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>There's something to be said for having cash available - here and there, opportunities pop up for me that I can take advantage of. But, by definition, every t
by forgetsusername 11y ago
>There's something to be said for having cash available - here and there, opportunities pop up for me that I can take advantage of.
But, by definition, every time you take advantage of an opportunity, you sacrifice cash on hand. You can't always have cash on hand and always be able to take advantage of opportunities, unless you have infinite money. They are opposing forces; your money is either "in cash" or "in opportunities".
It reminds me of arguments to have "dry powder" to buy equities when there is a market correction. But that means you're sacrificing current returns for potential future returns, and unless you can anticipate the future market results, the results of the strategy are ambiguous.
- mod 11y agoWhat? You don't have to take advantage of every opportunity. I generally buy anything that sparks my interest, and manage to bank a lot more cash than I spend.
- forgetsusername 11y ago>You don't have to take advantage of every opportunity. That's irrelevant. The point is, strategies like, "always have cash on hand to take advantage of opportunities" don't really make sense, because the more you do of one means the less you can do of the other. This is economics in a nutshell; determining the tradeoffs between two scarce resources, in this case cash and "opportunities". The solution isn't "more of both" unless the resources are infinite.