Cash Is King

Hey, what's up? This is Tim Pratt Jr. I want to thank you for taking the time to listen to this content today. I hope you hear something that adds value to your life, shaping your perspective, faith, and hope, as well as the application to see and do in this thing that we call life. Enjoy. So this is episode 10, Cash is King, and you know we're going to be talking about percentages and the cash reserve when it comes to budgeted automated finances. But before I jump into that, I want to thank you all. This is the final episode for season 1, and I appreciate all the feedback and the constructive criticism. Like, look, I was really just scared to do the podcasting thing because I wanted to come off more like a conversate, like I'm having a conversation versus a lecture, and so on and so on. But I'm glad I did it. And so I'm already working on content for season 2. I'm gonna take a little break, kind of get back on my blogging, you know, speaking, and just going forward with ministry as well as my job as a project manager, technical project manager, and the other avenues that I have. And so it's just balanced, but I'm coming back, and I hope by the grace of God it's even better with season 2. So with that being said, let's get right into this content and for this episode. So in the last one, we kind of went through the basis of a comprehensive financial plan, and in this one, you know, like I said, with cash is king, I wanted to talk about percentages more so dealing with a budget, because when you're dealing with automa— automating your finances, you're mostly— most people are following like the 50/30/20, or they might do 60/20/20, you know, 70/30/10, or 90— I mean, 80/10/10. It's just basically allocating so much money in a percentage to like different accounts, just automating. And so it's kind of easier, uh, once you figure it out. To me, it's actually easier than budgeting, but with budgeting, it's kind of a little bit more intentional. In a little bit more detail, and I think that's the number one reason why a lot of people hate it. But really, just being truthful with you, this is kind of just what I would use, and you might want to get a pen and paper, or I can like, you know, post these. You can go to my website because I'm gonna write a blog about it and have it up shortly as well. Or you can just actually go look through the blog, and I believe there's one out there for budgeting and automated finance, kind of one I wrote a while back, but I can always reshare it. You know, if you all want me to. Just give me feedback, just connect with me. So with that being said, let's jump into it. So percentages according to The Total Money Makeover by Dave Ramsey: charitable, 10 to 15%; savings, 5 to 10%; housing, 25 to 35%; utilities, 5 to 10%; food, 5 to 15%; Transportation, 10 to 15%. Clothing, 2 to 7%. Medical and health, 5 to 10%. Personal, 5 to 10%. Recreational, 5 to 10%. Debt, 5 to 10%. Now this— on the other side of this, going through the same things, and this is Money Matters percentages of what they feel like we should be. Charitable, 10%. Savings, 10%. Housing 32%, utilities included in the housing, food 13%, transportation 13%, clothing 5%, medical and health 4%, personal 13%, recreational 6%, debt 5%. So that's kind of like I say, you don't have to use those, that's just to give you like a ballpark figure of which you should construct your budget around. But it's very important to do this because the whole thing is basically cash is king. Having cash on hand, yes, like in your bank account. Yes, I understand we live in a credit world, this, this, and that, and all of that. But at the end of the day, those bills have to be paid. Cash is forever going to basically move things, you know, within the currency of this world that we're in. And so you have to know how to strategically free up your money and have more how to allocate it to certain things. Now, like I say, keep in mind this is just percentages because in the last one we talked about the comprehensive financials. So we have to rightly divide all of this stuff. And if you get confused, this is where basically you want to just get with somebody and find a money coach, pay them, you know, find a mentor. Uh, but for the most part, I would definitely hire a money coach or financial advisor or something like that, financial consultant, whatever you want to call them, and just plug in. Because a lot of times, like, if I want this credible, ask them their credentials, ask them tell them to kind of show proof of like they are, because some people are doing this really just trying to make extra money and haven't achieved any type of success, and they're really talking from what they have studied or mentor. But you want to actually find somebody truly that has lived it, you know, has made the mistakes but also seen the success. That's the best person to me, from my book, that you can find. And so when you get down to it, you know, kind of when we talk about the emergency fund or the peace of mind, this is your cash reserve on hand. Like, think about