Asset rich and cash flow poor….
“It never occurred to me to think of space as the thing that was moving.”
I love quotes; sometimes a good quote gives me fresh eyes to consider some problem or strategy I’m considering. Perspective can be everything, and a fresh lens to strategy planning or problem solving is of value.
Last month we addressed the importance of strong free cash flows in our businesses at all times, but it may be mission critical now if banks tighten their lending criteria. In an article in the Wall Street Journal on Monday June 5th, the author cited that banks may need to boost capital reserves by as much as 20%. In other words; your access to capital may indeed be the “space as the thing that is moving” currently. The link to this article is included at the end of this Grace Note.
Asset rich and cash flow poor companies may find it difficult to maneuver in a higher interest rate environment. Moreover; credit tightening also could affect business owners’ access to much needed cash flow when it could prove most useful. After all, sometimes the groundwork for wealth accumulation is built strategically in moments of disruption like now.
Following our SCORE methodology and understanding each client’s unique needs, especially their cash flow needs, helps us to better plan for challenges AND opportunities.
It may be a good time to check in with your banker. You may also want to discuss how using an insured sweep account or ICS for your deposits more than the $250,000 FDIC limit is prudent.
Do you have Fiscal Harmony LLC?
Orchestrating Fiscal Harmony™,
Kelly Kunst CFP®
2023 Five Star Wealth Manager
Once again, I am honored to be named a Five Star Wealth Manager by Texas Monthly. Nearly 4,000 Dallas-Fort Worth wealth managers were considered for the award; ten percent of these candidates were named 2023 Five Star Wealth Managers. Being recognized is always nice, but the real blessing is serving families and helping them on the path to Fiscal Harmony LLC in their lives.
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