Here’s Why I’m Accumulating Extra Money Right Now | Personal finance


If the omicron wave continues at its current pace, it could disrupt everything from schools to healthcare systems to supply chains. And the results could be devastating.

If things get noticeably worse, we could see unemployment levels rise. And some cities or states may have no choice but to impose lockdowns, even if they’re not as extreme as the restrictions we saw in the spring of 2020.

All this uncertainty could cause stock values ​​to plummet. Or the stock market may not react at all. But if stock values ​​plummet, having extra cash will be crucial for several reasons.

First, there is loss protection. You only lose money in the stock market when you sell investments for less than you paid. But it’s something I don’t want to have to do, which is why I hoard money for emergency expenses, or in case my income takes a hit when I have to juggle my work and a distant school (a scenario where I could easily land several times this winter).

Second, having more cash could make it possible to acquire stocks at a low price if the market does indeed crash in the short term. I already have a list of stocks that are priced a bit too high for my appetite. But if stock values ​​go down, I’ll want the option to jump immediately – and having cash on hand will make it possible to do that.


Comments are closed.