( continues...) hurting rather than helping you avoid greater loss. Lets assume a big emergency. In fact lets assume 2 big emergencies happen at the same time, and lets assume that each of these emergencies is so big that the each would entirely drain your emergency fund (NOTE TO ME: Remember that I have to show that if an emergency is too big the emergency fund dn help either, in other words the size of the emergency has to be just right). Furthermore, lets assume that it happens at the worst possible time – the day after you decide to forgo an emergency fund and invest that money. Even worse in that 1 day all of your investments have lost 20% of their value. On that day, that you lose you job and are out of work for four months, your car’s engine seizes making it worthless. Ouch a quadruple whammy, 2 catastrophes, both at the worst time possible and both as big as you can handle. You need a new car (lets forget for the moment that buying a new car in this situation is a very bad financial decision – a topic I will explore later), and you need four months of living expenses. The new car costs 20k and the living expenses come to 20k. The 20k you put into the mkt instead of in your emergency fund is now only worth 16k. So you sell all of that plus 24k more that you have invested, and you buy your new car and all the stuff you need to live for the next 4 months. The next day the market turns around and continues straight up for the rest of your working life (40 more years) averaging 10% per year tax deferred. At the end of the year you lost out on 10% appreciation on the 4k you had to take out of your investment portfolio. Your total loss for the year is 400dollars. But that is specious. You lost that appreciation for ever (I am assuming you are 25 yrs old and have saved 40k). 10% compounded for 40 years is 177k. 260,000. This also assumes that you do nothing to replace the 4k in your folio, which is the real cost. In other words you would cut back on your expenditures to the tune of 4k over say the next four years (1k per year). If you do that, the cost to you is 4k compounded for 4 years, which we can expect to be in the area of 1,600 dollars. If you tighten the belt a bit more and can replace the 4k in 1 year, you are out 400 bucks on avg (but you may even be ahead of the game if the market was down in that time period). In other words, with a very small amount of effort, your maximum damage is essentially zero (I know some people will say that 400 dollars is not zero, but it certainly is not typically a risk that one must insure against. Also remember that this is the absolute ridiculously worst case scenario! In fact it is an unrealistically catastrophic situation (note I know one could paint a more grim scenario, but the true “worst case” scenario is always utter destitution for the rest of you life. So we must use the most realistic worst case scenario). The vast majority of the time even if 2 huge emergencies befall at the worst possible time, you will lose less than 400 dollars.

David, I'm not sure what your friend is getting at about relative ease of access. I have more credit card credit than I could ever pay off if I actually used it. If I used it all, I would have a hard time paying the interest payments. However, I could take some of the money that I'm not paying to someone else in interest payments and save it, so for me, savings is easier and less risky than credit.

On top of this, like many, I'm not the greatest at tracking my finances. I have, upon occasion, made late payments, lost track of how much I have in my checking and savings accounts, and made various other errors of the like. If I make errors with credit card debt, I get dinged with huge fees and rising interest rates. If I make mistakes with my own money, I may not get the interest I should get, but I won't get dinged right and left.

I fully accept that I'm not financially astute, but combining what I know of finances with what I know of human nature, credit seems risky to me. I do think that house credit is different, because it allows you to build equity. Alas, with houses costing what they do here and with the relatively low wages of my chosen profession, I don't see that happening any time soon.

And Trudes, hie thee to a recruiter!

ION, Jack Chick comic on the evils of homosexuality: [link]

Catholic costumes for children: [link]

I'm down with having 7,500 in savings and having it available in credit too. Especially if the $7,500 in savings is making little babies. Because that would make it unnecessary for $7,500 in debt to make its own bigger babies.

I'm watching a bunch of Mission: Impossibles. Apart from stoking the Nimoy love, it's made me wonder: how is the premise best pitched? I find it doesn't really generate any tension for me. This may be because of a certain snobbishness I retain towards late 60s TV. I do find the plots pretty hard to follow, since I'm used to a more audience-friendly setup of the protagonist's plans. Perhaps I should get over the afore-mentioned snobbishness.

What fruits other than apple have lots of water and lots of fibre?

Trudy, I'm impressed. About Caroline's not the boss being a fucker

Citrus if you eat the white parts?

Berrys.

David, I'm not sure what your friend is getting at about relative ease of access. I have more credit card credit than I could ever pay off if I actually used it. If I used it all, I would have a hard time paying the interest payments. However, I could take some of the money that I'm not paying to someone else in interest payments and save it, so for me, savings is easier and less risky than credit.

I think his argument is that having $7,500 in credit is worth more than having $7,500 in savings. Because the $7,500 you have in savings could be invested in a higher yield that brings you money, and you'd still have the credit.

Also, he thinks the idea of "financial emergency" - while resonant - is actually overstated/overvalued.

Anyway, I won't flog the horse. I'm just putting his argument out because I think it's an interesting refutation of the conventional wisdom about finance.

The Caroline's thing is sweet, Erika.

The voiceover reel is even sweeter -- I'm being "groomed" a bit and all that. By a casting director of some note who needs comedic women and is tired of hearing reels he thinks are crap.

Oh, and if Richard Belzer's hair has gone white I saw him in a health food store today.

I should maybe have added that I also don't have credit card debt. My stupidity is savings vs things that might well make me more money but are riskier.

eta:

David, I'm not sure what your friend is getting at about relative ease of access. I have more credit card credit than I could ever pay off if I actually used it. If I used it all, I would have a hard time paying the interest payments. However, I could take some of the money that I'm not paying to someone else in interest payments and save it, so for me, savings is easier and less risky than credit.

In other words, this is me.