👉 Strap math is a method of financial planning and investment that focuses on maintaining a consistent level of cash reserves to manage unexpected expenses or opportunities. It involves setting aside a specific percentage of your income as a "strap" or buffer, typically around 10-20%, which can be drawn upon without needing to sell investments at potentially unfavorable times. This approach helps investors avoid the emotional stress of market volatility and ensures they can take advantage of new opportunities or cover emergencies without depleting their long-term investments. By maintaining this cash reserve, strap math aims to provide financial stability and flexibility, allowing for disciplined investment strategies while mitigating risk.
