[Donnie]

for younger folks working toward FI, this is my take on an emergency fund….

im 65 and retired when i was 48, so far/so good!!! as life passes, you have periods when you feel times are really good!!!…

everything is working, you’re feeling great and life is smooth….

but never fear, we ALL know that euphoria doesnt last long!!! the last couple weeks i have experienced just that, when EVERYTHING seems to break or tear up or quit or etc.

all at once!!! these are the times your emergency fund “bucket” has GOT TO BE DEEP!!! these are the times that can cause you to fall off your FI path and get you into money trouble….

your car breaks down…your air conditioner quits…your roof started leaking…

your pet needs a vet…ALL IN A WEEK!!! it’s in these times when borrowing money, putting debt on credit cards, taking out title loans, etc.

can put you in a hole that’s hard to climb out of!!! i can’t put a figure on how much this bucket needs, but it’s gotta be DEEP!!!

in my situation, i put money every month in this bucket just like a payment.

during ROUGH periods, sometimes the bucket gets really LOW, but know the hard times dont last forever and the smooth sailing times will let your emergency fund recoup over time.

it’s always better to have it and not need it than need it and not have it…

those times will cost you more in the long run with interest, penalties and so forth.

good luck on your FI journey and may your emergency fund BUCKET stay deep!!!

[Andy]

So you retired the year the Great Recession started? That is a worse case scenario, for sure.

Sequence of returns risk is about the worse scenario a retiree can face.

What types of things did you do to preserve your capital/nestegg?

[Justin]

How do you decide when to use home insurance vs. paying out of pocket to repair an issue?

A multiple of your deductible? A flat amount?

[Vincent]

I’ve nicknamed my emergency fund “the 9/11 Fund” because it’s the savings I *wish* I had on hand to get me through that difficult period. I agree with you.

Life has a way of being OK for a while and then throw difficult circumstances at you suddenly when you least expect it.

[Leanne]

Thanks. I’m 32 and sometimes I feel like I’m keeping too much but this is a good reminder

[Golden]

Thanks. Great advice! My reserve is 3 years in cash. Many don’t agree, but I sleep well at night.

Do what you’re comfortable with.

[Emily]

Ugh, this year is a prime example of the “hard times” — multiple necessary surgeries, plus having to take time to heal! I’m so thankful that I have a deep bucket *and* supportive friends and family!

[David]

I used to be big on a cash emergency fund. I still think it works for most Americans but for those on the path to FI/FIRE and those that are FI/FIRE, I’m not sure it’s the best path or strategy.

Early Retirement now changed my mind on that back in 2016.

I have found the math to work better for me in all ways by investing that money in a taxable account vs keeping it in an MM account in cash.

[Randa]

Donnie, thank you for this great reminder. Down to earth, experienced based wisdom —- much appreciated

[Vicki]

Great advice! This week the washer broke, had to be replaced and had two expensive vet visits for my dogs.

[Author]

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