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Subject:  Re: What comes first? Date:  2/16/2001  7:47 PM
Author:  TTRoberts Number:  27949 of 78168

c130king, you asked:

<< What if you don't have enough to do all 5 of your steps? Is there such a thing as too much tax free/deferred investing? Are you ever concerned about having all of your funds tied up in somewhat untouchable investments? I would think some percentage of investments in taxable instruments so that you can get to it if necessary.

Any thoughts on this?

That's a VERY, very, very good point and question. Too often in this forum the idea of an Emergency Fund goes without any consideration. I suppose that's because the thinking around here tends to be focused on maximum return without taking other things into consideration (e.g. risk tolerance).

An Emergency Fund is indeed part of one's total asset allocation and is indeed a place where you would look to so that "you can get to it if necessary". So, my thoughts as to "what comes first" are that one should put a high priority on establishing an Emergency Fund. Then if one has a company 401(k) with employer matching, that would be the next item on the list as the employer matching is thing to take advantage of. After that, it really DEPENDS