Do you have enough cash in the bank that you feel safe and secure?
Having enough cash in the bank is a margin of safety. The purpose of the margin of safety is to protect you against any forecast or economic downturn we will face in the future in America.
If you are like me you lived through 2008. It was a struggle for me because I had no margin of safety in the bank. I had $300 in my account. The job market crashed so did everything else including people’s retirements. It vanished overnight. There were many sleepless nights trying to figure out how we pay our bills.
Right now, the US housing market is on fire! Prices were just reported and we are up 25% from last year.
That means if you had a $400,000 house in 2020 it is now worth $100,000 MORE! That is real money but, can only be realized if you sell.
Here is a strategy that many of our clients are using to protect themselves. The goal is to have 12 to 24 months of living expenses in the bank. We call this margin of safety.
Living expenses are ALL the expenses you need to live the way you live right now. Mortgage, cell phone, food, entertainment, etc!
If you own a home your margin of safety is in your home. You need to pull it out.
Step 1 – List your home on the market at a price that allows for you to pay off your mortgage and have enough left over for…
Step 2 – A down payment on your next home. Use a portion of the proceeds of your sale as a down payment on your next home. If you have over 20% down no need to put more down.
Step 3 – Pay off any high-interest credit cards, loans, etc.
Step 4 – Put 12 to 24 months of cash in your bank. This will keep you safe and secure for when the market adjusts.
E-mail me your address, If you want to find out if you have enough equity to put 12 to 24 months of cash in your bank account.
For an online value CLICK HERE FOR ONLINE VALUE
It will ask you for your information. It is 100% secure and confidential.
Nick McLean Real Estate