Why You Need An Opportunity Fund

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Quote

“I’ve found that luck is quite predictable. If you want more luck, take more chances. Be more active. Show up more often.” - Brian Tracy

Why You Need An Opportunity Fund

Having an emergency fund is level one of personal finance.

But let’s be honest. Emergency funds = boring.

Level 2 is having an opportunity fund.

Opportunity funds = exciting.

Hot take incoming, having an opportunity fund can have a bigger impact on your life than an emergency fund.

You’ll see why 👇️ 

What Is an “opportunity fund?”

Ever wish you had some extra cash laying around to spend and not feel bad about. That’s basically the job of an opportunity fund.

Lets cover a few examples of when it would come in handy.

1. That rental house you always wanted came up for sale. You need to get an offer on it ASAP because it’s not going to be on the market long. Opportunity fund.

2. Your 70 year old neighbor offers you a killer deal on his used truck before he goes to “trade it in at the dealer next week.” Opportunity fund.

3. For the first time in history your college baseball team plays in the National Championship. You buy tickets and plan a 15 hour road trip with your boys two days before. Opportunity fund. (yes, we just did this two weeks ago.)

You get the point. An opportunity fund is for those higher than usual spending events that don’t qualify as an emergency, but still offer great “value.”

How Much Should It Be?

We all know the emergency fund recommendation of having ~6 months of living expenses saved up and locked away for a rainy day.

In my opinion, there is no specific number you should have ready to go for an opportunity fund but here is a suggested range that I have found works for me:

• High Side: Three months living expenses.

• Low Side: One months living expenses.

Somewhere in here is what I have found to be the sweet spot. For smaller things that come up you won’t need all of it, but for bigger opportunities that involve investments you’ll be ready to rock.

Should You Invest It?

So now you have a little extra cash set aside, what should you do with it?

While I DO NOT like investing an emergency fund, I’m okay if one wants to “conservatively” invest their opportunity fund (no yolo’ing it into meme stocks). 

Why? Simply put because if needed you can say no to an opportunity if your investments are down. Emergencies often don’t give you the choice on if you should spend money.

If you don’t want to invest it, here is are three ways to earn 4%+ on uninvested cash.

Conclusion

Once you nail the basic blueprint for your finances, consider tossing a little extra cash into an opportunity fund.

When done the right way, this will be some of the most fun you have ever had with money.

Opportunity is knocking - Cade.

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.