The number of people who invest is increasing every day. Efficiency is something that we all desire, and what better way to achieve that than by earning money while you sleep. The phrase “in your sleep” is meant literally. The ultimate goal of every investor is to make money work for them.
Today, we will be talking about Emergency funds and their importance before investing…
Any sound financial strategy must start with a sufficient emergency reserve. It is what makes it possible for you to deal with situations that could be financially disastrous, such as losing your job, receiving unexpected medical bills, or needing a new roof, without going bankrupt. Unfortunately, many people struggle with saving for various reasons and will most likely borrow money if an urgent need that wasn’t planned for arises.
Remember, Your emergency fund is what enables you to handle potentially disastrous situations — job loss, unanticipated medical expenses, a new roof — without putting you in danger of going bankrupt.
Then what is a sufficient emergency fund? The truth is that this depends heavily on your particular circumstance(s) and varies from person to person. However, as a general guideline, most experts advise keeping 3–6 months’ worth of living expenses in reserve as an emergency fund — Yup!!!
It’s important to remember that, as the name suggests, this money should only be used in an emergency. Think of it as a safety net in case things don’t work out as planned. It shouldn’t be used for non-emergency expenses or for planned savings objectives (such as a down payment for a house or car, among other things), which should be treated as a separate financial goal in your plan — let’s be guided please lol.
Where should you keep your savings for emergencies you might ask? Your emergency money should be maintained in a location that is secure and liquid, so keep those two things in mind (available quickly). You might be tempted to ‘grow’ your emergency funds (having more money is always nice), However, heed my warning when I suggest that safety and liquidity come before growth in your emergency fund.
Knowing that you have your emergency fund settled, you can then start your investment journey. A part of your income can be contributed to this cause.
You can start your investment journey on Wealth.ng. With Wealth.ng you can diversify your portfolio with various asset classes such as Stocks, Treasury Bills, Bonds, Eurobonds, Agriculture, Wealth Cash. Simply sign up or login to your account to get started. You can also install the Wealth.ng mobile app for Android or iOS and invest freely from the comfort of your mobile device.