You are certain to experience a cash crunch in your personal live and in business at some point.
That is where having a safety net and cash reserve becomes important.
Transcript:
What if the projections don’t pan out? What if the deals don’t close on time? What if there’s a personal emergency? Those have happened to us many times before. This is why we need a safety net and cash reserves.
What are people who have mastered their money doing, right? They have a safety net, and they have cash reserves, especially more during times like this. We’re still in kind of uncertain times with the illness going around, great. It’s an investment in your peace of mind. In the beginning, I didn’t really like having a safety net.
I wanted to like invest it all the time. But at some point in the business, there was a time where we had like a cash crunch and, safety net actually saved us because otherwise we would have had to borrow like a lot more money and a lot higher interest rate and it was just so stressful.
That I know, it doesn’t sound very sexy to have six months or more of your expenses in a liquid account, you can access right usually that’s a bank account, or maybe life insurance or a line of credit. But that investment in your peace of mind is so so so important. So you don’t make decisions out of fear and decisions out of Oh, like, I’m scared that I’m going to lose everything because I don’t have the money to like pay this mortgage or pay this loan.