What is the biggest financial crisis you could handle?

[stinkynuts]

There was a study that said 63% of Americans could not cover a $500 emergency (e.g. dental procedure or car repair), without having to resort to borrowing from friends/family, using a credit card, or selling their house.


What is the largest emergency you could handle? You must pay in cash (no credit cards, borrowing, etc.) Of course, you can liquidate investments such as stocks, bonds, mutual funds, etc...

 

[thumper18474]

5-10k...without skipping a beat
50K..with some minor inconvenience

 

[Butler1000]

I did an assessment recently where I figure if i had to do a total liquidation and start from scratch I'd be in the black about 650,000. Not too shabby I think.

But we are in the maybe one year of expenses handy without liquidating anything.

 

[stinkynuts]

I did an assessment recently where I figure if i had to do a total liquidation and start from scratch I'd be in the black about 650,000. Not too shabby I think.

But we are in the maybe one year of expenses handy without liquidating anything.

That is a heck of a lot of money to have! Wish I had that much.

Two people so far say they have 1 million or more ready to spend. That is quite amazing.

 

[bazokajoe]

What kind of financial emergency would cost $100,000 +? Or even as lil as $20,000? I am 53 years old and having trouble figuring out what people would do to get in that kind of trouble/emergency.
If you are living beyond your means that's a different story and your own stupidity.

 

[fuji]

What do you mean by handle?

With our without impacting retirement plans?

I have about $20k in sitting in short term investments for emergencies. Beyond that I have a lot of money in various investments but it's meant to be retirement savings. Spending it would impact my lifestyle in retirement. Maybe not noticeably if I used only a little, but pull a lot from it and I would have to change me expectations.

 

[fuji]

What kind of financial emergency would cost $100,000 +? Or even as lil as $20,000? I am 53 years old and having trouble figuring out what people would do to get in that kind of trouble/emergency.
If you are living beyond your means that's a different story and your own stupidity.

Sustained unemployment is the largest financial risk most people face, and one nobody will insure you against.

What would happen to your finances if you lost your job tomorrow and were unemployed for the next three years?

 

[eddie1]

1 million is no longer the retirement Holy Grail. Lots of people can achieve this. You need 2+ million in your poll.

 

[Cassini]

Financial disasters are kind of weird. If the banks collapse tomorrow, who is worse off? The person with nothing, or the person with $1,000,000 in the bank.

The person with nothing is probably used to disasters and can whether them well.

The person with $1,000,000 in the bank will have their accounts frozen, and trouble liquidating other assets to cover their on-going expenses.

I'm convinced an entire lifestyle exists surrounded by financial disasters and people wandering from disaster to disaster with lenders lending them money in between. Somehow, I think that kind of person would do well in a banking crisis. They would be used to it.

 

[thumper18474]

What kind of financial emergency would cost $100,000 +? Or even as lil as $20,000? I am 53 years old and having trouble figuring out what people would do to get in that kind of trouble/emergency.
If you are living beyond your means that's a different story and your own stupidity.

An extended stay in a US Hospital...will run you into the 100's of Thousands
Emergency surgery...in a US hospital...(My..S/O worked in a surgical unit in the US for a bit..you needed to have an accounting background with the way they itemized everything right down to ths 2x2Gauze bandages)
Bail..LOL
Emergency flight home (medivac)
Of course this is if you didnt get Travel /medical insurance

 

[nottyboi]

1 million is no longer the retirement Holy Grail. Lots of people can achieve this. You need 2+ million in your poll.

there are sooooo many factors that affect that. Single or couple...etc etc etc

 

[oil&gas]

Financial disasters are kind of weird. If the banks collapse tomorrow, who is worse off? The person with nothing, or the person with $1,000,000 in the bank.

The person with $1million should have at least $100k
of his money paid back to him by the Central Bank. The
guy with nothing will still have nothing. The guy with
10% of his saving salvaged will feel more miserable though.

 

[bazokajoe]

Sustained unemployment is the largest financial risk most people face, and one nobody will insure you against.

What would happen to your finances if you lost your job tomorrow and were unemployed for the next three years?

Obviously my finances would take a hit to a certain point.The way the question is asked,it sounds like to me,how would an emergency impact me.I see that as a immediate event not something that occurs over time, such as a mortgage you can't handle while working.Living pay check to pay check while working.
If my car gets totaled today,it wouldn't be a problem buying a new one.

 

[bazokajoe]

An extended stay in a US Hospital...will run you into the 100's of Thousands
Emergency surgery...in a US hospital...(My..S/O worked in a surgical unit in the US for a bit..you needed to have an accounting background with the way they itemized everything right down to ths 2x2Gauze bandages)
Bail..LOL
Emergency flight home (medivac)
Of course this is if you didnt get Travel /medical insurance

I understand what you are saying,but if someone leaves the province without medical insurance they deserve to suffer financially.

 

[FAST]

I understand what you are saying,but if someone leaves the province without medical insurance they deserve to suffer financially.

Thing is,...people with 100,000's available, will NOT travel without insurance.

People who are not financially responsible will, hence the difference between those who are financially secure, and those who don't give a shit.

I always buy insurance.

If you can't afford insurance,...its just like the credit card issue,...if you are paying 20% interest, you can't afford to in the 1st place.

FAST

 

[fuji]

The guy with $1mil likely has other assets as well.

He likely has a house, maybe with no mortgage. He may have some physical assets he can sell, like jewelry, art, expensive furniture, a relatively new car.

I have 1% of my net worth in physical gold. It's not a lot, but in crisis it will gain a lot in value and be worth something. It's in my home. Not on paper. For the guy with $1mil that would $10k worth of gold that might now have doubled or tripled in value to say $25k. Might be enough to tide him over until the collapse is over.

And of course the guy with$1mil has something else of great value: an ability to earn a living. He got that money by doing something he can trade for money. Maybe he owns a business, maybe he is a well skilled employee. That will help him recover.

But obviously in a total collapse we are talking about subsisting. The guy with 1mil can forget about the comfy life he was expecting and it's true that might be psychologically tougher for him than the deadbeat used to living on the edge.

Of course in a total collapse starvation becomes a real possibility and the deadbeat might not be able to survive. If the food distribution system fails the guy with $1 m may be able to buy food with his physical assets from a local farmer while the deadbeat will run out of food once the shelves are picked bare at the local supermarket.

 

[out4fun]

It would depend on the "disaster". People with net worths that are in the multiple millions should be able to write a cheque for 50k emergencies without much difficulty , but creating liquidity to write a cheque for $1m would be difficult for most multi millionaires.

 

[stinkynuts]

There are many emergencies that could cost upwards of a million:

1)close family member becoming very sick
2)accident
3)losing your job permanently and not being able to be re-hired
4)illness that causes you to lose job
5)disability (becoming blind, disfigured, etc.)

 

[onceaday]

I agree basically with your comment but up the number to $4-5M. And have a solid life insurance policy if you have family. "Elegant" retirement living is 3K a month per person. We shall all need that at some point and what a shame to work your ass off for 60 years and end up in a crap care scenario. Just went through the process with a family member. VERY expensive.

1 million is no longer the retirement Holy Grail. Lots of people can achieve this. You need 2+ million in your poll.

 

[Carvher]

the real question should be; could you keep hobbying?