Guides · Getting started
Do you need an emergency fund before investing?
In short: Yes. An emergency fund stops you from having to sell your investments at the worst moment to pay for something unexpected. People often aim for 3 to 6 months of expenses, in an accessible, risk-free account.
Why it is the foundation
Unexpected expenses often come at the same time as crises (a job loss in a recession, when markets are low). Without a cushion, you sell at a loss.
Where to keep it
In a savings account you can access immediately, with no risk of loss. The return is low, but that is not its job.
How much
It depends on your situation: a student with few costs can aim lower, a family with a mortgage higher. The idea is to sleep well.