After watching that apprentice episode yesterday and how so many people went from rich to poor it just made me wonder the type of standards most people have when it comes to having a certain amount of money saved up before spending as if money was no object. Itâ€™s just kind of hard to believe that people who make say a six to seven figure income a year could just lose it all even if there is say a recession.
For myself I would almost be inclined to say that unless you have a significant amount of savings like say $750,000 to $1,000,000 I wouldnâ€™t even fathom the thought of say buying cars left and right or houses at multiple locations. I guess that just goes back to my thoughts on how you shouldnâ€™t base your purchases too much on incoming income as technically you donâ€™t have the money yet. I just feel it is a bit risky as you are kind of setting yourself up to crash and burn in situations such as a recession or if you are all of a sudden unemployed.
For a more everyday scenario like say buying expensive TVâ€™s or devices, I always felt that based on the cost of various items you should have at least $15,000 in savings before even trying to get too many luxury items. That way you have a very good nest where if all of a sudden you lose your income source that should give you an ample amount of time to still maintain your lifestyle and at worst it gives you some very good breathing room to start cutting back if you all of a sudden cannot realistically afford these items anymore.