Tuesday, April 16, 2013


"Time and unforeseen occurrence" catches up with everyone now and then.  As in the case of my heart problems over the past couple of years.  Aside from one of the best cardiologists in central Missouri, having a "cash cushion" helped get me through the tough times.  As it turned out, the amount I'd set aside in cash was not quite enough, but it went a long ways towards keeping the lights on and the wolves from the door, giving me time to get my health and my finances back on track.

How much should a person save?  A standard recommendation is 10-20% of your income.  However, the truth is, everyones' situation is different.  Whatever dollar amount you decide on, remember that saving something is the most important goal.  Even if it's as little as $20 per month, it's establishing the habit of saving that's most important.  Once you've got that down, it's much easier to work towards a specific goal.

Now that I've got my base portfolios in place, one of the things I've done to make more cash available is to delay investment of contributions and keep more cash in my interest bearing account with my online brokerage.  Should the need arise, it's readily available for transfer to my savings or checking account.  Each quarter the money is automatically invested in more stock to build my dividend portfolio.  For the time being, I'm having all dividends in both accounts re-invested with the goal of building monthly cash flow as rapidly as possible.  By the end of this year, I'll change my taxable account to pay all dividends in cash and build additional cash reserves in my interest bearing account. 

It has been a rough few years for us all.  No one knows what the future holds in store, but it's a sure bet that future will be just a little brighter if we all make an effort to put a little extra away for a rainy day.

No comments: