This is a guest post from John Border, a fellow Yakezie, he is a banker and author of the blog Stock Market Basics
You definitely need to have that liquid cash readily accessible for you needs like a sudden health issue, or loss of job or even unexpected expenses. That liquid cash is something that you will need to consciously build before you start putting money into some of the best investments that you have planned for the retirement.
Size of the fund and the peace of mind
The size of the emergency fund is something that you will need to define for yourself. Typically this fund should be equal to 3 to 6 months of income however, I do not think that is a fair calculation. The emergency fund should be based on some hard cold facts, like your monthly expenses. That you will be able to arrive at only if you have budget and you know how much goes out each month.Continue Reading...