In an attempt to explain the economy to everyone, we talk through a number of topics during this episode:Broad economic realities that unemployment is at an all time high and the stock market took a huge drop and then rebounded dramatically because of government intervention.The highest new unemployment claims during the 2008 recession was ~600K, and we’re seeing 5-6M a week right now.We are unsure how long all of this will last, but consumer confidence is down.  Though this is unprecedented, bear markets are not.  How you can understand the economy by explaining how a CEO runs a company to how you run your personal finances.  Your household personal finances have some key activities:You make decisions based on expectations of cash flowsYou borrow moneyYou invest in certain assetsCompanies are the same:Companies have real estate, supplies, employees, etc. All based on expectation of cash.When that cash stops, they have to either absorb it or reduce costs.5 main things you can do with cash and how that compares to your personal finances:Reinvest into the business--renovate your housePay shareholders--give it away or spend it on your familyAcquire something--buy a new housePay down debt--pay off mortgageStock buybacks--Mike’s not sure what the equivalent isCompanies have a disincentive to just hold cash. And households just don’t like to, but they should.  So when this all hits, companies, like people, can’t pay their bills because they have no cash.Companies with an emergency fund like a household can survive longer.Why is the market rebounding?The situation now is cash flow, so the government is basically flooding the economy with cash. Unemployment benefits are increasedBusiness can get loansSectors are getting bailoutsMike explains what the Fed isIt’s like taking a personal loan though. You have cash, but you haven’t created any value. The fundamentals of your life are no different, you just have cash now to pay bills.The economic fallout of what is happening will be significant and last for many years.  We recommend managing your personal finances with this in mind.  The good news is that we’re seeing some fascinating human behavior coming out of this.  The world is uniting around a common cause, and we’re seeing people unite around a uniquely unifying event in a way we’ve never seen before.  This means we’ll get through this as a world, but it will be a tough road for many to get to the other side of this.  And the other side may look different than things look today.  Mike also shares that his favorite sources of financial information and news are Yahoo! Finance and the Motley Fool.  Top 3 Takeaways:Companies are like households in that they spend money based on the expectation of cash flow.Companies don’t have an incentive to keep cash because of investor demands, but you do have an incentive to keep cash.   This will be tough. Live like you lost your job. Don’t take risks with your health or your money.---Show ReferencesYahoo! FinanceMotley Fool---Follow friends on FIRETwitterInstagramFacebookLinkedInLeave us a voicemail or text us: 404-981-3370eMail us at:  [email protected] our website: www.friendsonfire.org---Other LinksMaggie’s Blog: Mostly Minimal LifeMike’s Book:  Your New Relationship with Money