4 ms·
There are various reasons that someone might be short of funds. That said I totally agree with you, I've lived pretty scrappily (Saved thousands on minimum wag
by precisioncoder 14y ago
There are various reasons that someone might be short of funds. That said I totally agree with you, I've lived pretty scrappily (Saved thousands on minimum wage salary). These days I'm saving like crazy to get a reasonable reserve built up. My goal is to have a similar reserve to yours or higher. That way if I need to look for work I can afford to do it in a relaxed manner. Nothing cripples a negotiation like desperation (for me at least).
- pc86 14y agoGive careful thought to what proportion of your funds you need immediate access to. Assuming you're in the US, a bank account is going to give you maybe half a percent interest every year. Keeping more than 3-6 months expenses (not income) in the bank is just giving money away. The generally accepted order is (not my formula, and this is for US-centric retirement, not necessarily starting a business): 1) Max out employer 401K match 2) 3-6 month emergency fund (I've seen this and #1 switched before, personal preference) 3) Max out Roth IRA ($5,500 for 2013) 4) Max out 401K contribution 5) Start investing Obviously if your focus is on creating an 18-24 month runway you'll want your emergency fund totally liquid (cash in a bank you can withdraw on demand) and the remainder will be focused more on semi-liquid, marginally higher-interest assets than on retirement accounts.
- precisioncoder 14y agoIn Austria so I don't use the US system. Retirement money is provided automatically in Austria and Canada the two countries I've worked in so that's a lesser worry. That just leaves mid investment (5-10 years) and emergency money. I'm planning to keep it roughly at 50/50 at least until I build up a decent buffer. (Online banks in Europe often give you as much as 2% on a savings account)