“Cash is king.” This common expression is often used when analyzing business or investment decisions. When buying real estate in a hot market, cash is king. If you come to the table with cash over more traditional financing methods, your offer will likely move to the top of the pecking order. #-ad_banner-#Same goes for when looking at a stock. A company that produces a ton of cash or carries a good amount of cash in relation to debt is often seen as a “safer” investment compared with a company that’s debt-ridden. And when investors believe the market is getting too… Read More
“Cash is king.” This common expression is often used when analyzing business or investment decisions. When buying real estate in a hot market, cash is king. If you come to the table with cash over more traditional financing methods, your offer will likely move to the top of the pecking order. #-ad_banner-#Same goes for when looking at a stock. A company that produces a ton of cash or carries a good amount of cash in relation to debt is often seen as a “safer” investment compared with a company that’s debt-ridden. And when investors believe the market is getting too hot, or expensive, they will often stockpile cash to have on hand when the next pullback hits. This way, they can pick up shares of their favorite company at a better price. Of course, having plenty of cash is only beneficial if it isn’t dwarfed by massive amounts of debt. Taking on too much debt can be a real killer as profit is siphoned off to cover debt and interest payments. And if a company can’t keep up with those debt payments, they will have to file for bankruptcy… and even then sometimes the debts are too much to even… Read More