Value of a Buffer

[FormerLurker]

I am having an interesting experience at the moment that has reinforced the value of having a buffer.

I recently purchased another property - one that soaked up all my loose cash causing me to scramble to pay deposit/stamp duty/conveyancing/pest & building reports and meet all my usual living expenses.

The thing I want to express is that it was unpleasant and stressful and to be avoided if at all possible......and that’s with me having a comfortable buffer I have fully paid off shares and precious metals that would cover all my expenses for 1-2 years (1 of normal living 2 if I'm frugal). Why scramble I hear some of you ask (I have strange powers allowing me to hear your future thoughts ) the answer is I didn't want to touch my buffer, my buffer is investments I'd rather leave doing their thing (hence my scramble).

Anyway this brief scramble brought home how unpleasant having to scramble without a buffer would truly be and so I thought since good lessons can never be taught enough I'd post another thread expounding how having a buffer is a very very good thing (and a necessity at least in my eyes).

SANF worth having at any price

 

[Bigtone]

couldn't agree more, unexpected things should be expected to happen at some stage and u need that buffer, unemployment, vacancies, insurance company not paying for property washed away, separation, odds r something bad will happen during ur investment journey.

going backwards for awhile is much better than having to fire sell everything in potentially a horrible market.

saw a lot of this in 2008 when margin calls etc, no buffer had to sell shares and homes with hardly any buyers, its ugly

 

[devo76]

Im also sailing a little close to the line with my current subdivision/build.the development of the block is coming from my buffer with just the build going on a loan at this stage. I may even need a little personal loan to see it through.
At the end i will see a good profit restoring my buffer and some but at the moment its not the best feeling. I have other cash buffers but they are not for investing. They are for general living.

So yeah a buffer is definately SANF stuff.

 

[buster]

Lurker, just wondering if you had buffers why the bank didnt increase your loan limit for a few weeks or give you a temporary unsecured loan, Maybe you need to look at changing your bank. I do this often, it is only a phone call and an explantion of the situation.

 

[FormerLurker]

Lurker, just wondering if you had buffers why the bank didnt increase your loan limit for a few weeks or give you a temporary unsecured loan, Maybe you need to look at changing your bank. I do this often, it is only a phone call and an explantion of the situation.

Probably because I didn't ask - even with the purchase it was within budget however then had some unexpected expenses pop up hence the scramble to avoid touching buffers.

But not a bad idea if I ever find myself in a similar situation. Another idea that occured to me was to see if I could defer loan repayments for a month but thought I'd scramble and see what happened

 

[investor2009]

Good post. I concurr.

My buffer has shrunk recently and I seem to fre about it a little, if only because it's not as big as it was before.

It will get back to the usual balance by the end of this year though.

I like to have at least 3 months of living expenses in cash (where I am currently) but used to have 8-12 months, this may be exentric to some, living on the edge for others but I feel good with this, and like Lurker said, there is capital to eat should things ever go really bad.

 

[MarkandTina]

I love my offset account.

 

[FormerLurker]

I love my offset account.

I think that's illegal in some countries