Why do I always forget what those are until I've clicked?

Heh. I mean, sorry. After I posted, I was thinking, "I hope everyone knows what Jack Chick comics are...."

His point is that risk can be calculated (in dollar amounts) and that your return (including the financial ability to absorb emergencies) is much, much higher with investments over savings.

This it probably true, but it is also true that a) am in an industry where pension plan contributions by the employers is the norm, b) that industry means I don't have quite as much freedom with investments as most people do because of conflict of interest rules, c) I will have other money coming in from elsewhere before retirement, and d) I am lazy and risk adverse.

I also have Mr. Kiplings' Mini apple pies, but that's beside the point.

Trudy , DH wants to know, which captain Jack?

Harkness. I've been practicing it. Apparently its gotten pretty good.

Yeah, again - I think he's probably got the numbers on his side, but "no need for savings - just tap into your investments" isn't actually all that practical for a lot of us.

My last post was xposted with David. In reading what his friend had to say, it's clear that he's defining "savings" differently than I was, and that we were arguing sideways. I have no problem with investing in any fairly readily accessible way instead of keeping cash on hand, although I'm paranoid and lazy enough that I don't do that. And I don't have any problem with having credit. Instead, I'm concerned with the increasing reliance on credit card credit, which is not practical or reasonable for non-wealthy people. Since, I don't think your friend was arguing for using credit card debt instead of saving, but for investing instead of saving, nebbermind.

Let me posit it this way, because this is something I personally understand better.

When you play the game of Monopoly you quickly learn that you need to buy properties and develop them in order to win. Because as much money as you stockpile, and as much as you generate a regular income by passing Go, you will quickly fall behind compared to investing your money.

There is risk involved in taking your cash and buying hotels. You have to be cash rich enough to do it and survive your costs. However, if you don't invest your money you will lose.

It's just that notion. That savings in that context provides an illusory sense of security. You have to make your money work for you.

Here's another angle on it: one of the inefficiencies in the market that money managers exploit is that people are fearful and don't understand how finance actually works. Savings is how people respond to their insecurity about not understanding finance.

Mind, I say all this as somebody whose finances suck. So, it's not like I've sorted all this out personally either.

But I think the principles of finance are logical, and how people feel about risk is not.

Here's another angle on it: one of the inefficiencies in the market that money managers exploit is that people are fearful and don't understand how finance actually works. Savings is how people respond to their insecurity about not understanding finance.

Oh, I understand how finances work. I may not always do what I should, or rather as much as I should (again, Lazy), but I do understand them. I also understand that having some extra money available in addition to having investments works for me indivdually because of other factors that other people may not have.

I wonder what the rate of return would be on investing in workers seizing the means of production and smashing the state....

I suppose the risk involved would be pretty high....

Another element of his argument which I'm not doing justice to is simply that people already have invested in various Emergency Funds that they don't think of as an investment because it is insurance, or taxes on unemployment or disability etc. This is actually a fairly significant part of his argument, that people don't see/understand that they've already invested in an emergency fund and it's called insurance.

Now I've read ( well skimmed) What Gary said. Logically - his idea works for someone like me - DH and I have a house, some retirement, some other investments. DH had an opportunity to move some $$ into a higher yield account - but it could take over a week to get to it - I said go for it.

Now , I know other people that 1) have no investments 2) no house 3) no or little retirement -

they could use some saving - just so they can live in the no job emergency zone.

I have a pretty severe money fear. Logic is actually making me rethink things . Can I go as radical as no savings - probably not. But I think I can get way more radical with paying things off. After April. Just in case the bullshit with Matt's 401k comes back and tries to bite us in the ass.