Last month’s global Windows outage, which took many businesses offline, is a great reminder of how sensitive computing and the cloud can be. You would think that something that prevented people from corresponding via email and incapacitated Delta Airlines for days would be a malicious virus. But that was not the case. This was simply a software update containing an incorrect code. Something so simple did so much damage!
The Wisdom of Emergency Funds
I often discuss the wisdom of creating a robust emergency fund with clients. An emergency fund is an account with some cash (or cash-like) savings. The idea is that if an unexpected event took place that required a significant cash outlay (new roof, medical bills, unemployment, etc….), you wouldn’t need to sell your investments to take care of yourself.
But after what happened last month, I also believe it is important to establish a “Cash Stash”—the physical currency you keep at home that can be accessed anytime.
Creating a “Cash Stash”
Let’s say something like this happened again – whether due to a faulty software update or a purposeful cyberattack. What if it affected electronic financial transactions (debit card, credit card, ATM)? In that case, having a few $20 bills at home could be worth more than $20. The grocery store or gas station may not be able to process a credit card transaction, but they may still be able to transact in cash.
Prudent financial planning is not about trying to control or guarantee outcomes – as much as we wish we could. It is about anticipating what could happen and taking action to ensure that we would be okay if it were to happen.
In financial planning, like insurance, we don’t hope negative things will happen. But when they do, we will at least be prepared for them and in a better place than if we had buried our heads in the sand.
Stay relentless,
Scott
Investment Advisor Representative of and advisory services are offered through Independent Wealth Network, Inc. a Registered Investment Advisor. Anthem Financial is not affiliated with Independent Wealth Network, Inc. Anthem Financial does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstances.
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