In this article we will talk about short-term savings. By "short-term savings," we mean the money you will need for emergencies and for big expenses such as a wedding, vacations, a new car, or when you lose your job. What could happen if you don't have short-term savings?
- Emergencies or even expenses will spring a credit card trap on you that can take years to escape from.
- To cover a sudden expense, you may have to sell assets, such as stocks, that were intended to cover long-term goals. Unfortunately, this happens during a time when the market is down, and you have to sell your stocks at a loss. Plus, that money is no longer invested, so you will miss out on future growth.
You have got several options on where to keep your short-term stash. But first you need to determine how much short-term savings you need.
How much you set aside depends on the following factors:
- your willingness to take risk
- your needs
- your upcoming expense
I don’t think you need to have to much short-term savings, because your profit will be bigger when you have long-term savings. But, it is very important to have some money you can use in case of an emergency.
Kathleen
1 opmerking:
It's an article that will wake some people. A lot of them don't realise that at a sudden moment you will need a certain amount of money that you don't have. Of course the most profitable way is assets management.But it's not easy to find the right balance between short- and long investements.
Els
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