Don’t Put Your Financial Eggs In One Basket
We’ve all heard the statement that you should put all of your eggs in one basket. You can expand this a little bit and say that you should also never put all of your financial eggs in one basket. You should not rely too much on one income source. You should not rely too much on one person, company, or thing that provides you with the cash to survive. Something happens to your one source, and you are out of luck!
So, what are some examples that you should think about to begin making better decisions about where you put your finances? Relying on work income is excellent until your one source of work is gone. Relying on government money is fantastic until suddenly you don’t get your check.
And building on the stock market as a way to save your money seems like a superb use of your resources until something goes wrong with the few stocks that you have all of your cash invested in. Those are just a few examples of relying too much on resources being in one place.
Relying on Work Income
You work hard at your job. They pay you for that work. But relying on income in certain situations makes less sense than in others. For example, if you’re used to living at a certain lifestyle, and then suddenly something happens at work, and you’re forced to rely on Workers Compensation cash, that can be a drastic difference from what you’re used to. Reasonably thinking, one should not have to rely on any kind of money that comes out of an accident or an unfortunate incident in our lives. While it is understood that not all people are capable of saving up a huge amount, a small amount set aside every month could make a big difference too! It is a big gamble to depend on something like your workers compensation insurance to come in to have a certain amount of bank balance. Thus, if you don’t have money saved and you don’t have some other way to get income, a downward spiral can happen before you know it.
Relying on Government Money
The same goes for relying on government money. Especially past a certain age, you expect Social Security checks. But several things can go wrong with this Social Security expectation. What if your check gets lost in the mail? What if there is some computer error that needs to get dealt with and you miss a payment? What if the government runs out of money? Relying on the government entirely puts you in a very precarious position.
Relying on the Stock Market
Do you invest in the stock market? If so, how diverse is your portfolio? If you only invested heavily in one or two things, what happens when those two things do poorly? You need to expand your options when it comes to investing because fluctuations up and down can be mitigated as long as you have enough money and enough different places.
Putting too much into a single company or even a single industrial sector means that you can lose a whole lot quickly without being able to stay away from the rest before it’s too late.