Business
Here's what you need to know to determine how much cash you actually need on hand — and what to do with extra funds if you have them. Most people think you can't have too much cash on hand or in the bank. Cash is king, right? Cash is safe! The reality is holding too much cash comes with its own set of risks, and you might actually be losing money because of it. Today on the podcast, we explain: The formula to use to determine how much cash is appropriate to keep on hand How we chose the exact amount to keep in our emergency fund (and why it's pretty low) Why too much cash can pose a risk to your long-term goals The cost of waiting to get your cash working for you as hard as you worked to earn it Why right now (or when markets are dropping) can be a great opportunity for long-term investors who have extra cash to invest How loss aversion can stop you from capitalizing on wealth-building opportunities The perspective you might need to put tough economic times into a more realistic context (which is hard to do when you're going through it) The right way to deploy cash into the market if you have some extra, but feel afraid of investing when the market is dropping This episode will explain what you need to know so you can more effectively manage your money to grow your wealth.