A couple comments… One, its *very* easy for someone, even with a good career and spending habits, to have savings wiped out due to a significant life event. For me, it was a few bouts of employment. My brother, it was some legal trouble. Two, as everyone here may have noticed by now, RE prices have been outpacing salary growth by leaps and bounds in SoCal. I'm a great example, I only make a few K more annually then I did when I moved here in '99. So there is the perception that one is 'priced out forever', so why bother saving. As an aside, I think the flat this has led to something a friend noticed in SoCal, he referred to it as a land of 'perpetual adolescence'. I know many people in their 30's that are single, renters and spend a good portion of their income in the bars/clubs of Southern California.
There is an important lesson to be learned here.
1) You need to become friends with at least 1 lawyer who's knowledgeable in asset protection.
2) You need to buy as much liability insurance as you possibly can for as many reasons as you can, for as much as you can afford.
I see so many people that are waiting to get wiped out because they decided to buy the cheapest insurance they can get a hold of, even though they can afford more. There's absolutely no reason why any homeowner with sufficient equity built up shouldn't buy the highest auto/homeowner liability coverage AND an umbrella coverage on top of that that they can afford. We live in a litigious society, particular in so cal.
And to my understanding even your primary home is not safe from liability litigation in California.
