarah Hoyt
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The available HTML is rather limited. Normally, if I use text-shadow, it would not be as I just did (an experiment, actually), but to slightly bring-forward text. The list, not long ago, was cleared and reset (figuratively speaking) by ChrisM. Mainly, it's color and text decoration, bullet lists, a table. Except, as I had just done, they're good to enhance readability.
Abuse? I'd worry about links - yet they're essential. So I don't worry about them (here).
Now, on the other hand, if we could get rid of those smiley-faces . . .
| Ravings en masse^ |
|---|
| "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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W∴ Balboos wrote: Now, on the other hand, if we could get rid of those smiley-faces . . .
Funny you should mention those...
PS CP's forum has a styling problem with tables that was introduced a year or so back and which hasn't been fixed yet. Maunder blamed it on a 3rd party when I reported the bug. 
Did you ever see history portrayed as an old man with a wise brow and pulseless heart, weighing all things in the balance of reason?
Is not rather the genius of history like an eternal, imploring maiden, full of fire, with a burning heart and flaming soul, humanly warm and humanly beautiful?
--Zachris Topelius
Training a telescope on one’s own belly button will only reveal lint. You like that? You go right on staring at it. I prefer looking at galaxies.
-- Sarah Hoyt
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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.
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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.  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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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
 Can you provide a link or detailed explanation?
Whenever you find yourself on the side of the majority, it is time to pause and reflect. ~ Mark Twain
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Dave Ramsey.
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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