In today’s busy world, you might often feel like you’re drowning in responsibilities to your family, coworkers, clients, and even your neighbors. There’s always someone or something saying you ought to be doing something.
Some people are concerned about spending their extra cash, while others are concerned that they’re not investing it. In either case, this situation can easily be avoided through a simple process that makes your cash work for you.
Having more income than you spend feels good, yet it’s crucial for us to recognize that this is, in fact, necessary. If you ever want to spend any time without income in your life – whether it’s retirement, a sabbatical, or whatever – then you must earn more than you spend.
There are three important factors when it comes to holding cash: Liquidity, Risk of Loss, and Yield. If you are comparing alternatives and are only looking at yield, you will be giving up something in the other two areas of Liquidity and Risk of Loss.
You’ve probably heard this one before, but let’s bring some reality to the topic of creating an emergency fund. An emergency fund is simply a pile of cash that we keep safe and available in case we need it.