I almost emphasize this Need of having Liquidity of money to the point that, person on the other side feels I’m paranoid
Benjamin Franklin said that 80% of problems in life are Money problems (money related in some way or the other) – for the majority
I would slice it to…..
30% or less are money issues (other than liquidity)
50% or more are money liquidity issues (cash flows)
10% are health issues (which can’t be comforting)
10% are all other issues (issues that we complicate)
Sometime ago, I met someone who had tied up most of his liquidity into the closed Franklin schemes…thinking that it’s just T+1 day redemption payout and he can have access to his money as and when needed.
But alas, a black blue green swan event happened and all the liquidity vapourised on that unfortunate day.
Yes, Franklin did give the money back with the growth too
But……. It didn’t give back the TIME lost in not having access to that money…..I.e., LIQUIDITY to the investor at the time when he needed it the most for a purpose that he invested. It failed for a certain period, on fulfilling its obligation as a pass through vehicle in providing Liquidity to investors.
Result today…… That investor decided that he’s never ever going to go back there
We think we can understand the SWAN events….well they wouldn’t be swan events if we can visualise them beforehand.
Oh, kudos to all and anyone (enough of them) who predict the Swan Event itself along with the timing, direction, impact etc….(mostly, post facto)😊
Bottomline….. Ensure the tap doesn’t run dry
I had to name Franklin because the person I met had the experience with it…..not that I’m specifying franklin only
By all means, it can be any stock, real estate, loan to a someone or any asset