A few things happened this week that reminded me of the importance of having instant access to cash, as well as thinking things through, waiting, and not being swept up by exuberance that can quickly build up and possibly wipe out our life's work. Allow me to share a few stories.
Be still to move forward
I saw a car parked up at a prime spot for an entrance to a mall - the driver waiting patiently for a space to free up. She had decided this row was where she wanted to be and was willing to stay put and be first off the block when someone left.
I wonder if she had also read - as I did years ago - that you're much more likely to get that coveted parking space if you wait rather than drive around on the hunt. We all know what it's like to have passed a row of cars - for the umpteenth time - only to see someone who's just arrived zip into a space that was vacated that instant.
I'm sure this approach is as applicable to other aspects of life.
So here's what we can learn: be still to move forward. Take stock of the situation you're in, decide what your aim is then figure out how you can be best prepared, or positioned, to make it happen. Think about where you're spending your energy and resources. Behave in a way that reflects your best interest and maximises your chances of achieving your target.
You know what you want. How can you make it happen?
A friend has been recounting her tales of being gazumped numerous times recently as she attempted to buy a home back in her native Egypt - the upcoming elections having instilled an air of positivity and hope for great things to come. And great things certainly have come to those selling property where my friends wants to buy. She was amazed not only at how prices were shooting up as she searched, but that places were being snapped up and cash was readily available to conclude transactions. My friend is rather depressed about it all.
Her aim is to secure her children's future. She believes that providing a roof over their heads is central to this. She lost her father when she was just starting university and carries the emotional scar of her family not having any safety net other than her father's earnings. She dreads her children being in a similar situation.
It's not the right time to share this with her, but being priced out of the market could be great news. If she had been able, she would have signed on a dotted line and become a proud and happy owner of a piece of real estate - and then what? The money in it would be frozen and not working for the family. Yes, its value might increase, but it might not. More importantly, is there a different way that they could benefit from the money that would otherwise sit in bricks and mortar? Has she thought through her options to secure her family's future financially with the resources she has available?
This is my takeaway: Think about what you want to achieve and work through the options. Be still in yourself - look into why you are making your "go to" decisions. Is there an emotional element at play? Talk things through with someone who will have a very different approach and delve into varying options. Figuring out how to achieve what you want is a journey in itself. Be open to ideas.
Cash is king
Someone I know got a call out of the blue from an alternative investment company - she is a client - they own land, plants trees and sell them (the trees) to investors. The company manages the farming as well as selling the produce. The punters own the produce and receive the proceeds of their sale. This company was helping a client offload hectares of coconut trees at the enticing price of 68 per cent of their current market value because the owner had overextended himself and needed to find money to pay a margin call that hadn't gone his way. The proviso for this seemingly amazing deal was that all monies must be paid up within eight days.
As I type, the transaction is going through and this person is soon to be the owner of hundreds of coconut trees that are expected to bear a return on investment of 30 per cent per anum over a 20-year period, with an annual payout, after four initial years while the trees are planted and nurtured. Not bad going.
And this is how it all comes together: imagine my Egyptian friend taking a big step back, buying into life insurance to ease her anxiety over her children's future, and putting the money she has in an investment that yields dividends every year instead of a stagnant emotional home for her children to inherit. She can then use the income from the equivalent of trees to buy a flat for her little ones. This can be rented out and working for her and her family. She will have achieved her aim as well as getting her money to pay out now, which feeds back into the loop of making her life better now and in the future.
I would hope that in doing this she wouldn't overextend herself and always have a cash buffer that can help her ride any stressful curveball life throws her way, as well as cherry-pick opportunities that will present themselves as she navigates a very different way of life to what she currently knows.
Be still. Move forward. Have cash.
Nima Abu Wardeh is the founder of the personal finance website www.cashy.me. You can contact her at nima@cashy.me
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