How much cash to keep in the bank?

[G-Man]

The supreme irony is that, despite today being a douchebag parade new member-wise, this could turn into a useful thread

Also, @MJ DeMarco when I made my intro post that I walked out on a job after reading the book, it was one of the most liberating experiences in my life.

When I make the final "F*ck you, go F*ck yourself" walkout I'll be sure to document it here. I'll buy you a drink. I wouldn't right now, and it's not because you don't deserve it, but I can't very well celebrate a mission that is as yet incomplete.

@Vigilante is getting all my rep though. Maybe @amp0193 That dude is already doing what I hope to do.

Hot damn I love this place.

 

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[c_morris]

The supreme irony is that, despite today being a douchebag parade new member-wise, this could turn into a useful thread

Yes. The OP, though unintentionally, actually made a contribution.

 

[theag]

Did you somehow get an advance copy of my upcoming kids book?

Sounds like you're aiming to dirty kid's minds with this non-working fastlane BS even earlier! Shame!

 

[luniac]

Jesus Christ, it was just a question, why is everyone so rude here?

Noone was being rude to you.
If you think the responses were rude, you have no idea how rude people can be.
The responses were curt and to the point, it doesn't get better than that kid.

p.s. didn't realize curt means "rudely brief"... LMAO

 

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[Argue]

Keep learning and stay humble.

Humbleness is the best policy.

 

[policebaton]

Tis just a lesson you gotta learn man.. now with the power of the internet if you don't use it to your advantage to learn, and then ask dumb questions you'll get dumb answers. Just like in sales, I learned if I cold call a prospect and either ask "so tell me about what you guys do?" or if they ask me "do you know what we do?" and I don't have the answer... I am seen as a complete idiot and incompetent. No sale.

They say you have two ears and one mouth, but also add in there two eyes and two hands for internet research before you go and ask things. It's more than just dumb to ask those things... it's borderline disrespectful ><.

 

[minivanman]

I guess to answer your original question, I personally think 1 year of your HOUSEHOLD expenses should be in the credit union (no big bank for us). Actually we keep 3 months of that in our house. When I had my businesses we had 1 year of expenses. For my little business now, I have $2000 that always goes back in to the business. If that $2000 should run out I will buy me a souped up 3-wheeled bicycle and ride it for awhile.... but there really is no way that $2000 could run out unless some bad things happen in this world and at that point... there would be much larger things to worry about. I do have another $2500 fund for a newer work van if ever needed but that money is for a work van and nothing else. If the original $2k ever goes to pot I would not invest the $2500 van money in the business. Always be a CHEAP a$$ in business. If you have the choice of buying a $10,000 work vehicle or a $2000 work vehicle always buy the $2000. Save that money to spend on fun things. My favorite example of that is when I see another appliance guy driving a big box truck or 4 wheel drive with a 16' trailer. While they are paying for those nice trucks and for all that gas, I get 24+ mpg in my $1300 minivan. This one guy thought I was broke so he was telling me how I could FINANCE a trailer. lmao Learn to set your budget for things and stick to your budget no matter what. There is a PERFECT online FREE budget tool but I don't know if I can post the link or not. Good luck!

 

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[luniac]

also u called a military and forum veteran an idiot...
thats bad karma.
in some other place ud get banned for that, and beat up in real life.

 

[biophase]

In the millionaire fast lane book MJ says about only buying Lambourghinis etc... when you can buy them easily, so for example if you go to buy a pack of gum you wouldn't even need to think about whether you could afford it or not.

To do that however you would need a lot of cash but I had always assumed that you are meant to always invest most of the money you earn? Any help to make it clearer to me?

Thanks a lot

I will answer this question for the OP. When I go to the store and want a box of cookies, I don't think about if I can afford it. However, it doesn't mean I have $4 in my pocket. I can just put it on my credit card.

When I go to a car dealer and buy a new car. I don't think about if I can afford it. I also don't have the cash in my pocket. I can just finance it. But I don't need to even think about if I can afford the payment, or if I need to sacrifice anything, or save more money.

Now when I get home, if I financed it, I can decide if I should pay it off, sell some stock, or move money around to pay it off.

The mere fact that you thought about having cash on hand that you should be investing means that you "thought about affording it" which meant that you can't afford it.

The reason you got so many harsh answers is because you asked a question that you shouldn't be worrying about now. Do a search for "What color Ferrari should I buy?"

 

[LuckyPup]

Jesus Christ, it was just a question, why is everyone so rude here?

People aren't rude, they just value their time and don't suffer fools.



Sent from my iPhone using Tapatalk

 

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[jpanarra]

Love this thread... So much Truth Bombs Dropped...

Now I wonder if OP will come back or he ran back to the family member and agreed to the slowlane mindset cuz the fastlane forum are 'meanies'

 

[pds]

OP, read MJ's books. The reason why people keep telling you this is because it all starts with a mindset shift... a rewiring of beliefs and a fundamental change in the way you think. If you've watched The Matrix, it's taking the red pill while everyone else is living life on the blue pill, brainwashed by the herd mentality.

