Monday, February 18, 2019

Expected Unexpected

A Buffer is a form of self-insurance. Like a salary that only meets your expenses is hand-to-mouth survival, actual insurance takes the bumps out of life in exchange for a premium. It is hand-to-mouth risk control. You pay someone else to remove the bumps. A Buffer is Capital that you can draw on if you need to. Some months you spend more than others, because of expected unexpected events. Flat tires, broken toilets, dropped vases, leaky fridges and rats in the roof. These are annoying but hardly unusual. If you have breathing space between what you earn and spend, building a Buffer can take care of you. The bigger the Buffer, the more you only need to pay for insurance for the smashes and canyons that would wipe you out. A Buffer is temporary, till things right themselves, support. An Engine would be enough Capital to give you Financial Security without requiring you to be a productive financial asset. An Engine would be the breadwinner, and rock, in your family so that you can build a life. And rock.


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