The Need For Emergency Cash
Many Singaporeans do not see the need to set aside their money incase of an emergency. It is very important for a person to have enough money to last him for at least 3 to 6 months. This would ensure that even if he is out of job for whatever reason; he would have enough to last him for the particular period till he finds another job. Not only jobs, usually bad things happen when you are down and out. Consider your fridge hanging up its boots or an unexpected death in the family. Life still goes on…that’s where emergency cash comes in.
LAW FOUR: SET UP AN EMERGENCY CASH FUND
I know of an acquaintance who invested almost all his savings and was involved in an accident caused by an error in his judgment while maneuvering his vehicle on a bend. Now, since it was a major accident, it became a police case and he was held in lockup. He was allowed bail for about $7,000. Had he kept aside 3-6 months of his salary, he would be able to settle the bail immediately without going through the trouble of raising that amount of money from scratch or putting his house as collateral and wasting valuable time. Even if he were to divest, it would have taken him some time and there would be a chance of losing if he had divested at the wrong time.
In life anything can happen anytime. People who are looking to invest should have some substantial amount of money set aside before they do so in case of ANY emergency that should arise.