what I said in the thing, you know, one of the first questions. If you seek Proverbs 21:5, the plans of the diligent lead to profit as surely as haste leads to poverty. So you got to be diligent. Like I said, you have to be thorough when it comes to your finances. This is how you're going to build up cash, your cash reserves. And then you can take that money and invest into things, because a lot of times people try to take like $500, you know. If you want to put that in a mutual fund, going on and on and on, that's different. Like I say, you have to rightly divide this thing, look at your whole portfolio the big picture. But some people, you know, they put in $500 and try to start, you know, getting into penny stocks and all of that. But to really get in this, you have to have money to get in the market. Like, the reason why the people like Warren Buffett of the world and just multi-millionaires and even people that have hundreds of tens of thousands of dollars is because, you know, they put in $10,000 and you say, for instance, that gains you 10%, that's $1,000. Doesn't, you know, seem like— but $1 million in that gains 10%, that's $100,000. So like I said, I'm just using those whole numbers to kind of show you the picture of why you have to have cash reserves. Then it's like when those people put that money in there, uh, say if it's $100,000, that's $10,000, 10%. But it's like when those people put that money in there, then it's like, okay, your cash on hand, your cash reserve, how long can you go without that? Because a lot of times we put money in the market, but then we need it right back out. You know, we got to pull it right back out, so it really can't grow. And so you really have to think about that. That's one thing when I had approached the stock market— yes, timing and all of that— but I was just stockpiling, stockpiling. And so then as I started navigating it, moving it, you know, my percentages started going up, and then I was kind of like taking, but I never touched the principal. And so that principal is still able to produce. And now, you know, what I look at as a whole, I'm trying to grow that principal now because it's like that cash reserve, that cash on hand and all of that. Make sure I don't have to touch it so my peace of mind and emergency funds stay up. Because I want to have so much, you know, saying relevant to my life, my wife and I, you know, just my kids and all of that. And just be able to really like, say, okay, we can take this risk, you know, we can put this in. Now we factor, you know, we run our percentages and all of that. We don't have to touch this, so this can grow 3, 5 years, you know. Then we put it in this account, this account because we're trying to basically invest and get out. Retirement is just a number, it's not necessarily an age. You know, my dad, my mom, you know, my dad just retired, 49 years old, he'll be 50 next month, just retired. Young retirement, you know. Now he can really focus on pastoring. And like, he's always been a full-time pastor like last 15, 16 years, but now he can really focus. And so it's just seeing people like that, same thing with my father-in-law, my mother-in-law you know, seeing how they're doing things and stuff. And so these are things like I'm looking at it like, man, wow, this can actually be done. So it's hope. So like I say, Riley Divide this episode, and this is a quick one. Like I said, I just wanted to kind of give you a little bit more details about the percentages and talk a little bit why, you know, cash is king, you know, why those reserves are important. Of course, like I said, you can listen to the previous episode where I talk a little bit more from the mental side of it versus the technical side, kind of, in this episode of why the emergency, you know, or the automated financial plan is very important. So this is it. This is the last episode of season 1, as I've told you, and I want to thank you all so much for rocking with me. Season 2, I'm really going to try to step it up from just the way I converse, control, and get on the mic, and so on and so on. So please share these last 3 episodes with your family and friends as they deal with finances. Or just go back and tell them, hey man, look, check out the whole thing, the whole 10 episodes with kind of some bonuses and trailers in between, because I really appreciate it. I don't want to just talk, I want to get straight to the point, but at the same time give you the proper context as well as the practical so you can apply these things. So with that being said, appreciate you all for rocking with me once again, and enjoy. Hey, thank you so much for listening to this content today. I want to encourage you, if you haven't already, to subscribe to it and share it with family and friends on your social media feeds. And you can also go over to www.timothyprattjr.org in order to find out more about the blog as well as other things that I offer on how to connect with me. So with that being said, I hope you have a blessed day and continue to see this thing through that we call life.