In my opinion, you should never buy a lambo unless you can afford it outright and it doesn't cause a financial setback. Once you're in the financial position to do that, you can walk into the dealership and write the salesman a check for $XXXk to drive off in your lambo. This is the "F*ck you" way. The lambo is yours and you can do whatever you want with it. This is how MJ lives. When he found his dream house, he paid for it in cash, while his neighbors have a mortgage. In both cases, he doesn't have to answer to anybody.

Alternatively, if you are wealthy enough to buy a lambo and don't even have to think about the cost, but you have most of your money invested, those assets would be large enough to be spitting off cash to pay for the lambo.

 

[minivanman]

While that is all true, you should always have a budget. We have a $100,000 budget for the race car each year (varies from year to year). So we have to ask.... can we afford a new motor? Should we get the inside of the trailer redone? Now I could have set the budget higher but I didn't so we have to stay within my budget. Or on a smaller scale.... when I go buy milk do I just grab any milk? No, we have a grocery budget each month (everydollar.com) so I buy the cheapest. For years we bought the cheap bread and just a few months ago moved up to a higher priced bread. Once you have money and you lose your ego you look at things way different. I do agree about buying things without credit though.... I've never had a credit score.

 

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[JokerCrazyBeatz]

I love this forum i swear haha . This thread turned into a very hilarious and informative piece of content

 

[jpanarra]

I've never had a credit score.

Just curious why? Theres so many things you're missing out on if you don't follow your credit score. With credit and loans being aware with how much you borrow to leverage your investments you can get so much more in return if you use credit.

Credit is a tool and not a dangerous things you should avoid at all costs. Like all tools you need to know how to use it properly or it'll cut your finger off like an arrogant 16 year old kid in shop class. Maybe you're delaying your growth by not using credit?

If others want to input more on this topic im open to it as well. I'm a victim to my own education and experiences so maybe some of the wiser guys on here can give better advice.

 

[pds]

** double post **

 

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[jason91]

.

 

[pds]

I agree it's beneficial to have a solid credit score, but it matters more during down times in the economy. Having a good credit score will get you lower rates if you ever need to take out a loan for real estate, business, etc. Also, if you have a business where you need to purchase a lot of inventory or pay for advertising, it's a no brainer to use the card to rack up points. The points you get are an added bonus so you can travel for free, get perks, etc.

That being said, you should never get a credit card if you aren't confident you can pay your balance off in time.

 

[jason91]

.

 

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[minivanman]

At 18 years old I started out thinking that if I couldn't pay for something now, how could I pay for it in 30 days when I need to pay the bill? So I put myself in that type of mindset and haven't changed. Yes, we would get perks but we do fine without them.... kinda.... the little woman travels a lot for work so usually when we stay at a hotel we use her points. We are going to Destin July 8th and then to Hazard, Kentucky for a week or so and the hotels are all paid for with points. We rarely fly because we like to drive so I haven't flown in many years.... but that might change with all the traffic that is getting on the roads. As for some day in a down-turn needing credit.... it would never happen. I can't think of 1 thing in the world I would ever need credit for. I've lived through down-turns before and never needed it why would it change in the future? Could I get better insurance rates? Yes I could, but it won't happen. As for paying inventory or advertising... always paid cash (Even to large companies that didn't take cash from others. Hillyard for example, always paid cash. Yes, they bitched but always took it.). And actually I usually set my own price. I've never been one to go with the price they give me. I always use local and if they tell me something is going to cost $1000 you can bet I'll get it for $900 at most. When we go to a hotel and they say parking will cost $35 either Samantha or I always get them to give us a voucher with a little smooth talk. I am the only appliance guy to buy my units for less than 75% of what the other guys pay because I knew how to schmooze them... and I don't even buy very many a month to get a bulk type of deal and I get better than bulk. Real estate = cash or do not buy. I know there are a few perks here and there with credit but it's so easy just to use cash and never have to think about it again. I hate to use this line from the radio talk show but... how many millionaires have become rich by using their perks? I'm not one of those guys that doesn't 'get it' about the perks but like people on here like to say.... time is money so while the credit card user is paying his bill I was always spending that time making more money and now I'm spending that time enjoying my money

 

[MidwestLandlord]

Just curious why? Theres so many things you're missing out on if you don't follow your credit score. With credit and loans being aware with how much you borrow to leverage your investments you can get so much more in return if you use credit.

Credit is a tool and not a dangerous things you should avoid at all costs. Like all tools you need to know how to use it properly or it'll cut your finger off like an arrogant 16 year old kid in shop class. Maybe you're delaying your growth by not using credit?

If others want to input more on this topic im open to it as well. I'm a victim to my own education and experiences so maybe some of the wiser guys on here can give better advice.

At the very least you should watch your credit reports (not necessarily the score), to ensure there are no mistakes or fraud in your name. I've had 2 different debts put onto my name that were not mine.

Also, if you have kids...watch theirs too. Pretty common for ID thieves to use children's SS numbers for fraud, because nobody watches it.

But yeah, if you have high income, a good score, and good debt to income ratio, banks will trip over themselves to lend.

