1. Briefly, you’d want to establish some minimum amount to cover emergencies (maybe $10-$20k), because the opportunity cost of not having available cash to deal with an emergency is huge. After that, I’d recommend paying off the debt if you think you’ll almost certainly pay it off eventually (rather than declaring bankruptcy).
2. I guess that would be like an investment that’s risk-free, but sometimes the money you want to invest in it gets stolen. In any case, my model is about debt/investment trade-offs, not about dealing with scammers. Don’t pay scammers, that’s the only model I have.
3. I think it’s quite useful to assess an actual probability of you declaring bankruptcy, perhaps by multiplying the chance of you not having enough income to cover living expenses over some time frame. I think income also matters a lot more for debt repayment than assets, let alone liquidity.
1. Briefly, you’d want to establish some minimum amount to cover emergencies (maybe $10-$20k), because the opportunity cost of not having available cash to deal with an emergency is huge. After that, I’d recommend paying off the debt if you think you’ll almost certainly pay it off eventually (rather than declaring bankruptcy).
2. I guess that would be like an investment that’s risk-free, but sometimes the money you want to invest in it gets stolen. In any case, my model is about debt/investment trade-offs, not about dealing with scammers. Don’t pay scammers, that’s the only model I have.
3. I think it’s quite useful to assess an actual probability of you declaring bankruptcy, perhaps by multiplying the chance of you not having enough income to cover living expenses over some time frame. I think income also matters a lot more for debt repayment than assets, let alone liquidity.