Tuesday, April 30, 2019

Beyond an Emergency Fund: Making More Money with a Financial Cushion

As I was considering leaving my last job, which had a very generous 401k match, I realized that it was unlikely that my next company would have as generous of a match. As soon as I decided I was serious about finding a new employer, I cranked up my contribution to 50% of my salary until I got the full match in a few short months before I quit. We lived off some extra savings we had set aside to be able to pay the bills. That extra savings we lived off of, essentially made us $1,000's of dollars.


Over the past few months, I've noticed even more places that if you have some extra financial cushion, you can use it to make even more money. This is good motivation for having a cushion beyond an emergency fund. I'm talking about money set aside not for emergencies...but opportunities. This principle reminds me of this quote from the Richest Man in Babylon.

“The man who became of his understanding of the laws of wealth, acquireth a growing surplus, should give thought to those future days. He should plan certain investments or provisions that may endure safely for many years, yet will be available when the time arrives which he has so wisely anticipated.”
George S. Clason, The Richest Man in Babylon 

Here are a few ways I've seen this in action. 

1. ESPP (Employee Stock Purchase Plan). If you work at a publicly traded company and they offer this is a perk, if you can do without 20% of your salary for 6 months, you'll get a >15% guaranteed return on that money you set aside. Read this link for the details on how it works.

2. Exercise early options. A very tech example, I know, but if you believe an IPO is eminent at your company you can exercise early and lock in long term capital gains and save a lot of money in taxes. Read more here.

3. Pay in advance discounts. There are many products, like car insurance, where if you pay in advance they give you a discount.

4. Strategic charitable contributions. Consult a tax professional, but especially if you give a regular percentage of your salary, there might be some tax advantages to paying for the next year in December of the previous year depending on how near you are to exceeding the standard deduction. 

5. A great deal. This is a very dangerous one, but if used with constraint and it's legitimately something would have bought eventually, the financial cushion an let you pounce on a great deal.

6. Tax moves. The most common way is making a contribution to a traditional IRA or pre-tax 401k, but you might be surprised at the answer if you have an accountant and ask them the question. "How could I move some money around to lower my tax bill?".

Bottom line, if you can set aside some money apart from your emergency fund for opportunities, I'm confident each year you'll find more ways to have even more cash in your pocket that year. 

Disclaimer...these are just some ideas, consult a professional

18 comments:

  1. This is a well-researched article which you have shared here about financial. This is a very informative and useful article. This type of advice is not easy to find so, thanks for this information. Vehicle And Equipment Finance in Brisbane

    ReplyDelete
  2. I have a job and I part-time provide financial accounting assignment help services online. In this era, it is very difficult to manage expenses by just doing one job. To earn more, it’s mandatory to invest your time and physical strengths in different places. Your article has given me so many more ideas for savings. Till now, I was just saving my money by investing in property or keeping it in the bank. Loved this articles! thank you

    ReplyDelete
  3. I have never seen any blog which can provide such type of financial information. I must say this is a very useful and informative blog. I wish I can read your other blogs but I have to hire someone who can Write My Assignment - UKAssignmenthelp.uk a site which was suggested to me by my friends. I assure you, I will visit your blogs once I am done with my assignment.

    ReplyDelete
  4. We are a pipe manufacturing company and provide a wide range of plastic Pipes and PVC pipe fitting. we have visited your website first time and really appreciate all your effort what you have done here
    keep sharing

    ReplyDelete
  5. Thumbs up guys you’re doing a really good job We really enjoyed reading this post. Thanks for sharing. We also provide Different kinds of diesel generators for industrial and commercial use.

    ReplyDelete
  6. Are you seeking stellar Brand Management assignment help at unmatched prices? Reach us at British Dissertation Help to achieve a top grade. Our dedicated writers provide the best solution on any assigned topic with fast turnaround time and deliver an original content as per the guidelines of the professor.

    ReplyDelete
  7. If you are set the pricing one then It's good to get food delivery Toronto services available and being a nice person to deal with it!

    ReplyDelete
  8. In addition to my full-time career, I work part-time as an online tutor for assignments from https://www.britishassignmentshelp.co.uk/. Nowadays, it is exceedingly challenging to keep spending under control with just one employment. You must engage your time and physical assets in various endeavors if you want to make more money.

    ReplyDelete
  9. Planning for the future is necessary for your long term goals and earning money by financial cushion is the best way to earn. TOlindo is a delivery services company who are providing their services very efficiently with their dedicated team . They just don't provide instant deliveries but also delivers on scheduled days that makes them the Best Courier Service of Toronto.

    ReplyDelete
  10. Making more money and save money for future is dream for everyone. Are you own a business and looking for someone for marketing essay writing. Here you get marketing help from expert writers which help you to make more money.

    ReplyDelete
  11. Making more money with a financial cushion is a goal that many people share. Whether it's building up savings or investing in stocks and property, having a financial cushion can provide a sense of security and allow for more freedom and opportunities. However, achieving this goal can be challenging, especially for students who are already managing a tight budget. That's where British essay writers come in. By seeking out affordable and reliable writing services that specialize in write my essay for me cheap uk solutions, students can free up more time to focus on building their financial cushion. Whether it's by taking on more freelance work or pursuing new opportunities, having expert essay writing support can give students the boost they need to achieve their financial goals. So, don't let the demands of student life hold you back from building your financial cushion. Contact British essay writers today for affordable solutions that can take your essays to the next level and help you achieve your financial dreams.

    ReplyDelete
  12. If you're looking for ways to build your financial cushion, there are plenty of strategies you can use. One great option is to start saving more money, whether that means cutting back on expenses or finding ways to increase your income. One way to do this is by using a eurocentres coupon code to save on language classes. Learning a new language can be a valuable skill that can help you in your career and open up new opportunities. And with our coupon code, you can save money on top-quality language classes at Eurocentres. By investing in yourself and your education, you can create a brighter financial future and build a solid financial cushion for whatever life throws your way.

    ReplyDelete
  13. Having a financial cushion is essential for any emergency, but it can also be used to make more money. By investing in income-generating assets like stocks, real estate, or even starting a side hustle, you can build wealth with your savings. Additionally, using cloud-based erp software can help you streamline your finances and track your investments to make informed decisions.

    ReplyDelete
  14. Having a financial cushion is important for weathering unexpected expenses, but it can also provide opportunities for making more money. As an Ambsan IT solution consultant, you can use your skills to take on side projects or start a small business. With the security of a financial cushion, you can take calculated risks and invest in yourself, ultimately increasing your earning potential.




    ReplyDelete
  15. We at ExpressPRO Consultancy offer high level of services for mainland company formation Business Setup/Formation in Dubai. Address office212,Umm Al Sheif, Sheik Zayed Road, Dubai Phone, 97145840955 mainland company formation

    ReplyDelete
  16. Koh Grill & Sushi Bar in Singapore stands out as a culinary gem, offering a delightful fusion of Japanese cuisine with a touch of innovation. Located in the bustling heart of the city, this dining establishment has earned a reputation for its delectable grills and sushi creations that leave patrons coming back for more.

    ReplyDelete
  17. This comment has been removed by the author.

    ReplyDelete
  18. This comment has been removed by the author.

    ReplyDelete