| Build This 'Foundation Fund' to Smooth out Life's Surprises | | By Dr. David Eifrig, editor, Retirement Millionaire | | Wednesday, June 21, 2017 |
| The radio is playing as you drive down the road… You're thinking about your grocery list… And then, out of the blue, your car engine stutters and dies…
It's every car owner's most dreaded experience.
It happened to my assistant Laura last year. She put the key in the ignition… But the car wouldn't start. It sat there, a dead, 3,700-pound inconvenience.
It turned out several things went wrong at once with her 10-year-old car. Her total bill for the repairs, along with the tow service and renting a car for a full week, came to about $1,200.
Unexpected costs are part of life. But around 60% of Americans don't have enough in savings to cover even a $500 emergency. And the number that can't cover a $1,000 emergency expense is closer to 70%-80%!
Thankfully, Laura is in the minority. She has an emergency fund to lean on for exactly these kinds of unexpected bills…
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I can't stress enough the importance of an emergency fund.
If you imagine your financial life as a house, an emergency fund should be the foundation. You want to make sure that in the event of an accident or job loss, you have the funds available to pay your expenses.
Typically, financial planners recommend having about three to six months' worth of take-home pay in your emergency fund. We've even seen some recommendations for as much as nine months' worth of pay saved.
Before subscribing to one of these simple rules of thumb, consider a few things before deciding how much is best for you…
| 1. Are you single or married? | |
Single folks with a reliable job don't need to save as much… But married folks where only one partner has a job (even a reliable one) should have more in savings. That's because in the event of a job loss, you'll have to pay bills for two folks instead of one. Married folks where both spouses have reliable jobs don't have as much risk.
| 2. What are your monthly expenses? | |
If you don't know how much you spend per month, take time this week to sit down and figure it out. Include bills for your home (like rent or a mortgage, utilities, homeowners' association fees, property taxes, and insurance), as well as car payments, taxes, medical expenses, and living expenses (like groceries).
| 3. How secure is your job, and how quickly could you find a new one? | |
Some fields hire regularly, but others might not. Networking is a great way to increase your visibility, and keeping in touch with connections will help should you ever need to find a new job. Age can be a factor, too – although age discrimination is illegal, we know several folks 50 and older who've had difficulty finding a new job due to their age and being "overqualified."
| 4. What assets could cause you an unexpected cost? | |
Sudden problems like car or home repairs often require the use of an emergency fund. Some of the most common car or home repairs can add up to hundreds, even thousands of dollars. One important step is to understand exactly what your insurance will or will not cover. Likewise, know your warranty terms and how long they last.
| 5. Is your health in order? | |
According to the Kaiser Family Foundation, the average family health insurance plan deductible is about $1,500. Should a sudden accident or illness strike you or a family member, think about whether you could afford to cover the associated costs.
A good solution for this is to open a Health Savings Account (HSA). If you aren't able to open an HSA, make sure to factor these costs into your emergency fund.
Once you calculate your emergency fund, you can start putting any leftover money to work in other investment accounts that can make you money.
Having a solid foundation is key to having a solid house. The same principle applies to your finances – start with an emergency fund and grow from there.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig
Editor's note: You can't predict an emergency... But you can be prepared for one. That's why Dave wrote The Doctor's Protocol Field Manual – packed with lifesaving tips, secrets, and strategies. It's designed to help you survive – and even prosper – in the midst of any crisis. You can order a copy by clicking here. |
Further Reading:
"The first step to building wealth is not to increase your income," Dave writes. "The first step is to curb your spending." Before you can put your money to work, you must first save more. Learn why you don't need to cut back on what makes you happy here: The Rich Do Have a Secret. |
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THE BIG UPTREND IN 'DISNEYLAND FOR ADULTS'
Today's chart highlights a powerful investing strategy... Some companies own one-of-a-kind assets. This creates a competitive advantage that is almost impossible to replicate. These kinds of assets can bring in huge profits when managed properly. Porter Stansberry has written about this concept several times... He calls it "trophy asset" investing. One of Porter's favorite examples is casino operator MGM Resorts International (MGM). MGM practically owns the Las Vegas strip. Its assets include 1.1 million square feet of casinos on the Vegas strip, another roughly 450,000 square feet of casinos located around the U.S., and 50% of the 300,000-plus square feet of MGM Macau. These are assets you can't simply go out and buy... As you can see, MGM's shares are up around 35% over the past year... and recently hit a fresh multiyear high. With this company's premier position on the Las Vegas strip, it can keep raking in the cash for years to come. And its big uptrend will likely continue as adults flock to their version of Disneyland... |
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| Three trading secrets you need to know in today's market... Once you build your savings, the next step is to invest and grow your wealth. But you need to avoid a few of the major pitfalls many new investors fall for... |
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| Today's Announcement Could Change the Investing World Forever | | By Dr. Steve Sjuggerud | | Tuesday, June 20, 2017 |
| | This single day could force big investors to make huge changes to their investments. And it's just the beginning... |
| | The Real Story Behind New Highs Will Surprise You | | By Dr. Steve Sjuggerud | | Monday, June 19, 2017 |
| | As soon as any market hits a new high, investors get worried... They think it can't go higher. But this is dead wrong, as I'll show you today. |
| | The Companies to Own for the Coming 'Supercycle' | | By Flavious Smith | | Saturday, June 17, 2017 |
| | It's not all "doom and gloom." These troubles will finally set the stage for a real recovery... And this one will be led by the good ol' USA. |
| | Are You an Amateur or a Pro? | | By Porter Stansberry | | Friday, June 16, 2017 |
| | Did you panic? Were you afraid? Friends... If last month's market action bothered you in any way, there's a huge problem with your portfolio. |
| | When This Happens... It's Time to Get Out | | By Dr. Steve Sjuggerud | | Thursday, June 15, 2017 |
| | The "Bacon Cheeseburger Trade" was a simple bet. Here's what the story looked like seven months ago... |
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