Liquid is Key to a Solid Financial Plan

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Having the right balance of cash, savings and investments is important to your financial health. According to The New York Times, a January 2015 report from the Pew Charitable Trust Funds finds that half of Americans have less than one month of emergency funds readily available for use. Yet, many financial advisers recommend families have from three to six months of income in savings in case of job loss or an unexpected major expense.

How much savings do you have, and how much of it is readily accessible?

In our continuing series on Biggest Financial Planning Mistakes, this week we focus on Mistake #9.

Mistake #9: Locking Down All Savings In Assets That Are Not Liquid

Last week, we discussed the riskiness of putting all of your retirement assets in one asset class. Another risky mistake is investing all of your savings in assets that are not liquid – meaning that you can’t readily get to them.

“People are not properly saving, or they can’t access their savings until age 59-1/2 without a surrender penalty and paying taxes,” says Cullen Douglass, a CERTIFIED FINANCIAL PLANNER™ with Douglass Financial Services in Cool Springs. “Going to your 401(k) to get money is about as smart as going to a payday loan place.”

According to Douglass, creating a financial plan is the first step in ensuring your financial goals and needs are in sync. It will reduce your stress levels and give you greater confidence in your future.


  1. Budget – It’s important to track your receipts to know how much money you have coming in and what you are paying out in order to truly understand your cash flow.
  2. Emergency Fund – You need to think about your own unique situation, but the rule of thumb is three to six months of living expenses.
  3. Income Protection – Insurance is important to protect against potential financial loss. Think health, disability, life and long-term care.
  4. Retirement Savings Plan – Your company’s 401(k), or an IRA are good places to start; and the younger you begin to save, the better.

To ensure your financial security for the long-term, begin now with the proper information and expert advice – from a CERTIFIED FINANCIAL PLANNER™. Cullen Douglass, CFP® and his team of professionals at Douglass Financial Services in Cool Springs has more than 60 years of combined industry experience.

Cullen Douglass, CFP® is a Wealth Management Advisor who focuses on complete planning including risk management, investments, estate planning, retirement planning and insurance. Douglass Financial specializes in comprehensive integrated financial planning, including:

  • Ÿ Personalized Financial Planning
  • Ÿ Investment Advisory; Products & Services
  • Ÿ Trust Services
  • Ÿ Wealth Protection & Risk Management

Just moved to Tennessee? Don’t delay in learning about Tennessee’s unique state laws. It’s not worth putting your spouse or children at risk. Cullen Douglass, CFP® & Douglass Financial Services can help you successfully navigate what can be murky waters.

Whatever your situation, if you have ten minutes, give Cullen Douglass, CFP® a call and take the first step in securing your family’s financial future. Douglass Financial Services is a division of Northwestern Mutual.

Click here to learn more about Cullen Douglass, CFP® and Douglass Financial Services.

To view our last article, Mistake #8: 5 Tips for Allocating Assets, click here.

Check with us next week when we discuss our final topic in this series, Mistake #10 in Biggest Financial Planning Mistakes.