Common wisdom in the personal finance world is to have at least 3/4/5/6/9/12 months of expenses in an emergency fund. The money in this fund is used as a cash buffer, not to be invested but to be ready when something bad happens to you. In general, this is really good advice. But for the die-hard FIRE people, do you really need an emergency fund? Check out my emergency fund examples here.
To measure is to know, also in the personal finance world. Tracking your income and expenses, investments and net worth should become a standard for individuals striving to reach financial independence. I have a set of personal finance dashboards that I use to keep on top of my finances. Do you too?
It is a fact that real estate owners have a higher net worth than renters. This has not only to do with home owners paying down their mortgage. To get the same effect renters could just save and invest right? No. In practice that doesn’t happen. The reason is inflation.