Timing is Everything
The best time to do something is often when you least feel like doing it.
As the years of teaching infinite banking have gone by, I keep running into the same characters over and over again, as I get out there on the streets and roll up my sleeves.
“I want to do this right now, how do I get started?”
“My wife doesn’t like it, let me get her on board first.”
“This is a scam. The internet said so.”
“This is what I have been looking for my whole life!”
“Now isn’t a good time, but I definitely want to do it later.”
I was in a business meeting the other day with a dozen other entrepreneurs from various industries. There was a young man there who owns a budding handyman business. He has been making good money and is building his team.
He asked the question, “How much should I keep in cash reserves in my business account?”
Someone jumped in and said, “Three months”, and the whole room agreed.
I immediately said, “THREE YEARS” very loudly. You wouldn’t believe the psychological backlash that LEAPED out of everyone in the room!
I cited that figure, because that’s how much liquidity I have personally.
I keep all of it in life insurance policies.
It’s the core of my lifestyle.
This simple story illustrates the practical difference between an Austrian’s way of thinking, and a Keynesian’s way of thinking. I cannot yet fully claim to be an Austrian, but I’m well on my way. I need to actually read Human Action (Mises) before I feel like I can truly claim Austrian-ship. But that story illustrates the basic difference. Keynesians spend all their money and keep very little around, and make themselves dependent on bankers for a money supply. The average entrepreneur in America has about one month’s expenses in the bank. Austrians, on the other hand, believe in saving money and keeping a substantial liquid amount available at all times. I saw an interview recently where Kevin O’Leary said, “Don’t stop until you have $5 million in T-bills. $5 million in T-bills, then you can do anything you want!”
The reason people think like Keynesians is because no one has taught them to think otherwise. Everyone around them lives their life as a Keynesian, and they follow suit. Once a pattern of behavior and thinking is established, it is extremely difficult to change.
There has never been a more important time to build a substantial liquidity reserve. Warren Buffet’s cash peaked at a record $397.4 billion at the end of Q1 2026, then fell to $365.5 billion at the end of June, the first decline in years. Greg Abel, who took over as CEO from Buffett at the start of January, has started spending it. I guess he just couldn’t help himself.
My father used to say, “Is your money burning a hole in your pocket?” I wonder if he knew how prophetic that saying would become later in my life. Ray always said, “Michael, accumulate some cash in your policies, and you won’t believe the plans that other people have for your money.” Not only does people’s money burn a hole in their pocket, apparently other people’s money does too!
It is just too tempting when “times are good” to spend all our money in an economy that just feels so inviting with opportunities. We must learn to spot the warning signs, and realize that it is cash reserves that enable the American entrepreneur to not only survive but thrive during times of economic hardship.
This strategy does not indicate an attitude of taking advantage of anyone. It is an attitude of taking responsibility for rebuilding the economy when the bankers and politicians have finished thoroughly deploying their snakish devilry and hoisting the unpaid bill on the American public.
Store your cash reserves wherever you like, but know this: there isn’t any place to do that where you truly own them yourself and truly control them yourself, other than properly designed, permanent, dividend-paying whole life insurance. This type of cash reserve takes time and discipline to build. Those who achieve it, as Nelson always said, will discover an entirely different financial world in which to live, that few people ever get to experience.
“The results are highly desirable.” -R. Nelson Nash, Becoming Your Own Banker
