Always have a backup plan and emergency reserve

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The money that we allocate for investment should be different from the money that we have in emergency reserve. Our day to day life should never be dependent on the money that we invest in the future. When there is a need in the family, we should be able to run the family without the dependency on the money that we have invested. We should be ready to invest only the money that we are ready to burn. The reason is that not all the time the money we invest will give us good returns. There can be situations where we might even end up in a huge loss.

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Even if we have a big loss and lose all the money we have in the investment part, we should be able to run the family and fulfill the basic needs of the family. Even if there is a big downfall in the investment returns, the regular family activities should never get disturbed. People also advise that we should be investing in flexible assets that can help us during emergency situations. I would also recommend having liquid funds along with such investments.

Always have liquid funds

It is very important to always have liquid funds in hands. Most of the people try to spend all the money they have in their hand. The money can go for the regular day to day spending as well as for the future but when it comes to saving, it will be ideal to have a few liquid funds that are always accessible for you. There can be emergency situations and for those emergency situations, only the liquid funds will be able to help us. The long term investments are very good but we have to calculate as to how much it should be.

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While categorizing the investment based on our source of income and planning for the future, liquid funds should also be a part of the plan. Some people lock their money on investments that cannot be reimbursed when there is a need. There are many flexible short term investment plans that can be a little more helpful if you are not comfortable holding money as liquid funds.

Backup plans

The investment that we do usually have a 50/50 chance. Diversification of our investment is one backup plan where if one investment goes bad another will be able to support us. The actual backup plan is to have enough in the hand even if we try to invest in something. Today one of my friends told me a proverb while having a chat. "Don't bet everything on a single horse". We are all good with all the positive vibrations and good thinking but what if something goes wrong. We should definitely have some backup plans to keep things rolling.

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When it comes to investment, market, and trading, we cannot predict anything. The outcome can even look like gambling at times where unexpected things happen. If we have an emergency reserve that can save the family and that can keep the family running, we should be good to go with even taking risks.


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2 comments
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telokanda will get this

We will eventually have a hive engine mobile wallet

I hope @roelandp and other witnesses get all their steem back from hive proposal system after some agreement to maybe hold it all has hivelower for 2 to 3 years and vote with it on community posts etc

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