The Motley Fool Discussion Boards

Previous Page

Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: Poll: Help me figure it out Date:  12/29/2013  3:36 PM
Author:  aj485 Number:  307624 of 312992

20K should be enough coupled with the private unemployement insurance I purchased should something go amiss.

What are the terms of the insurance you purchased? I've only seen one company that offers this type of insurance, and their terms don't seem to provide all that much 'coverage' to me. The maximum term on the insurance is 26 weeks, but the first 2 weeks are a 'waiting period' - so you only get 24 weeks of coverage. Then, the insurance only pays in addition to your state unemployment insurance, so even though it's advertised as covering 50% of your employment income, the insurance doesn't provide the entire 50% by itself - the insurance and the state's unemployment benefits add up to provide you the 50%. And then, because it's in conjunction with the state unemployment insurance, if you don't qualify for unemployment benefits from your state (for instance, because you quit your job or were fired for cause according to your employer, etc.), you won't get the private unemployment insurance either.

Because not all 'emergencies' involve loss of a job in a way where you will be paid unemployment insurance, counting on the private unemployment insurance for much of your 'emergency' fund seems to be assuming you will have a specific type of 'emergency'. In that case, I would call it an 'I lost my job in a way that I can claim unemployment' fund, rather than an 'emergency' fund.

Rental nets me like 60$ month positive cash flow plus a tax break .. if I refi'd I could get a more positive cash flow

The $60/month positive is after all costs? Including, but not limited to: principal, interest, taxes, insurance, maintenance/repairs, allowance for vacancy.....

And don't forget, much of that depreciation tax break that you are getting now will be recaptured when you go to sell, and end up paying capital gains taxes based on the depreciated basis.

I feel like holding on to anything out side of 20K is a waste.. and it should be invested .. otherwise I am doing no more than putting it in a hole in the ground.. and tht is a losing strategy .. I detest CDs, and getting .5 % in a savings account while they loan out my money to others .. is also a waste.

Well, then you need to do what will let you sleep well at night. Having seen that investments can and do lose significant value in a very short time, I would say that investing can also be wasteful.

Apparently I am attached to owning property .. am having a hard time of letting it go based on the dallas housing market.. and the exponential growth.. I think it is a good long term investment..

In general, sustainable increases in housing tend to track the overall inflation rate - maybe a percent or two more each year. Counting on anything higher than that is counting on unsustainable increases.

But again, it's what allows you to sleep at night.

> > the other crazy thought I had was to sell everything both houses.. take the cash and buy a foreclosure at auction that is coming up.


>> sell everything and move into his travel trailer.. Sometimes I think I am a simple person.. and don't need all the stuff I seem to have acquired..

Seems to me that you still don't have your long term goals set after the shocks you have suffered in the past year or so. You will probably be best off in the long run if you figure out what you want those long term goals to look like, and then figure out how you can use your resources to get to those goals before you make your investment decisions. Parking the money in a savings account for a few months is unlikely to have a negative effect in the long term, and it might keep you from spending money in a way that you find was wasteful when you determine what your long term goals really are.

Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us