A short video segment by Ndubuisi 'Andy' Egwim explaining the importance of building an emergency fund (recommended three to six months of expenses) before investing, and advising on financial defensive strategies such as income protection, life, car and house insurance, and legal cover to avoid being forced to liquidate investments during crises.
What's an emergency fund? Emergency fund is basically saving three to six months worth of your expenses. So if you know what you spend in a month and you save three to six months worth of fee, that's your emergency fund. Once you have that by the side, then if things go wrong or you suddenly need money, you will not be tempted or you'll not be forced to have to sell off your investments even before they're yielding you the fantastic bonuses or the fantastic return that you should be getting. So build an emergency fund before you start investing. Let's head over to number four. Number four is very related to an emergency fund, is have a financial def. Defensive strategy. What I mean by financial defensive strategies, before you go out to attack, to make money investing, have some sort of financial defensive strategy. And that would include things like income protection, life insurance. It includes things like car insurance, which obviously is composite. You have to get it by law, house insurance. Sometimes I even think about getting legal cover so that even if you were sued and you suddenly have to defend yourself, you can have a bit of coverage.
