Have an emergency fund!

Investing is a risky business.

If you are investing in stocks, ETFs, #btc or in anything that has a variable price, you cannot afford to be forced to sell.

Why?

If you are forced to sell because you need money immediately for something important (e.g. emergency), then you might have to sell with a loss. This means you would have been better without investing.

To circumvent this, emergency fund or FU money comes in handy.

Emergency fund is money that you keep for emergency cases. Could be also called FU money, to imply that you can quit at your current job, because you can live for a few month without a job.

Rule of thumbs:

1️⃣ Keep that money in something liquid. You shall be able to use it any time, and the best is if it does not lose to much value because of inflation.

2️⃣ Keep at least 3-6 monthly costs in it. Should depend on your risk tolerance, and how easy it is for you to find a new job. The harder it is, the more you shall save.

Summary:

1️⃣ If you want to invest, put together an emergency fund before, because you never know.

2️⃣ Save in it at least 3-6 months monthly costs of yours.

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