Alan Weiss’s Monday Morning Memo® – 05/17/2021
I’ve helped a great many people improve their incomes. I’ve advocated “paying themselves first” as revenue comes in and establishing reserves. Depending upon one’s situation, there may be education, new houses, vacations, eldercare, weddings, philanthropy, and so forth in the future. And then there is always the need for funds to see one through crises, as we’ve recently experienced.
Some people who have been diligent with this practice have seen these reserves as “set in cement” and untouchable! They’ve saved six figures (or more) and refuse to touch the money, no matter what the exigency. It’s as though it’s art, or property, or some other non-liquid asset. When I ask some people in my events what they would do if they suddenly had an additional $500,000, quite a few say, “I’d put it in the bank and never touch it!”
There’s a difference between saving money (for worthy occasions) and collecting money (as if you’re accumulating art or fine cars). I don’t “collect” my cars, I drive them. I don’t “collect” money, I use it and leverage it.
Great generals have won pivotal battles by knowing when to commit their reserves. Alexander the Great, at the Battle of Gaugemela, held back his cavalry in reserve, using it first to deal with Persian flanking movements and later to exploit a gap in the enemy line and win the battle. When there is a turning point or a great threat, they don’t say, “Well, I can’t use those troops, they’re my reserves!” Reserves for what? If you lose the war, they’re pretty useless.
I’ve had people tell me they can’t invest in development with me because they “can’t touch their reserves.” Well, if you can’t invest in yourself, your “reserves” aren’t going to be of much help paying off the debts you never tried to prevent.
All the art of living lies in a fine mingling of letting go and holding on. —Havelock Ellis
Every man dies. Not every man really lives. —William Wallace