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Some may look toinvestinggiants like Warren Buffett.
Others might see what their favorite finfluencer is posting on TikTok.
Kim, a personal finance expert and YouTuber, is a big fan of Costco.
Keep Cash Reserves
Part of Costcos strategy for managing its global operations efficiently is liquidity.
As of March 12, 2024, Costco had $10.4 billion in cash and cash equivalents.
Kim explained that Costcos business model further strengthened its cash position.
Costcos products arrive on pallets.
This eliminates shipping and storage costs and turns inventory into sales rapidly.
Having cash reserves also helps on thepersonal finance level.
Keeping healthy savings is one lesson we can learn from Costco.
Costcos slow and steady pace should be a model for your own finances.
Every Cent Matters
When it comes to pricing, Costco is very exact.
This practice is in place because they believe every cent matters, and Kim agrees.
Not being exact when it comes to money can lead to various problems.
Incorrectly estimating costs or disregarding a purchase because its only a few dollars can be a slippery slope.
Keeping accurate records and valuing money even down to the cent will lead to more savings and better finances.
Kim brings up the example of Costcos chicken sales for its $4.99 rotisserie chicken.
In 2023, Costco sold 137 million rotisserie chickens despite not being experts in chicken processing.
Kim explained that Costco used vertical integration to bring theentire chicken operationin-house.
Costcos chicken operation has expanded to the point where it owns a $1 billion compound in Nebraska.
Costco can now process over 200 million chickens a week, keeping the price down to $4.99.
Kim relates this to investing, saying you dont need to pay a financial advisor to make your investments.
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