Before You Step on the Field

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Before you begin discussing allocation, even before you begin investing, every financial plan must ask one question

By Jed Collins

In a season, you practice 10 times more than you play the game. You spend this time preparing for the opportunity to play the game, not knowing if you will win or lose. Though you understand the better shape you’re in, the better chance you have to win.

In a portfolio, you protect your cash to prepare for opportunities and setbacks. You protect your cash because you don’t know if future inflows will be good or bad. Though you understand that the more protection you have, the better chance you’ll have of avoiding the bad and taking advantage of the good.

Without being in the proper condition, the clock will always be a factor.

Before the game is won, even before you step on the field, every athlete asks themselves one question:

“What is the first thing I need to play the game?”

The answer does not come from strategy or even skill—the first thing you need is to be conditioned. Being in the right condition does not win the game, but it allows you the flexibility and opportunity to win. Without being in the proper condition, the clock will always be a factor.

playbook-cash-protection-brighton-jones

Before you begin discussing allocation, even before you begin investing, every financial plan must ask one question:

“What is the first thing I need to play the game?”

The answer does not come from strategy or skill, the first thing you need is cash protection. The correct amount of cash protection doesn’t give your portfolio high returns, but it allows you the flexibility and opportunity to achieve them. Without the proper cash protected, you are always one bad turn away from trouble. If you depend on this month’s income or this month’s market returns for next month’s expenses, time will always be a factor.

The correct amount of cash protection doesn’t give your portfolio high returns, but it allows you the flexibility and opportunity to achieve them.

“Cash” in this sense doesn’t mean cash in your hand; instead it means “liquid” or available funds (liquid means any investment that can be converted to cash on short notice). This money will not take on high risk and therefore will not receive high returns. Examples of liquid investments are short- and intermediate-term bond funds.

No athlete jumps into a game without being in shape—your condition makes it possible to win.

No financially savvy individual jumps into the market without cash protected—your cash makes it possible to live and invest.

Jed Collins serves as a relationship manager at Brighton Jones. A graduate of Washington State University, he played in the NFL from 2008 to 2015.


Recent posts in this series:

5 Reasons Why Pro Athletes Go Broke

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