You heard me, go to hell. What if everything around you did just that and went to hell. Do you have a “go to hell fund”. OK the usual name (rainy day fund) is not quite as descriptive but you get the message.
Most people don’t have a go to hell fund and that is why most people never get out of the financial doldrums. According the U.S. Census Bureau over 69% of households had some form of debt yet and the Employee Benefit Research Institute states that 60% of workers have less than $25,000 saved. The fact is most Americans are a few paychecks away from being totally broke,
That truly is hell.
Shit happens. Things get messed up and you need to be prepared. I once heard someone say that Murphy (of Murphy’s Law fame) was an optimist. If it can go wrong it will, at least twice. So everyone needs a go to hell fund.
How much should you have?
At least 6 months worth of expenses. If you job is tenuous or you make a variable income it would be good to have more than six months worth of expenses. Your funds for the go to hell fund should be someplace like a money market fund that will be available on short notice without the worries of having to sell an asset, such as shares of a stock, in a market collapse. You may not make any significant investment return on your go to hell fund but what you give up in interest income is worth it in peace of mind. This simple step of building a go to hell fund will keep you out of credit card debt and empower you to build your wealth without interruption when the unforeseen becomes reality.
When you have a well funded “go to hell fund” you never really go to hell. You can live in the heaven of financial security and sleep well at night.