Paycheck to Paycheck Nation - NPR - Dec. 16th

[PDXTabs]

Thanks, PDXTabs. I agree that is significantly better data. And while there is probably someone who answered the survey and picked sell something because they'd go in the back yard and dig up one of their krugerands to sell, or "borrow the money" because they'd call up their brokerage and take out a margin loan (like MMM illustrated) neither is likely a common enough situation to meaningfully influence the percentages.

I would just add that from the same survey only 14% of people said that they couldn't cover a $400 expense right now (which I think is what the much larger percentages sometimes end up being misinterpreted to mean).

I agree, it sucks that ~half of the population doesn't have $400 spare. I was just trying to illustrate that there is a huge difference between not being able to come up with $400 and not having $400, at least in practical terms for paying for a car repair or doctor visit.

[UpNAtom]

Oh I can definitely believe that only a minority of americans have $500 in savings. It's just the translation from "don't have $500 in savings" to "couldn't could come up with $500 in an emergency" where I think some information is lost in the game of telephone which is the internet.

Yea, the best data I've see on it is from https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf which says:

Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

So, strictly speaking, if you have 16 Krugerrands but less than $400 in USD you would get caught up in that statistic.

So that does skew things a bit, especially if we're talking about selling shares from a regular taxable investment acct.

But do people with money to invest really run their cash accts with <$400 in reserve? Seems like at that level you'd be inviting overdraft fees for the slightest oversight in cashflow management. Personally I keep an order of magnitude more in my checking acct, just avoid that risk as well as the mental effort of keeping up with the day to day balances.

My checking account currently has $1.62 in it. Everything else is swept to Roth (and other investments once that's maxed). All expenses go on a rewards card that is paid off every month. We do have around $4000 in our online savings and another $4500 in our rental account that could be pulled on for cash if there was an immediate need, also my wife always has some cash on her. My family knows that I don't keep cash - it seems when I do, there are a thousand little needs that bleed it dry from them and it's gone like a fart in the wind. I think Pete says something about it somewhere about cash - there's no accounting for it, it just gets spent. By putting all of my spending on the card, I'm able to see exactly where every dollar went. But yeah, the checking account is loaded with money once a month from payroll, then allocated to bills and investments.

1.62 in chequing is definitely offset by the 8.5k in savings (super quick access).

[talltexan]

Supposing the thing I'd sell to cover that expense is a put option on $SPY?