Why Your Emergency Fund Is Costing You Money (The European Strategy)

Описание: The standard American advice on emergency funds (3-6 months of expenses) is often misguided for investors in Europe, where social safety nets are typically stronger. Holding too much cash creates a significant "opportunity cost," dragging down your potential wealth.

This video outlines a more sophisticated, two-phase strategy for European investors:

1. *The Starter Fund:* Begin by establishing a cash fund of 1-2 months' salary. This is your initial buffer and should be in place before you begin investing.
2. *The Dynamic Fund:* As your investment portfolio grows over the years, the need for a large, stagnant cash fund diminishes. The advanced strategy involves shrinking your cash reserve and learning to use your investment portfolio as your main line of defense against major, unexpected events.

We also address the key concern: What if you have to sell your investments when the market is down? We break down the trade-off between this potential cost versus the guaranteed cost of holding excess cash long-term.

Disclaimer: This video is for educational purposes only and does not constitute financial advice.

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