Episode 119- The Opportunity Fund

The Opportunity Fund

So, I’ve talked about Dave Ramsey a bunch in the podcast recently and how much of an incredible effect he’s had in our life in helping us get out of debt, helped us build a life of freedom. But there’s one area of the teachings that I’m not sold on or maybe he missed it or maybe he doesn’t care because he’s talking more to employees and not entrepreneurs. I think that can be a big part of it because his listeners are generally employees that aren’t making very much money and are trying to get out of debt. But often they’re not employee’s kind of with an abundant mindset so he needs to stick on the path and I get that. So not everything he taught jived with the way that we wanted to build our business going forward. 

The thing I wanted to talk to you about today is the emergency fund. Now this might not even hold water for so many people because I read a report recently, it said if a $500 bill, an unexpected $500 bill showed up for every American, 50% would have to take out a loan to pay that $500. So that goes to show that most people don’t have an emergency fund. So as this is today. if you’re in that spot, this might not help you. But it’s something to think about as you go forward and become more financially secure and independent. Randy talked about the emergency fund about having a 3-to-6 month emergency fund but you start off with a $1000 baby emergency fund just in case you need to pay for something so you could pay down the rest your debt. 

Now I don’t want to talk about debt today or debt payment, that’s not with the mindset of this is about. The mindset that I wanted to talk about is abundance and opportunity. I want to introduce to you something that we introduced to our family. Elizabeth and I made this up and it’s something that allowed us to create way more opportunities in our life for things that just show up that we want to do or want to invest in. So I know a lot of people talk about the emergency fund and you meet some people, I’ve met very many of them that want the biggest emergency fund they could possibly get. I have talked to people that have $50,000 emergency funds but they want to be $100,000. What’s amazing is, now I know this is rare, but what’s amazing is they miss out on so many opportunities because of that number. So I’ll ask them “what is the biggest emergency you’ve ever had? And they will say something like they have to buy new car, that is not an emergency. Buying a brand-new car for $25,000 is not an emergency. You could buy a beater car for $3,000 to drive around. So, luxury is not an emergency. And when they got that, they basically say “maybe a hot water heater or a furnace, maybe $3,000 is the biggest emergency we had.” I say ok and Ramsey talked a lot about 3 to 6 months of living expenses as an emergency fund. 

Now that makes sense if you’re an employee. But being an entrepreneur, being self-employed is different. You are not applying for a job. You can go get money, you can go take on job, you can make money pretty quickly. A very few entrepreneurs are sitting around in 3 to 6 months to get paid for something. And if you follow what we are talking about, you are building multiple streams of income. So even if one things go away, another thing shows up. So, I don’t know how necessary 3 to 6 months of income into an account is. It is nice to have but it is not necessary. 

So, factoring all that in, we changed the game a little bit for ourselves and our life and that’s what we are going to talk about today. We decided yes, we need an emergency fund for the emergency and we figured out that it could be $10,000 or $20,000 but we really don’t need anything more than that as a base emergency fund. Cause I don’t think we had an emergency that is more than $3,000 and we never have a month where we didn’t produce an income of some sort. Also, the more you do this, the more your income go up monthly so it becomes less and less important. But I can tell you how we grew and why we were able to invest in so many other things when so many people  weren’t able to or they were too scared to. And this is what we did. 

We had the base emergency fund that was a certain amount of money but everything on top of that, we labeled in a different way. We called it the Opportunity fund. And it changed the way we did business with our money because in the past, as the emergency fund grow bigger, we will feel attached to that number. So if it gets to $25,000 or $30,000, emotionally and psychologically we don’t want that to go down because that is now the new emergency fund. But the conundrum is a possible trip would come up or an invitation for a VIP conference or mastermind and we would hesitate because that money would come out of “the emergency fund”. And going to that conference in San Diego was not an emergency so even though our numbers kept going up, our opportunities were not going up. So, the opportunity fund changed everything. Because we knew there was a certain amount of money sitting there for emergencies. But on top of the emergency fund was the opportunity fund.

Now what’s the opportunity fund for? It was for exactly what we just talked about. opportunities in our life that we want to invest in. So, you want to travel across the country, that comes from the opportunity fund. If a conference announced that I really want to go to, that’s going to grow our business, grow our network, if we don’t want to pull out of our monthly expenses, we have the opportunity fund. So we just booked a couple of months on the road this winter again. What happens is when you take out the opportunity fund, you have the ability to keep growing your income with your month-to-month income. So over the last couple of months, we just invested in that stuff just from our monthly income which hasn’t even touched the opportunity fund. So they play on each other and they build on each other sp the emergency fund gets bigger because it’s very easy to drop another thousand dollars in the emergency fund to make that even safer as your opportunity fund gets bigger. 

But what that’s done for us it’s given us the freedom that we’ve always wanted, that we were confined with when the emergency fund had to be a certain number. This excites me way more than the Dave Ramsey plan because I never saw what the end game was to doing all this. Because baby steps 7 was paying everything off then living like no one else and giving everything, which I love giving but I always thought there should be a baby step 8. This is kind of our baby step 8 because the more the opportunity fund grows, that’s when the fun of the future comes. Now everything on the table if you want to travel, if we want to invest in ourselves and as we’re doing it, if we want to invest in real estate for the future, that’s where the money goes. Because this money isn’t saved for an emergency, this money is saved for opportunity and it is only with opportunity that you have the chance to chase the life and the freedom that you desire. So, here’s the opportunity. Here’s to growing your opportunity fund and I will talk to you tomorrow!

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