If You Can’t Buy It Twice, Don’t Buy It

And other practical money business advice

Saving money is always a good idea, especially in these uncertain economic times. Of course, you’ll always hear people tell you that money that sits in a bank account is “money that sleeps”. That it’s useless and should be put to use in mutual funds, real estate, the stock market…

The truth is, in times of crisis, cash is king, specifically because a lot of people are bleeding money. Cash might fluctuate in value, it might not make you more money when it’s just sitting there, but whether you’re an entrepreneur, a small business owner, or the CEO of an S&P500 company, having cash at hand is always better than having no cash at all.

As an individual, you need cash to invest. If you want to buy a house, for instance, the bank will not only look at your credit score but also your liquidity (which are correlated). The same goes for consumer loans around buying a car, a motorbike… The more money you can put up front, the more you can borrow and own.

When you’re a business, most investors won’t care much about your cash reserves, they want to see a profit. And you know what profit is? It’s cash, customers send money to your bank account. And if you spend that money faster than you earn it, your creditors are not going to be happy. Cash is…