Financial Freedom Friday – Emergency Funds


Hey everyone. Welcome back to Financial
Freedom Friday where we talk about tips and strategies to help you achieve
Financial Freedom. My name is Nate Scott. Happy to be here again with you. Today
we’re going to talk about emergency funds and specifically why you probably
ought to rethink where you’re holding your money. So if I went and asked an
average person where most of their money is held most of the time they say well
it’s kind of locked up here and there whether it’s invested in retirement
programs like 401k’s, IRA’s, or real estate or something. Most the time it’s locked
up somewhere and so they say well you know it would make sense then if all my
money is locked up here in these things that I should probably have somebody
that’s not stuck someplace because I want to make sure if a crisis happens,
that’s of course when the emergency fund is, I can access it. So you know you
talked to the financial gurus like Dave Ramsey or Suze Orman a lot of those will
say it’s good to have about six months of your expenses saved up and that’s
what they call an emergency fund so it’s definitely wise to not have all your
money locked up and so they’ll tell you maybe six months so something
drastic happens, financially, you’ll be able to cover the catastrophe.
Whatever it would be losing your job or something like that. So they say it’s
good not to have all your eggs in those 401K’s, IRA’s blah blah blah. Wherever your
money is invested in and have some in cash and I couldn’t agree more. I love I
think it’s vitally important to have money
liquid available to you that’s not at risk. I think it’s vitally important. In
fact, it’s not only important but I think it’s also it makes you feel good. In fact,
I just saw a study that said that people who had more money in their checking
accounts or savings accounts, liquid cash were financially, they felt happier. They
felt better about where they were than people who maybe actually had more money
but it was just stuck in other places. Like actually having cash makes
you feel good. Makes you feel confident. So I think it’s definitely important. The
problem is not having cash probably is not your emergency fund. The problem is
that we haven’t really thought to think outside the box when it comes to our
emergency fund. And so we’re just inside the box and I
honestly, to be inside the box and just regular bank accounts where most people
have emergency funds is costing you easily $100,000 or will cost you easily
$100,000 or more over the rest of your life huge money or saying and so that’s
what I’m here to talk to you about is that for most people the emergency fund
the key attributes are simply they’re just too simple once an emergency fund
needs to be safe and it needs to be liquid or easily accessible it’s gotta
be extremely liquid it’s got to be safe and so if those are really the only two
key attributes of an emergency fund is liquid and safety why are we only
thinking of bank accounts when we think of emergency funds most people that’s
the only thing they know so of course that’s what they’re going to use but if
you’ve been with us for any period of time you’ll know that a whole life
insurance policy built for banking the purposes we’re talking about can fit all
the criteria of being safe and being very liquid and I honestly I’m here to
share with you that it’s going to make you a couple hundred thousand dollars
more probably over the rest of your life by changing where you’re located at so
I’m just going to go and throw some numbers down for you so you can kind of
see what I’m talking about let’s just say that your emergency fund of savings
six months of your expenses up is like 40,000 to 50,000 dollars something like
that that’s what it costs you and your family to live for six months or so and
so we’ve got that nicely following the programs stuck in a savings account or
checking account ready to move at any point and you come talk to us you say
well that policy sounds really great for banking and you say well maybe I should
move my emergency fund into it so I wanted to share with you that over a
30-year period the numbers over a 30-year period of time let’s say we move
that money into a policy and use that as our new emergency fund instead of having
a checking or savings account that’s by changing where it was at without taking
any additional risk and without losing any liquidity
whatsoever you are able to earn it’s somewhere between 100 to 150 thousand
dollars that you would really be missing out on over the next thirty years if you
just kept the emergency fund where it’s at not only would you be out 100 grand
150 thousands or more depending on how big your emergency fund is and how long
your time horizon is but you also by switching we get a death benefit to boot
kind of like an added bonus not only the cash but man if that doesn’t make you
cringe I don’t know what will so I encourage ment to you today is to really
reconsider what you’re doing with that liquid money with that emergency fund
money and instead of just having it sitting around in a bank account earning
essentially zero maybe we oughta as long as it’s safe and liquid on a transition
out of it a policy fits every attribute that you would want an emergency fund
and can make you a lot more money so that’s my encouragement to you today is
really think outside the box you still need to have liquid cash I love liquid
cash but maybe reconsider where it’s at and remember if you don’t build your
financial freedom nobody’s going to do it for you
let’s get to work we’ll see you next week

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