The truly wealthy people are pretty broke most of the time. They spend their cash on inaccessible or illiquid items as they strongly believe that having too much cash on hand is essentially losing money everyday.
Benefits of being broke
- Putting excess cash to work
- Grow your wealth
- Reduce chances of spending on the unnecessary
- Predetermined credit card limit will cap monthly expenses
Risks of being broke
- Need some time to gather cash (a huge sum)
- Net worth is just a paper value that varies with market / economic condition
- Putting too many eggs in one basket
- Credit risk of defaulting debt due to cash flow issues
Get broke to be wealthy, by locking your cash up forces you to save to invest. Start early on your financial planning and real estate growth plan. Take baby steps and always look forward to achieving your goals!
So would you rather be broke or not? Let me know your views in the comments section below.