Trade The Journey

Trade The Journey

Cash Crunch Nightmare!

The only thing more terrifying than entering a cash crunch phase is not knowing how long it will last.

A cash crunch is no laughing matter, especially when there’s no relief in sight.

Facing this crunch, I see my only options as weathering the storm or receiving some type of bailout. Winning the lottery is one option, and hitting the jackpot on a slot machine is another option. However, I’ve only hit the jackpot once in my lifetime.

Borrowing could increase my cost long-term. Withdrawing from my savings account could decrease the amount of funds available in the future. Usually, it isn’t the surprise expenses that kill you, its the expected expenses like gas, bills, and other fixed expenses. You know they are coming, yet there’s little you can do to stop them.

In my last post, I spoke of my increased willingness to test my knowledge and skill in the market. However, this cash crunch has dampened my enthusiasm. As badly as I want to trade, I don’t feel it fiscally responsible to trade with my debt-related expenses rising.

 

Some would say that believing in yourself is part of my dilemma.

 

 If you were truly confident in your skills and abilities, you’d put one of your most valuable resources on the line.

Your Cash

The market won’t lie to you. The market has no feelings, it only exists to facilitate trade.

 

Part of the challenge in trading/investing is controlling yourself. This is an aspect of trading most difficult for novice beginners like myself to understand. You might miss something if you stay on the sidelines.

Do you have the patience to wait for an opportunity to emerge? Do you have the patience to understand that the market will always be there?

I would say that I do. So I must wait until my personal financial situation is in balance before risking an amount I might need in the future.

Another dilemma I face is bringing my debt back to a manageable level. In order to do this, I will have to liquidate one of my accounts. This account returns a lower amount of interest and the account is named, “Park My Cash.”

This makes total sense in the rational part of my mind, yet I find liquidating the account hard to do. My diagnosis is that I am emotionally attached to the money I worked hard to save. I fear that if I settle this account to pay down debt, I might never recover the amount.

However, paying a twenty-six percent interest rate monthly overshadows the small rate of return I earn on the “Park My Cash” account.

I think that in the long run this move will benefit me. I’ll benefit from the reduced interest payments and the peace of mind in knowing that my financial situation is conducive to successful trading. The amount that I will be trading will be an amount I am comfortable losing.

Trading is about mindset and operating at a peak level will serve me well when I experience the volatility involved in the different markets I ‘ll be trading.

My grade for the week is an “F”.

Although my cash flow varies from month to month, I let my debt level rise to an uncontrollable amount and spent most of my savings to cover my bills.

This sort of situation must be avoided for long-term success. Now, I think it necessary to form a real budget. Update Next week.

Questions? Concerns? Corrections?

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