A Daring Move in Desperate Times: Investing My Cash Reserves
One of the very first goals of our family shortly after we were married was to save as much of our excess income as we could in an emergency fund. Our goal was to have about 6 months of living expenses, which for us was about $25,000. We never actually reached this goal but we came within a few thousand dollars.
I was content to collect my 3-5% interest on this money for about the past year or so but this all changed in July.
In July I stumbled into a great business opportunity.
Peter Lynch always said invest in what you know and for the longest time time I have been looking for a great opportunity to use my knowledge to invest in medicine
It was a difficult decision but I joined a group of other physicians in creating a startup company. It has been a wild ride thus far and I can only expect it to get wilder.
What does this mean for me?
- As usual, it means even less sleep than usual. Most of my time when I get home from work has been spent helping get this project off the ground.
- It also means that I don’t get to spend as much quality time with my wife and daughter when I am at home.
- Most importantly for this blog is that I have essentially invested away all of our emergency savings with no guarantee of a return.
Only time will time tell whether with is a good decision or not. I could make a very strong argument for taking those same funds and investing them in a depressed market, making a long term investment in equities at a time when many of the “experts” find them to be cheap.
A few years down the road when this all settles out I hope to do a comparison of the return on investment of these two options.
For me the potential for tremendous upside was too much to pass up. Lets hope I don’t need those emergency funds any time soon.
