Anyone who lives below their means can do this. Not everyone can do that, but a substantial portion of people reading this comment on hacker news can do that.
If someone earns $50,000, spends $40,000, in four years they will have a year’s salary saved up. With that in the bank you have a fair margin of safety.
Most people don’t need a year to get a job, and can also reduce expenses in such a period. By doing so, you effectively buy freedom.
I’m guessing you wrote this because you are not able to have such a margin of savings. But I’m leaving this comment for the many readers who could do so, but have not arranged their lives such that they have it.
> in four years they will have a year’s salary saved up.
That assumes no unexpected expenditure though? Any medical emergency (and even a lot of non-emergencies) in the US (from what I've seen) would blow those savings quickly. Also car problems, child problems, storm damaging the house/apartment, any number of things can swallow those savings quickly and you're back to square one.
Oh right. I’m Canadian, so I forget how tied to their jobs Americans are.
Though the non medical ones you mention can generally be handled by insurance. That usually is not tied to work. If you have a year’s savings you can generally afford insurance.
Americans aren’t tied to their jobs because of health insurance. Anyone can purchase it on healthcare.gov.
They’re tied to their jobs because healthcare costs so much. It’s unaffordable to pay $400+ per person per month plus up to $8k for out of pocket max which resets every calendar year ($16k for family) without having a job.
The $400 per person is for a young person. It goes up to $1,000 per month as you get into 50s/60s. So if you’re being prudent and factoring in the probability of not having income in your 50s/60s (age discrimination, disability, obviated from automation, outsourced), then you also need to save to plan to pay at least $12k a year in today’s money plus out of pocket maximum.
> so I forget how tied to their jobs Americans are.
That's another thing - aren't most of them in at-will employment? Meaning they can be let go with almost no reason with no notice at any time. That's also going to put a dint in the savings.
You also have to factor in the effect on your future earnings of looking for a job while not having a job. You're bound to get lower offers (unless you can credibly give the impression of someone who's so wealthy that they never need to get a job). So even if you have a year's salary saved up and find another job within months, it could still be a big financial hit in the long term.
If someone earns $50,000, spends $40,000, in four years they will have a year’s salary saved up. With that in the bank you have a fair margin of safety.
Most people don’t need a year to get a job, and can also reduce expenses in such a period. By doing so, you effectively buy freedom.
I’m guessing you wrote this because you are not able to have such a margin of savings. But I’m leaving this comment for the many readers who could do so, but have not arranged their lives such that they have it.