Quote:
Originally Posted by Neil B
Are you saying you don't believe in the concept of a guaranteed, low-interest fund even for people who don't need an emergency fund? I'm assuming this applies to a person who can meet their current obligations WITHOUT employment or having to pull from their other investment buckets.
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Well Neil -- the biggest statement in here is that everything in investing "needs to be adjusted to suit the needs of the individual investor". So a guy that has no bills - has plenty of income - has plenty of cash -- is an entirely different scenario than someone that IS NOT in that enviable position.
Personally I ALWAYS have a buttload of cash on hand. Cash is king. It allows me to buy something on a moments notice and NOT have to sell something in order to raise the cash. A real life for instance.... happened in the last week... my brother in law wants to buy a 4,000 square foot building - it's brand new - bank owned - cost 600K to build in 2010 - bank is asking 450K - I told Jay to offer 300K all cash close in a week... their counter was 335K --- BAM - Done deal. I'll carry that paper for 6%. What I DID NOT have to do was fret over what to sell in a down market - so I did NOT have to take a loss on something in order to take advantage of this "deal". I'm in a completely different "place". But it's still the same thing with different zeros... Maybe a little cash stash comes in handy to buy tires that are on sale and you need.... or whatever. The statement "you can never have too much cash" --- is only true for a guy that only has $500.... because cash doesn't make any money at current rates. But having "some" is always better than not. It just has to suit your comfort level. The rest should be making you money.
Think of money as employees -- every dollar is ONE employee.... they need to be WORKING to make you some money. Some of them are slackers - some need to be re-trained (sold to buy something else) and some are truly in a league by themselves (keepers). BUT YOU NEVER GIVE 'EM A DAY OFF IF YOU DON'T HAVE TO!
