Is investing your emergency fund an advantage or disadvantage?

Emergency fund is made if you want to have money for emergency cases. Most of these situations varies on the kind of shortcomings that you encounter. That is why the preparation of this type of fund should be attainable, time bounded, smart, and realistic. Financial advisers would suggest to their clients to start saving and have a time table either 3 months savings or the 6 to 8 months savings. Three months savings are those who got unemployed and recently just got hired, which is understandable because salary is not that well paid off yet, and perhaps if you still have to settle things like debts from a friend or so. While the 6 to 8 months savings period is implemented when you are able to have enough money to start saving.

Why do you need to invest your emergency fund? This actually have no certain answer but if you dig deeper to the concept of funds and investments they both come in different way of approach and it is somehow a complicated process. The advantage of investing an emergency fund is that it gives you the assurance that you are secured and safe when it comes spending the money. It gives you a peace of mind that you do not have to worry about where will you get money. Furthermore if you really wish to invest your emergency fund the return is higher as you earn. The disadvantage of  investing an emergency fund is that since you want to have a good return of money the end result will let you loose your money because you are investing your money. This goes to show that what you have saved will only end up loosing everything.

For most people saving their money is through an account in which it have 0% interest rate or can do better at least 0.05% this is done by moving an emergency fund to an online bank in which it pays out to only 1%. The reason that your money should be in cash because you can easily access it and you have your money 100% without lacking.

Indeed earning more money is what everybody would like and love to do but if you are saving that means that you are doing it for the benefit of your future. Compared to investing your money, it is more likely that you are making money and have it grow in profit. Investing your money for the benefit of your future will give you an idea of doing for you to earn more and just like any other insurance policy investment is long term. While on the other hand, saving for an emergency fund does really require a long term goal but this is mostly on the short term goal site in which it focuses mainly on the savings. The use of emergency fund may not be use right away but at least on the brighter note when you faced a situation you are ready and prepared to face the reality of an emergency situation.

http://ift.tt/2ahTpMB