Why You Should Always Have Cash
Cash is king! Especially in an economic downturn. Everyone is aware that cash is making basically no interest right now. If you account for inflation, you're literally losing money by having cash, but not every dollar needs to be invested.
Overtime I've worked with hundreds of clients and businesses around Pittsburgh. The one thing I've found consistent with them as well as myself, is the need to have cash on hand. Whether you are working as a teacher, or a serial entrepreneur, life is going to happen. You are going to have a bad month.....or year, your car is going to get a flat tire, the roof is going to leak, something is going to happen. This is just life and you can't avoid it. The absolute worst feeling in the world is experiencing that, then also wanting to be sick because you have no money to pay for the event.
It is crucial to keep an emergency fund on hand. If that means not eating out, do it. If that means not buying new clothes, skip the mall. If that means no vacation, who needs a sunburn anyway? It is very important to keep funds available for when times are bad and you need to get out of a bind. Knowing you can pay for what life throws at you can seriously reduce stress and make you more comfortable with your finances.
Now on a brighter note lets talk about opportunity. The other reason cash is important is when everyone is selling and the economy has a downturn, people are fiending cash. Property owners will sell for pennies on the dollar, investors in the market are dumping stocks, lenders want paid back, everyone is frantic for cash and will act irrationally. This is the absolute best time to have cash. You will be one of the limited few to jump on massive opportunities and buy fantastic assets at a discount. You can generate an income, or wait for the next market cycle to hopefully reap massive gains.
While no one is getting rich by setting cash in their savings account, there is a legitimate need for cash. Not sure what the correct amount is for you? Give us a call!