Home | Contact Us | Mortgage Market Update
MEAD
Mortgage Planning: Step 3
Liquidity
Step 3 is to accumulate "one year's salary". We are talking about big bucks here. This is not retirement savings but true liquidity. This is money that you can get your hands on for two primary categories of reasons; good and bad. An example of a good reason would be business or investment opportunities. Most of the time you are presented with an opportunity there is an upfront capital/cash requirement. If you have the money, you at least have the option of taking advantage of the opportunity. An example of a bad reason would be major interruptions of your income. This would include health issues, job layoffs, or any economic downturn that is beyond your control. FYI, the number one cause of home foreclosure is disability.
You can see that if you had no debt outside of your home mortgage and 1 year’s salary saved in a liquid, safe, diversified place, you would have gone a long way toward reducing or eliminating the financial stress in your life. You would also have choices that most will never have. You will be able to make decisions, both major and minor, without having finance as your number one consideration. Where would you work or live if money wasn’t a factor? What would you do with your time? How would your relationship with your spouse change?
Click here to continue to Step 4...
Copyright © 2007 Mead/Taylor Financial Group