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Showing posts from October, 2014

Financial Power and the Importance of Reserves to You

There are two reasons that make financial reserves important to you. One reason is defensive the other is empowering. Defense for an Emergency When traveling through remote areas you probably like to keep plenty of gas in your tank as the next gas station might be many miles away. It works the same way with money. We never know when we could suddenly lose an important source of revenue like your job or an important piece of business. So it is the course of wisdom to save up money, a reserve, just in case you need it when the unexpected happens. The standard recommendation use to be to have at least two months of reserves in the bank. But the world has changed and you may need to have more than two months. Consider your situation and have a plan in place for what you will do if your cash flow dries up. How much would you need until you can land another job or get enough additional business to replace the cash flow? These questions should give you an idea about how much you need. Power to a…