Roger Schlesinger

That is the question that is right on the front page of my monthly Men's Health magazine, only I added the financially. It seems like a very good question and one I would like to look into on your behalf. For my behalf I am looking into fit and strong, although at my age I believe fit works a lot better than strong. It is imperative I am fit because of both my plans and my responsibility. Unfit wouldn't work very well. Strong is another question. Other than golf and jogging I really don't participate in other athletic activities any more so I am not sure what I would do with strong. That is because I equate strong to mean large muscles, lifting heavy weights and being able to punish my opponent physically. I am not sure if that is what they mean because I just got the magazine and probably won't get through it until the next one is due.

So I need to ask you are you fit and strong financially? Before you have to guess at the meaning I will explain. Fit means to me that every thing is flowing the way it should. You are earning money, paying your bills and able to maintain your current life style. That doesn't mean strong, however, because keeping up isn't enough in this society. We have so many pressures coming from so many different directions that one must be able to fight off the problems, metaphorically speaking, at almost any time.

Strong means in my world, having liquid reserves, period. Having assets doesn't cut it today because of the problem in converting them to cash. We have a credit crisis currently that defies imagination and has rendered many insolvent who wouldn't have been that way a year ago and may not be next year. But they are now. Reserves are assets that can be converted to cash, if not there already, in about seven days. Pure and simple without these you are not financially strong.

How much is needed is different for all of us. Although I am not a believer in "rules of thumb" they can be used as a starting point. To be secure, and most likely strong, you should have one years income in reserves. The problem with setting that as a rule is that if you make less than $20,000 then one years income probably won't due and if you are a Fortune Five Hundred C.E.O., $200 million is a bit of an overkill. But nevertheless I think you can get my point. What if that amount isn't feasible in your situation? Then strive for six months expenses as your safety net. If you end up with one months expenses it is at least a start. You can get 10 inch biceps over night.

Roger Schlesinger

Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.