Your Personal Cash Position: Definition…How much cash you have EASY access to in 36 hours or less.
During times of anxiety and crises, it is REALLY important to know how much cash you and your family has access too. We generally all go through life thinking that we will always have quick access to our bank accounts, credit cards that will always be accepted, stocks we could sell, home equity lines we could tap, etc.
I’m here to tell you though, that this is NOT always the case. Recent events have proved this much. Case in point:
- In the last 6 months, there have been bank branches in the UNITED STATES that have closed their doors because they literally had No More Cash for their customers to withdraw.
- I have a personal friend who had his credit card company simply “shut down” his account. This required him to continue to make his regular payments, but allowed him No Access to additional credit. A card he used for years was simply “shut down.”
- I know of people with significant stock positions in Lehman Brothers. A month ago they would have expected to be able to sell shares and get a check within a few days…now if they sell shares, they probably will not have enough proceeds to cover the brokerage commission.
- IN MY PERSONAL LIFE I have a small Home Equity Line of Credit (HELOC) from a local bank. I have a credit score over 750 and have NEVER even used my line of credit…I’ve always had it there in case of an emergency. A couple of months ago I get a mysterious letter from my bank letting me know that they will be closing completely my Home Equity Line unless I respond in writing in the next 36 hours. I’m very glad I read that “junk mail” and was able to save my Line of Credit!
My point is that the world of personal finance has become extremely complex and fast paced. PROTECT YOURSELF! Take steps today to ensure easy access to cash in the event of an emergency.
If you live in Houston, Texas you clearly understand what I’m talking about. After Hurricane Ike hit, you could not buy or sell ANYTHING with out good, old CASH. Cash was king and everything else was off the grid…just like the electricity!