I see many people desperate about yesterday's and today's drop and I decided to talk about Emergency Reserves.
What is an Emergency Reserve?
The emergency reserve is a financial fund intended to cover unforeseen expenses or unexpected losses, ensuring financial stability in times of crisis or market volatility.
Why is it important for investments?
1. *Reduces risk*: Protects against significant losses in risky investments.
2. *Avoids forced sales*: Allows you to maintain long-term investments, avoiding hasty sales.
3. *Keeps you calm*: Reduces financial stress during market fluctuations.
4. *Flexibility*: Provides resources to take advantage of investment opportunities.
How much money should be set aside?
1. *3-6 months of expenses*: Cover basic needs.
2. *10% to 20% of assets*: Protect investments.
Where should you invest the reserve?
1. *CDBs*: Fixed income and low risk.
2. *Savings*: Liquidity and security.
3. *Short-term investment funds*: Higher returns than savings.
4. *Direct Treasury*: Fixed returns and low risk.
Tips for maintaining your reserve
1. *Review regularly*: Adjust according to financial changes.
2. *Maintain liquidity*: Quick access to money.
3. *Diversify*: Avoid dependence on a single investment.
4. *Automate*: Deposit regularly.
Additional benefits
1. *Debt repayment*: Use to pay off short-term debts.
2. *Opportunities*: Take advantage of investments in times of crisis.
3. *Emotional security*: Reduces financial anxiety.