Rustico, based on sdcellar’s #, you’ll be losing 3900/year. That would take many years for you to go bankrupt. It would take 102 years to erode your $400k principal IF the savings rate doesn’t change. So I don’t really get your point. At this point with the flatten yield curve, I don’t see the big advantage in CD since money market and online savings yield about the same with no penalty.

The heloc or mortgage money in cd’s would be for very good equity positions and possesion other assets and at the very least non-employment income to cover.

Isn’t this what I’m trying to say? I’m confused.

One other question about HELOC. If let say you have 400k equity in your house so you open a 400k HELOC and the property dropped by 400k, can you still withdraw from that HELOC?