The Cache Framework
Build a store of extra money
This framework involves building a cache, or store of extra money, to provide a sense of security and peace of mind. It requires a willingness to save and invest, but can provide a sense of freedom and flexibility.
- Build a cache to provide a sense of security and peace of mind
- Use your cache to smooth out the flow of money into and out of your life
- Consider using your cache to invest in assets that will generate passive income
- Calculate Your CacheDetermine how much you need in your cache to provide a sense of security and peace of mindPro tipConsider using the 50/30/20 rule to allocate your income towards necessities, discretionary spending, and savingWarningFailing to accurately calculate your cache can lead to an inadequate sense of security
- Build Your CacheSet aside money in a bank account or money market fund to build your cachePro tipConsider setting up automatic transfers to make saving easier and less prone to being neglectedWarningFailing to regularly contribute to your cache can lead to an inadequate sense of security
- Review and Adjust Your CacheRegularly review your cache to ensure it is adequate and make adjustments as neededPro tipConsider reviewing your cache quarterly or annually to ensure it remains aligned with your financial goalsWarningFailing to regularly review and adjust your cache can lead to an inadequate sense of security
Alan Seid and Tricia King's Cache
Alan and Tricia built a cache to provide a sense of security and peace of mind, allowing them to pursue their passions and interests
OutcomeA sense of security and peace of mind
Rosemary I.'s Cache
Rosemary built a cache to handle unexpected expenses and financial setbacks, providing her with a sense of security and peace of mind
OutcomeA sense of security and peace of mind
Insufficient Cache
Failing to build an adequate cache can leave you vulnerable to financial setbacks
Inadequate Review and Adjustment
Failing to regularly review and adjust your cache can lead to an inadequate sense of security
Lack of Discipline
Failing to regularly contribute to your cache can lead to an inadequate sense of security
The author discovered the importance of having a cache through her own experiences with financial independence. She found that having a store of extra money can provide a sense of security and peace of mind.
Source · BOOK
Your Money Or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: R...