Ndubuisi Egwim argues doctors need three to six months of living expenses set aside so market crashes don't force panic selling. An emergency fund lets you stay calm during downturns and even buy when prices drop, if you're investing long-term.
Well, I'm out in the woods and it's quite peaceful. It allows you to reflect and to think quite carefully. Yeah, it's a bit lonely but you know, I think that's the pride of solitude. But I love it. It's just here with my thoughts and the beds, the sound of the beds. It's one of the lovely things about living down here in the southwest in Devon and Cornwall, lots of places. If you like to go out to the woods or you like to get to the beach, there's quite a few options with a lot of peace and quiet. I needed this after a whole weekend in the busiest parts of London, going out to do some tours and sights with my parents. But one thing I wanted to reflect on is the need to stay calm. One of the things I enjoy is the woods are quite calming. There's a lot of panic now with the stock market crashing. A lot of people are out there saying, oh, should I buy the deep or should I sell? What should I do? One thing you need to do is to stay calm and study the situation. One of the things that could help you stay calm is having an emergency fund. If you've got an emergency fund, three to six months worth of your living expense saved, it helps you to make less, you know, emotional decisions because you're not worried they're going to lose everything. It allows it to be a bit more thoughtful. So even with the market going down, it could be a buying opportunity. I'm not saying it's for you because I don't know your current financial situation, but if you're an investor with a long term horizon, my experience after 20 plus years of investing, and even as a doctor, I've studied the system, I've seen that most times the best returns I've gotten have always been doing when the market was turbulent, when things weren't too good, when people were happy. It doesn't feel emotionally good. But mathematically, if you can get excellent companies at discount, whether you're buying at indexing or you're an individual stock investor like myself, if you can buy things at a discount, if there's a sheds, sheds are selling at this kind of food, that's the time to buy. You get it cheaper, isn't it? Or houses are selling at a discount. But when it comes to stocks and investment, people usually sort of head for the doors and it makes stuff to crash more so. Again, this is not professional financial advice. You understand your situation, but what's important in this period is to stay calm, understand the situation and of course before you start to invest. If you're just starting out, have an emergency fund. Three to six months worth of your living expense. Even longer if you don't have a salary job. If you're not a regular employee or a business owner. If you're a business owner like myself, then three to six months while your living expense, you want to save it if possible more. Not for investing, but just as a backup, something to make you to feel calm. And if it does happen that there's a market crash, you can then think about whether it's an opportunity to even buy more. All right then. I hope that's helpful. Cheers. Bye Bye.
