By Tom Stadum

Read Time: 7 minutes

Welcome to Tired & Rich, a weekly financial newsletter where you’ll discover how money and markets work so you can find financial freedom faster.

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Next-gen investors building wealth in the decades ahead need a next-gen team.

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Hi Everyone, Tom here.

Thanks to everyone who responded to our poll last week. You all want the podcast (86.67% voted yes)!

We'll keep developing it and getting you even more insights on building wealth the right way, slowly. I included another poll below on the podcast—take a second to reply if you can!

Alright, that's it for the housekeeping.

Let’s get into how to grow your money faster by thinking about cash differently.

First time reading? Sign up here.

The Anxiety-Filled Question

Cash.

Everyone has it.

Some never have enough.

Some people are swimming in it.

And everyone has an opinion about it.  

The thing humans created to trade goods and services efficiently.

It's an economic miracle.

And what you do with your cash tells the story of your life.

• Where you eat out.

• What clothes you wear.

• Who you donate money to.

• Where you travel to for Christmas.

And finally, Target knows when you are having a baby before anyone else because you or your wife start buying pregnancy tests and baby gear.

Ah, life in 2024 - zero personal privacy.

But because of how personal cash is, people have wildly different viewpoints about how much you should have.

While you may be a "cash" person, your neighbor might be the opposite. Dave Ramsey says you should have 3-6 months on hand, while others may say you are dumb to have any because "gold is the way."

The range of opinions is as wide as an ocean.

This has created confusion because the answer to how much cash you need is straightforward.

You should have enough to cover whatever you want to do in life.

That's the actual answer.

But, it’s also highly impractical because no one can snap their fingers and have enough cash to do this.

But what happens when you have enough cash for your "emergency savings account" and need to use it for something else?

What happens when you are not in trouble anymore?

Both A Mindset and Reality - The Post "Emergency Fund" Era -

Here’s the secret, wealthy investors don't have "emergency savings accounts" per se.

They aren't sitting around figuring out their "rainy" day fund.

They don't have an account with exactly three months of savings for a "rainy" day.

Wealth investors got wealthy because they were good at using cash to invest.

Yes, they have cash, but it is just as much a part of their investment strategy as their spending strategy.

Cash is used for everyday spending, but it is also a tool for them to make more money by investing.

Cash becomes a lever in your portfolio that gets strategically pulled when great deals present themselves.

Cash gets layered into different fixed income assets to produce more income without significant risk of losses.

Cash accumulates when profits are taken in the portfolio.

Cash is used as a hedge against various risks.

All the while, it is still being used to pay for groceries, trips, mortgages, etc.

It’s a broader use of the tool and a far better use of it.

It's a complete paradigm shift from what's typically shared on personal finance websites, where cash management ends at the emergency savings accounts.

It’s the post-emergency fund era.

While I would not consider myself "wealthy," I remember the day I reached this, and it was a great feeling.

I was pumped because I knew our net worth would start to grow faster.

I was proud because of the sacrifices my wife and I made to get here.

Most of our clients at Fjell are here, too- where cash is used as a strategic tool for wealth creation and preservation.

This is where you want to get to as fast as possible.

To use your cash to make more money vs getting you out of trouble.

This is next-level stuff.

I can recall many conversations inside the walls of our offices, where a family comes to us saying, "What's next? I've got these assets and extra income, and I know I need to do something different."

Our team explains this concept and starts building.

Building the next phase of their financial lives with them, the post-emergency fund era.

This is what we tell them will start happening:

• Acquire assets faster

• Grow passive income

• Net worth expands

• Dreams become reality

• Confidence grows

• Stress levels drop

• Retire early

Conversations like this are always fun because, from experience, regardless of age, people are usually farther along in their financial journey than they think.

And they are pumped, just like I was, to start the new chapter of more freedom and less stress.

They leave the meeting feeling like champions, because they are.

Here's the deal—11,137 of you got this edition of Tired & Rich.

You are all in different places, but all of you are asking the same question.

How much cash should I have on hand?

And you all want similar things.

A nice life, with a high-performing financial life.

To be Tired & Rich.

It's taken my wife and me 12 years to get to where we are now- it was a journey filled with hard disagreements about spending, sacrifice, hundreds of monthly contributions, and, honestly, a lot of determination to get here.

But it's worth it.

And it’s a tipping point in your financial life.

Having extra cash to make even more money is like magic.

And fun.

Here's the takeaway for the week

1. Get into the mindset of the postemergency fund era.

2. Find out when you can invest your cash differently.

3. Make a plan for what you'll do when you are there

If you are in the post era:

1. Nice work! Be proud.

2. Stay in the post-emergency fund era- continue to hone your chops as an investor and buy more great assets.

3. I’ll say it again cause this is so critical - stay in the post-emergency fund era - you only have to get rich once, don’t be an idiot with your hard earned money.

Everyone has cash, but only some use cash like we talked about today.

I hope this gives you a different perspective so you can build a stronger, faster-growing financial life.

Stay the course and keep investing.

Catch you all next week.

PS—Our team at Fjell has helped many families transition to the post-emergency fund era. They've accumulated cash, have extra income to invest, and come to us looking for what's next.

If you are ready to take this crucial step in your journey, just reply to this email with a "next step," and I can connect you with our team.

If not, totally ok, stick around cause I’ve got a bunch of great editions in the pipe to share with you as you look to build a better financial life.

Numbers

S&P 500: $5,505

Market implied chance of a rate cut in Sept: 98.1%

Single day % loss for $CRWD: -9.05%

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