Lot's of hoops to jump through being "self-employed" though.

All else being equal, the banks consider someone self-employed to be riskier than an employee with the same risk profile in everything else.

As you said, debt is a tool like anything else. Most people use debt to CONSUME rather than increase PRODUCTION though. And that is dangerous. What is that debt backed by? Usually, it's your TIME.

With the exception of my mortgage, which is backed by my ability to earn income (my time), I never take on debt that isn't self-sufficient and produces income in excess of the liability.

 

[Raoul Duke]

Jesus Christ, it was just a question, why is everyone so rude here?

 

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[Sanj Modha]

I keep around $20,000 in my checking account and some in PayPal (not much though!). The rest is invested into other projects.

 

[GMSI7D]

but I had always assumed that you are meant to always invest most of the money you earn? Any help to make it clearer to me?

Thanks a lot

the only real investment that has potentialy infinite return in term of hapiness and survival

is investing in yourself ,your innergame and outergame


not investing in any busines system or anything

because a business system does not work in a down economy where you have to fight to survive

the economy will go down for sure and i don't care about people here shouting at me


the real investment that nobody can steal is your developping your new you

the you of the next level

 

[Lucid Tech]

Everything is perspective based on relativity. (And BTW, "bank" could mean cash in a money market account.)

Person #1 has a $100 net worth. All of it is in the bank.
Person #2 has a $10,000 net worth. $1000 of it is in the bank, the rest invested.
Person #3 has a $100,000 net worth. $5000 of it is in the bank, the rest invested.
Person #4 has a $500,000 net worth. $25,000 of it is in the bank, the rest invested.
Person #5 has a $1,000,000 net worth. $50,000 of it is in the bank, the rest invested.
Person #6 has a $2,500,000 net worth. $100,000 of it is in the bank, the rest invested.
Person #7 has a $10,000,000 net worth. $250,000 of it is in the bank, the rest invested.
Person #8 has a $25,000,000 net worth. $1,000,000 of it is in the bank, the rest invested.
Person #9 has a $100,000,000 net worth. $5,000,000 of it is in the bank, the rest invested.
Person #10 has a $500,000,000 net worth. $25,000,000 of it is in the bank, the rest invested.

In the money system I outline in UNSCRIPTED , banked money, the freedom of choosing to buy, is referred to as the "F*ck you pot".

Asset allocation is a very relevant and interesting topic for this forum. It would be pretty insightful to see where some of the more successful members here are storing their money. As entrepreneurs it's often going to vary widely from the standard X% stocks Y% bonds Z% real estate that you usually see recommended to slowlaners.

That said, this thread was just about the worst way you could possibly ask about the subject and expect a serious answer.

 

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[AgainstAllOdds]

If you have the choice of buying a $10,000 work vehicle or a $2000 work vehicle always buy the $2000. Save that money to spend on fun things.

I understand your point about budgeting and not blowing your money on unnecessary expenses, but this advice in a lot of scenarios is just wrong. Often times the more expensive work vehicle has some sort of value calculated into it.

Take for example the Mercedes Sprinter Cargo Van. These vans cost $45,000 with the extra features new. Compared to a $2,000 vehicle, it's really expensive. However, when you calculate in maintenance time, cost of downtime, etc., then the vehicle comes out a lot cheaper.

That $45,000 you're spending is set to run you 300,000 to 400,000 miles with proper care and maintenance. And because of that, also depreciates very slowly.

Now, add the fact that you can finance the vehicle over 5 years at 0% interest, and you suddenly have a work vehicle that doesn't tap into your cashflow significantly, and is reliable. Your business can operate at near 100% efficiency. True, the $2,000 vehicle is cheaper, but it's a lot more likely to break. That results in repair costs and downtime (which can add up to thousands if you're missing out on significant work).

 

[minivanman]

I've always had $2000 or less work vehicles and the only thing that has happened (1 time) is the fuel pump went out (my fault because I always run them almost out of gas). That's over a 20 year period. My friend Ray who owns a very large vending machine operation thinks like you and has new vehicles and honestly has more breakdowns than I've ever had. I see new vehicles on the side of the road every day.... lots of them. As for financing, I have no idea how that works, I've never financed anything. I started out with a '74 junk Nova and worked my way up with cash only. The way I see it, no one is going to die either way.... my way works for me and your way works for you. It's all good. But just for kicks.... I could buy 2 $2000 vehicles a year for 11 years for that same $45,000.00. My last van had 230,000 miles on it and the only reason I got rid of it is because the a/c kept going out. My current van has 160,000 and is going strong. 2001 and rides great. In 8 years I've spent $2000 with 1 break down = $21 a month.

 

[Aaron T]

OK, redirected here from another more positive thread.

Found this one informative and entertaining. So that was worth it at least.

I am not going to lie. I misread this horribly wrong:

@jon.a despite maybe being a little curt

After I did 2 times, I realized my mistake, laughed, and moved on. Personally curt or not, I think jon.a is probably just tired of this kind of shit. I lived long enough to not waste my own time anymore after a chance. Time is more valuable than to waste it on people like this.

 

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