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“Emergency Fund” Dilemma

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  • #16




    We have the HELOC for that as the cashflow buffer to allow for fast moving access needs that can come up; then liquidate if needed if standard cashflow doesn’t cover quickly.
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    A HELOC is great to have for emergencies under most circumstances.  It can be a good backup plan, an emergency fund, a source of liquidity when needed.

    However, it is interesting to recall what happened after the real estate crash started in 2007.  Our HELOC was with Chase Bank. As mortgage holders around the country started defaulting, Chase panicked and cancelled our HELOC despite our excellent credit score and plenty of equity in the house.

    Fortunately as physicians our job security is generally bulletproof, even in a severe economic crisis.

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    • #17
      Narrowed it down to a fidelity tax efficient index fund like Spartan Total Market (fidelity for convenience with my other accounts) PLUS my State Muni OR
      Vanguard Tax-Managed Balanced Fund Admiral Shares (VTMFX) for safety.

      With the former AA can be changed as I see fit via alternating contribution amounts over the years. With the latter its 50:50.


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      • #18


        Curious – What’s your balance between equities/real estate these days? minus the primary house, we’re 50/50 balance at this time.
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        Sorry, saw this just now.

        My real estate is predominantly investing in motels / hotels. I also have a couple of town-homes and one house as rentals And am part owner of a convenience store. All these make up 50% of my equity and the individual stocks and mutual fund make up 25%. I carry 25% in cash because financing of properties requires readily available money.

         

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