How Is Your Emergency Fund Holding Up?

By
Real Estate Agent with RE/MAX Dallas Suburbs TX Broker 0513551

Rob Minton recently published the results of a survey he conducted in an article titled, “Survey Results: Average Agent is Headed for Poverty in Retirement.” While Rob focused on many facets of financial planning, I took note of the results of question number 5 on his survey where he asked agents if the have an emergency fund.

How Is Your Emergency Fund Holding Up?

The results of that question were:

33% I don’t have an emergency fund
10% Emergency fund to cover 1 month of living expenses
20% Emergency fund to cover 3 months of living expenses
37% Emergency fund to cover 6 months of living expenses

Given the state of the economy, I actually thought the results of this question were better than I expected. Many of the agents I speak to are pulling money from their emergency fund in order to stay in business. It’s not just the new agents, but many of the top producers are feeling the strain of the economy.

I spend quite a bit of time with other small business owners and the general consensus is that many of them are “treading water” just trying to keep their businesses profitable.

I noted that the National Association of REALTORs® is projecting a steady rise in real estate sales over the next few years, but the recovery is going to be slow.

How’s your emergency fund holding up?

Tom Branch, Broker, CDPE, SFR

Source: http://www.thebranchteam.com/wordpress/2010/12/19/how-is-your-emergency-fund-holding-up/

 

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Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton.  While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure.  Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.

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Rainmaker
1,402,703
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Experienced long-terms Realtors know that real estate runs in cycles. Frankly, I don't think a 6-month emergency fund is enough!

Dec 19, 2010 06:18 AM #1
Rainmaker
259,661
Kathy Denworth
Century 21 Schwartz Realty - Islamorada, FL
Realtor in the Florida Keys, Islamorada, Key Largo

I used to be part of the 37%, but after two sucky years and three weddings later, I now find myself as part of the 33%. Do you have a stat for those of us robbing Peter to pay Paul?

Dec 19, 2010 06:19 AM #2
Rainmaker
242,236
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

I heard something on the radio the other day about how little people save in general.  Alot of folks, not just Realtors, area going to be in trouble if they don't start doing some better planning for retirement.

Dec 19, 2010 06:25 AM #3
Rainmaker
1,256,796
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I'm in the 37% as I am on SS already and have rental property that shelters income I have coming in!

Dec 19, 2010 06:56 AM #4
Rainmaker
398,135
Mike & Cindy Jones
Berkshire Hathaway HomeServices Florida Network Realty - Jacksonville, FL
Real Estate - (904) 874-0422 - Jacksonville, Fl

It's amazing how an emergency fund will grow when you shed excess spending and eliminate debt.

Dec 19, 2010 08:24 AM #5
Rainmaker
221,358
Richard Strahm
American Foursquare Realty - Lansdale, PA
Lansdale and North Penn Real Estate

I'm surprised the largest group has 6 months of emergency funds!  I know I'm in the minority.  i keep at least 1 year's worth in my emergency fund.  I just sleep easier doing it.

Dec 19, 2010 09:31 AM #6
Rainmaker
226,045
Nick Good
The Good Home Team with eXp Realty - Plano, TX
www.TheGoodHomeTeam.com

I hold on to a year emergency fund.  When I first started I had one bad month that completely wiped me and fortunately I had the support and help around of family at that time.  I've since learned to put away money each time for a "just in case" moment, and I think new agents will learn that you don't spend the commission check until you get the check in hand!

 

How many agents do you know that have a big closing and they are buying things on credit and if that deal falls through then they freak out?

Dec 22, 2010 04:43 AM #7
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