3 ms·
Cash-poor stock-rich is the current measure, .. More accurately, that should be 'Cash-poor, asset-rich'. Assets are not just stocks, but also real-estate, prec
by simonblack 4y ago
Cash-poor stock-rich is the current measure, ..
More accurately, that should be 'Cash-poor, asset-rich'. Assets are not just stocks, but also real-estate, precious metals*, commodities such as copper, wheat, etc.
*Gold as normally looked on as a 'store of wealth', not an 'investment'. It has been traditionally looked at in the same way as a permanent form of cash, rather than as a commodity like copper, or iron, or other metals.
Spare cash lying around is 'lazy money'. While it's good to have some cash on hand, it's poor investing to keep a lot of cash lying around. How much cash you have on hand is a function of your wealth-level. Some of us can get a bit twitchy if the cash(plus gold) levels should go down under a couple of hundred thousand or so. Your assets should be out there working, and bringing in more money.
Stocks are only one form of asset. And most people use them wrongly. Many people people chase the share-price without bothering about the company's fundamentals which is where real investing is involved. 'Trading' is merely another form of gambling. You do 'trading' for fun, not for investment, and you should be willing to lose all of that money if it be.
A good rule-of-thumb for an asset is that you have to be able to hold it in your hot little hand or at least touch it. Anything else is just numbers in somebody's computer and that can be taken away from you in the blink of an eye. (Or even when the power goes off.) Oh, and there's nothing 'safe' about a Bank's Safety Deposit Box. If they hold it in their Bank, it's theirs, not yours.
One last thing. Get rid of the debt. Pay off your mortgages as soon as possible, within months rather than years. Keep your Credit Cards in a positive balance rather than in debt, so pay them off entirely at the end of the month or even more often. I consider it a failure on my part if they get into debt at all. Online banking is your friend.