Can someone provide counterpoints to this? I also think like OP, but people can’t sometimes comprehend such decision.
I recently went to a job interview for startup, and they were selling me really (like, way below even average) crap salary in exchange for some options (not on contract, just verbal [on the approval, not even the amount]).
I told them that I would take a bit more salary than what they were offering... You wouldn’t believe their faces. It’s like they couldn’t believe I was telling them I pretty much never had debts and I liked positive cash flow, hence my initial salary choice. They dared telling me I could ask for a loan if I needed to keep some of my businesses up.
Anyways, I’m just saying that very few times I dare go negative. I have a house, car, and I travel from time to time (usually what I spent most of the positive flow in). I had to save tons of money for some, and others were result of some businesses. For the big ones mentioned I never went negative.
I’m not saying it’s possible or everyone is lucky enough to happen to them, but these were people that have a lot of money from inheritances (I know them), and what I understood from the whole interview is that they always live without positive cash flows, personal and businesses alike.
I think people are very different than companies in this respect.
An individual would want to have savings (in the form of pension - e.g. 401k - and invested savings), while a company's mandate is NOT to store significant amounts of money to derive capital interest from it.
True, but it's similar in the sense that both can leverage credit but then become dependent on their creditors, and that having a significant chunk of cash in your assets gives you freedom to do what you think should be done (invest in new facilities, etc.)
A quick google reveals that Apple supposedly has over 200 billion in cash reserves...
Applies to individuals just as much as companies.