Cash is king in a recession; leveraged to expand its purchasing power can result in long-term wealth creation. Finding oneself with hefty savings in this “re-section or re-cast” (terms coined to address a job-less recovery based on technological efficiencies driving corporate growth) period, can be easily compared to a lottery winner; questioning how to preserve it, how much of it to spend and how much of it to keep.Make yourself comfortable by satisfying your basic needs. Shelter, the most basic need, does not have to be expensive as you can reduce the operating cost by sharing the expense. Investing in a guest house or renting accommodations can bring in income to offset the expense. The same premises can house a restaurant reducing your food bills. A vehicle sale, rental and repair shop strategically located on the same property will also reduce your transportation cost. And if these and other basic operations are well managed, you can find yourself in a comfortable situation for the rest of your life.
Write or get help in developing a strategic plan which maps out your responses to all foreseeable issues. As in all cases, having a plan is better than making it up as issues arises, writing it down helps you to think and focus issue by issue, amount by amount but mostly it forces you to budget for each and every issue. Taking some time off and away from daily activities, in a quiet setting to reflect on, write down and budget, is strategic planning. You may need professional help; do not think how expensive that could be, think how much years of education and experience you are buying and the resulting financial savings as compared to planning it all yourself.
“Send me a proposal.” will become your standard reply to family, friends and investment bankers as they target your money. Do not waste time; trying to find out how they found out about you, just set up a mailing address to receive proposals and send polite standardize replies. Categorize proposals by sector and industry, in ascending order by net asset size. If you already prefer a particular sector; Do Not Read those proposals, because this is about finding the best use of funds, not hobbies to occupy your time. Writing notes on each proposal is like a teacher grading exams; grade the management, the access to markets, pass performances and the quality of assets.
Do not buy, invest. Investing is a new and different mindset than buying, the best way to explain the difference is by comparing buying a property to live-in or to generate rental income. The expenses associated with its upkeep are viewed as essential to your home but an inconvenience when tenanted. The objective is returns on investment not personal comfort.
Most importantly, is to find a professional advisor that you TRUST and pay them to keep you focused on the strategic plan and to protect your interest.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
