Living hand-to-mouth makes it
very difficult to absorb shocks. Even if your income matches your expenses,
life has a habit of faking left and punching right. My rule of thumb is to “self-insure
for the knocks you can take, and buy insurance for the ones you can’t”.
Insurance is a Grudge Purchase. If you pay the premiums and nothing happens,
people moan. Since you don’t get anything. Except it is really like a reverse
lottery. Do you really want to win? When it is tough enough to meet expenses,
finding a little to put aside to pay for insurance is hard. Hard, but
important. If you can find breathing room between your hand and mouth, you can
start to build a Buffer. A little Capital to call on when there are surprises. If
no surprises blow your Buffer out the water, it can grow into an Engine.
Capital that can be put to work and power you through more knocks.
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