After a long gap when you take the decision to save money finally, it is a good decision. But do you know during this time people make another mistake? Due to financial instability, when a person is unable to save money for a long time, then immediately after getting back to that stable financial situation, he may wish to save most of the fund.
At that time, he hardly thinks of the importance of liquidity. But it is the ultimate requirement of every single people. Saving money is good but do not put all your money into an investment account. Rather keep some funds for emergency purposes.
When you keep money in an investment account, it remains locked in for a certain number of years. Generally, this lock-in period will run for a minimum of 3 years and a maximum of 5 years. Within these years, even if you have a huge need of money, still you can’t withdraw your own fund.
However, you can arrange for money in your emergency by borrowing from the reliable money lenders of Dublin. There is no exception of liquid fund. This is because even if you have to wait for fund for a day or so, whereas you can easily have the money when it is in your savings bank account.
The same thing each and every financial advisor will also say. Financial advisors are the finance experts who can guide you better in taking crucial decisions on monetary factors. Generally, people visit a financial advisor when they are unable to manage personal finance.
According to those finance experts that, one of the common reasons for suffering due to financial crisis is running out of liquid funds. Generally, people fail to analyse the future condition and, becoming extra obsessed with investment, choose the wrong scheme. As a result, the person failed to save money as an emergency fund, and on the other hand, he is unable to withdraw money from the investment account.
Therefore, a financial crisis takes place. Although in order to drive out the crisis, there are many money lenders, there is no exception of keeping money in hand always. While advising keeping money as an emergency liquid fund, financial advisors cite the following reasons.
Whether you have invested money in the share market or stock market, both of them are fabulous. Ups and downs are common and main features of such market-linked investment. Therefore, you need to prepare yourself for facing loss as well.
Time may come when the performance of the share market will not up to the mark, and the prices of shares are reducing day by day. In such a situation, you may even lose the principal amount too. For this reason, you must keep some money in your bank account, which will offer liquidity at that critical time.
To contradict the above logic of financial advisors, many people may say that there are so many investment schemes that offer liquidity anytime apart from good returns. Well, this is not wrong. Yes, there are some investment schemes that may offer you a high rate of interest and, at the same time, will offer liquidity anytime.
But in such cases, there are some procedures through which you need to undergo to get back the amount. However, during a medical emergency, you need to have the money at once. At that time, you will not be able to spare even a single day delay. Then only liquid funds will work to handle the situation.
When there is an emergency requirement of the fund, then without thinking much, people generally apply for online loans from the direct lenders of Ireland. There is nothing wrong with it, but if you are unable to repay due to no money in hand, then the situation becomes worst. Besides, with borrowed money, you may pay the hospital bills. But after bringing your near ones at home, there is another expenditure which you need to carry on without any doubt.
At that point in time, you may apply for another outstanding loan. Such a chain of borrowing will throw you into a low credit score and ruin the future possibility of borrowing money. So, if you want to avoid such a disgusting scenario, then try to save money for an emergency fund.
If you think that if you need to keep the money as a liquid asset, then you may lose an extra interest rate. Now, this is something completely wrong. There are so many effective ways to store liquid money which will serve you ample benefits.
There are different types of bank accounts nowadays. There is a particular type of account that may offer a high rate of interest depending on the amount of money you keep. Actually, it is an initiative of banks to encourage people to save money in liquid form. Banks that provide this facility usually set some amount bands. If your saved money comes into that band, then you will earn an extra interest rate.
While you do not want to lose even a day’s interest, then it is better to invest money in short term CDs which will offer a high-interest rate. At the same time, it will offer you quick liquidity facilities. Moreover, we have witnessed people who have invested money in short term CDs are more gainers than people who have invested in long term CDs.
So, do not worry about your money during applying the strategy of keeping it liquid. Rather stay in liquidity and earn more rates in interest.