The Power of Financial Redundancy
In my upcoming book, You Should Only Have to Get Rich Once, we detail why flying represents the ultimate form of trust. Each time we taxi down a runway we hope the pilots and mechanics did their jobs. Our life depends on it.
But we’re all human and mistakes happen regardless of preparation. That’s why airplanes have redundant systems. Redundant systems automate mechanical operations that may or may not have been caught by humans. Everything important is duplicated for safety. What a great concept!
For example, the pilot has a co-pilot. There are spare compasses, altimeters and hydraulic pumps. There are at least 2 systems to lower the landing gear. Generally, planes have 2 times the amount of power needed to fly. They can lose an engine and still make it to the ground, safely.
This is all very interesting. So what does it have to do with your money?
Redundant cash flow is probably one of the most over-looked areas of investor safety. I just sat with a client who retired about 4 years ago. He has 7 completely unrelated sources of cash flow. Because of social security, rental income, business interests, bond interest and dividend income, to name several, he could suffer a catastrophic failure in one system with little impact on his retirement flight path. That is true financial security.
The development of these systems took years. But with proper planning and preparation, you too can build redundant financial systems. As you work on developing your independence, pay careful attention to your redundancy. One day you will need it.