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Lesson 3. How Much Do You Have to Invest? > Getting Rid of Debt - Pg. 15

How Much Do You Have to Invest? 15 In addition, this savings amount should be readily available. This means that you should be able to quickly get your hands on that money in cash. In the event of an emergency, time is rarely available to accommodate the paperwork or functions necessary to get your money out of the stock market. This statement is not meant to frighten you into thinking that getting your money out of the market is a long, laborious process--because it isn't. However, getting your money may take a couple of days, or even several weeks, depending on the arrangements you make. In an emergency, you can't wait that long to get your cash; you need to be able to go to an ATM machine and get your hands on it immediately. Plain English Sufficient savings means the amount of readily accessible money or credit that you would need in case of an unforeseen emergency. This money, usually three to six months' worth of expenses, should be kept in an easily accessible account, and collecting it should pre- cede any investments. If you don't currently have sufficient savings for an emergency fund, forget about investing for right now. Your first priority is to amass your safety net by beginning to put away some amount into this fund regularly. In addition, any unexpected windfalls should also go di-rectly into this fund. If you have not previously had a fund of this type, it may be tempting to use that money as it starts to grow. By raiding your fund, however, you are only further postponing the time when you will be able to invest. You must have sufficient savings before investing. The importance of this fund cannot be stressed enough. It is, without a doubt, more important than the ability to invest. Amassing Your Emergency Fund Having stressed the importance of sufficient savings, a couple of tricks may help you amass this